No end in sight for political impasse in Lebanon amid fears of ‘economic free fall’

“The situation in Lebanon could be described as a stunt doing acrobatics on the verge of a ravine,” said Riad Tabbara, former ambassador to the United States.
Sunday 01/12/2019
Few options, if any. Lebanese President Michel Aoun (C) meets with the country’s top economic officials at the presidential palace in Baabda, east of Beirut, November 29.(AP)
Few options, if any. Lebanese President Michel Aoun (C) meets with the country’s top economic officials at the presidential palace in Baabda, east of Beirut, November 29.(AP)

BEIRUT - More than a month after anti-government protests toppled Lebanese Prime Minister Saad Hariri’s cabinet, there is no indication that a new government will be formed soon despite looming economic and financial collapse.

Demonstrations demanding an overhaul of the entire political system and a ruling class accused of corruption and bankrupting the country have rocked Lebanon since mid-October, forcing Hariri to resign on October 29. Protesters came from all walks of life, regions and sects challenging the sectarian-based system.

“The protest movement has definitely destabilised the (sectarian) political parties. None (including Hezbollah) can now claim to command the total allegiance of its partisans or community. All the politicians are being questioned and held accountable for widespread corruption at a time of financial and economic duress,” said Riad Tabbara, former Lebanese ambassador to the United States and director of the Centre for Development Studies and Projects (MADMA).

The country’s bitterly divided political leaders have yet to form a new cabinet. Hariri’s outgoing cabinet remains in a caretaker capacity as leaders haggle over the next government make-up, which the protesters demand be composed entirely of independent experts.

President Michel Aoun has yet to schedule mandatory parliamentary consultations to appoint a cabinet. Aoun, whose Christian Free Patriotic Movement party is backed by Hezbollah and the Shia Amal movement of Speaker Nabih Berri, said he supports forming a government of technocrats and representatives of the popular movement but also including members of established parties.

Hariri, the main leader of the Sunni community, said he will not head the next government, an obvious reaction to the rejection of his condition to lead an independent cabinet with extraordinary powers.

While politicians were dragging their feet, tensions have been on the rise.

In the most recent violence, Hezbollah and Amal followers attacked anti-government protesters in several spots in Beirut and in the southern port city of Tyre. Intense clashes, mostly fist-fights and stone hurling, occurred between Chiyah and Ain Remmaneh, a former frontline in Beirut during the civil war (1975-1990). In reaction, hundreds of women from all religions marched pledging no return

to civil strife.

Protesters remained defiant despite the repeated attacks. “They are trying to instil fear in us as people, so we don’t progress and stay at home. But the attack gave us a sense of determination,” Dany Ayyash, 21, told Agence France-Presse.

Michel Nawfal, a political observer, said the violence was a “turbulence” that is unlikely to be repeated. “It was a failed attempt to intimidate the protest movement and turn it into sectarian friction. In fact, these acts backlashed and tarnished the image of the concerned parties, even within their own community.”

“The next turbulence will be triggered by the collapsing economy unless a reliable and capable government is formed quickly to deter the economic free fall,” Nawfal said. “Businesses are closing down; others are paying half salaries and many people are no longer able to pay for their children’s schooling… That will definitely lead to strong reactions.”

Lebanon is reeling under the worst financial crisis in decades with unprecedented control in place over banking transactions. Fearing capital flight and amid a hard currency shortage, commercial banks have placed tight restrictions on withdrawals and transfers abroad.

Faced with the restrictions, customers turned to the black market where the price for US dollars has surged since the start of the unrest, reaching over 2,000 Lebanese pounds to the dollar, about a third higher than the pegged rate of 1,507.5.

“The absence of a functional and efficient government compounded with more than a month of protests that put the country to a standstill is obviously speeding up economic collapse,” says Tabbara.

“Lebanon’s main foreign currency resources have stopped almost totally. These include remittances by Lebanese expatriates, foreign direct investment (FDI) and tourism. For instance, hotel occupancy which reached 70-80% in September and October, dropped drastically to 5% after the outbreak of the protests,” Tabbara said.

“The situation in Lebanon could be described as a stunt doing acrobatics on the verge of a ravine,” he warned.

With no sign of a political breakthrough amid the failing economy, Lebanon is in for a long crisis, Nawfal contends.

“Lebanon is experiencing not only a cabinet crisis; but a crisis of its entire (sectarian-based) political system, which is no longer viable,” he said.

“The system should either be reformed or changed altogether. There would be a transitional period during which solutions and ways of reforming the political system can be explored. But, in the meantime, a social security network is needed urgently as we are heading towards a more difficult period which necessitates supporting the most impoverished classes.”

Tabbara underlined Lebanon’s need for international support to help pull it out of the economic and financial mayhem. “But the authorities need to win the confidence of the international community first in addition to winning back the trust of the Lebanese.”