Lebanon forms new government after months of deadlock
TUNIS - After nearly nine months of political horse-trading, Lebanon declared it had formed a new government, promising bold reforms intended to kick-start the country’s foundering economy and unlock millions of dollars in promised loans and aid.
The new government reflects much of the May 2018 vote, with gains by Hezbollah and its allies translating largely unscathed to the cabinet.
Lebanese Prime Minister Saad Hariri must work with Iran-supported Hezbollah to deliver reforms, while finding accommodation over Lebanon’s relations with the Syrian government, which Hezbollah continues to aid.
Hariri apologised to the Lebanese people and those living in economic uncertainty, stating: “No one can put their head in the sand anymore… All the problems are known and the causes of the corruption and waste and administrative deficiency are also known.”
“The solution is with a clear programme and bold reforms… and developing laws that cannot be delayed,” Hariri said.
Hezbollah’s dominance in the new government is almost certain to prove divisive, with many Western countries likely to be reluctant to cooperate too closely with it.
“Eighteen of the 30 (cabinet members) have political affiliations that could fairly be described as Hezbollah-friendly,” analyst Alex Rowell said. “It is, indeed, quite something to see Saad Hariri heading a March 8 [Alliance] cabinet, to use the slightly obsolete terminology of the post-2005 environment.”
The new government grants Hezbollah the Health Ministry and the agency’s budget, the fourth largest budget in the country.
“For Hezbollah to get the Health Ministry in particular… has to be reckoned a win for the party and could also invite serious penalties from Washington in connection with sanctions legislation,” Rowell said.
Hezbollah’s gains notwithstanding, Hariri retained a broad degree of support in the cabinet. However, his former dominance cannot be assured with discussions on Lebanon’s relations with Syria likely to be contentious.
“More broadly, the military security of the Assad regime and, indeed, the entire regional environment has for years now been moving in the [Hezbollah’s] favour,” Rowell said.
The deadlock over forming a government lasted 252 days with the new system of proportional representation and shifts within and without Lebanon’s political class contributing to the delay.
As negotiations in Beirut dragged on, corruption and previously agreed reforms went unaddressed. “Lebanon was already badly damaged by excessive corruption and debt with the Central Bank behaving like it was running a state-sponsored Ponzi scheme. These issues have been exacerbated,” said Firas Modad, director of MENA Country Risk at IHS Markit.
Lebanon is one of the most indebted countries in the world. Moody’s, the credit ratings agency, in late January downgraded its sovereign debt, citing uncertain progress towards forming a government as a contributing factor.
Efforts to form a cohesive government in Lebanon may be determined by the country’s relations with external actors.
“It comes back to the old rubric of Mohamad Chatah, (the economist and diplomat assassinated in 2013),” said Nadim Shehadi, an associate fellow at Chatham House. “The main role of all of Lebanon’s parties should be to avoid the country becoming a regional battlefield.”
With Assad dominant in Syria and Lebanon’s economy faltering, officials in Beirut must chart a precarious course between Western support and Iranian ire.