After 13 months of waiting, from September 10th, Lebanon has a new government. The resignation of the previous government came following the explosion at the port of Beirut on August 4th, 2020, which resulted in more than 200 deaths, and consequently large mass demonstrations. Najib Mikati, the prime minister, appointed on July 26th, announced the formation of the new government from the presidential palace in Baabda.Mikati, one of the richest men in the country, with an estimated net worth of 2.7 billion dollars, was twice head of government in Lebanon: in 2005 after the assassination of Rafiq Hariri and in 2011. His name was chosen earlier this year after being approved by most Lebanese political parties, including the two Shiite parties: Hezbollah and Amal. Mikati took over from former prime minister Saad Hariri, after the latter failed in eight months to agree on the composition of the government with President Michel Aoun. One of the main obstacles to the formation of the government was the insistence by President Aoun and his son-in-law, Gebran Bassil, to keep a third of the ministers. Bassil is the leader of the Christian Party “The Free Patriotic Movement”, aligned with Hezbollah. The Lebanese political system divides State offices and political power on a sectarian basis, based on the last census of 1932.The new government led by Mikati is made up of 24 ministers, one of which is a woman. The agreement for a new government comes after an agreement between Mikati, the President of the Republic, Michel Aoun and the President of the Parliament, Nabih Berri.A push for compromise between the Lebanese parties may have come with the help of the United States, France and Iran. US senators visited Lebanon recently, meeting with Mikati himself. While the French president, Emmanuelle Macron, called the Iranian president, Ebrahim Raisi, who claimed to have supported the formation of a government in Lebanon.
Probably in favor of the phone call could also be a concession won by Total in Iraq. Lebanon’s economic crisis has been described as one of the worst in the world for the past 150 years. It has impoverished more than half of the population in a few months, devalued the lira and increased unemployment and inflation. Lebanon’s foreign reserves are running out and the country’s central bank has said it is no longer able to support its subsidy program, thus revoking those for fuel. The severe shortage of fuel and medicines has led to the closure of hospitals, bakeries and other primary services.The new government should initiate the necessary reforms to be able to draw on international grants for humanitarian assistance and begin negotiations with the International Monetary Fund for a rescue package. The other task of the government will be a new electoral law and the completion of the elections in the spring of 2022. News of the government’s formation caused the Lebanese Lira to strengthen from 19,000 to 16,000 against the dollar, immediately boosting purchasing power.Lebanon will receive $ 1.3 billion from the IMF on Sept. 16th, the country’s finance ministry said in a statement.
Read also: Lebanon, one step away from bankruptcy
It also said that allocation will be in the IMF Special Drawing Rights (SDRs). The amount is comprised of $ 860 million from 2021 and $ 275 million from 2009. Part of this aid will be provided to the poorest Lebanese families through a new specific program. Clearly this government will serve to attract initial aid and funds, but many analysts are skeptical about its effectiveness. Without real structural reforms, the money that will come will give a short breath, but it will not be enough. The members of the government do not represent civil society, which appears to be the biggest loser, but they always remain affiliated with the old parties. Few believe that it can be done with an efficient and reformist government when it always remains in the hands of the political class, guilty of the economic disaster. Mikati himself has been accused a few times of corruption. The heaviest accusation came in 2019 when a State Prosecutor accused Najib Mikati, his brother and the largest bank in the country of making illicit gains from a subsidised housing program. The immediate objective of the government will be to give the country economic stability and it will be an arduous accomplishment. He will have to intervene on subsidies and financial losses. But few are confident that the finance minister, a former central bank official, will. The political ground in which Mikati will have to move will be unstable. Except for the Christian Geagea, all the other parties rushed into the division of ministries. Aoun managed to gain control of a third +1 of the government. Hezbollah has two ministers in the new government, including public works, which translates into control of the port, airport and border crossings. But above all, the inclusion of Hezbollah will hinder cooperation with the United States and the European Union. The influence of Iran in the new government will not please even the Arab Gulf States which will continue to stand on the sidelines, waiting for new developments. Mikati will have to deal somehow convincing the international actors of the need to preserve the new government, given that a collapse of Lebanon would play in the hands of Hezbollah. The real stakes are the elections, to have control of the new parliament and to be able to influence the presidential elections in October 2022. Between defining the program and having confidence in parliament will pass at least a month. Then the first thing that must be done is to start negotiations with the World Bank which will not give results before the end of the year. And so we will enter the electoral campaign from January 2022, returning to the barricades and the struggle for the electoral law. Assuming something happens along the way, then Aoun could blow up or otherwise paralyze the government. Mikati did not clarify any of the details of the consensus, and was ambiguous when asked about his intention to run for elections. For the transaprency, one of the international conditions is the formation of a government with no members nominated for parliamentary elections . It can only be said that there will be a slight relief for the Lebanese economy, but nothing promises that the change will be radical and substantial.
