Lebanon’s politicians show lack of seriousness

Backs to the future, Lebanon’s politicians continue to block the formation of an independent government of experts which might be able to rescue their sinking ship of state from the doldrums of incompetence, mismanagement and corruption. When, after weeks of procrastination and prevarication, an impatient Prime Minister-designate Saad Hariri leaked a partial list of potential ministers, President Michel Aoun said Hariri could not make appointments without consultations with him. Aoun was apparently concerned that Christians would be underrepresented although the new cabinet was supposed to be non-partisan and non-sectarian. Ministers were meant to have expertise Lebanon needs to exit ongoing troubles and look to a promising future.

Aoun followed up this comment by suggesting that the politicians should think of giving a greater role to the caretaker cabinet of Hassan Diab. It resigned in August following the explosion that devastated Beirut port and adjacent neighbourhoods, killing 2004, wounding 6,000 and rendering 300,000 homeless. During seven months in existence, its efforts to achieve minimal progress in the battles against economic meltdown, political statis, and COVID were blocked by the deeply entrenched political class.

French President Emmanuel Macron, who speaks for a group of foreign donors, and the International Monetary Fund (IMF) have made it clear to Beirut that none of the $21 billion pledged to Lebanon will be delivered until an independent government is formed and reforms demanded in a roadmap, designed by Macron, are in the process of being enacted.

It is significant that Lebanon has been waiting for the first tranche of the foreign fund worth $11 billion since 2018. Offered more than a year before the country’s economic meltdown began, this sum might have saved Lebanon’s economy from collapse, contributed to the rebuilding of the country’s infrastructure, and provided jobs for tens of thousands of unemployed. Unable to trust the politicians to use the money as intended, the donors have frozen it. Macron has taken control of dispersement of this sum while the IMF withholds all but humanitarian aid until international conditions are met.

A virtual conference hosted by Macron last week sought to raise fresh humanitarian assistance on top of 289 million euros already dispersed to aid victims of the port debacle. This aid will be delivered to Lebanese and foreign non-governmental agencies for delivery directly to those in need — bypassing the government.

The European Union, UN, and World Bank put forward a $2.5 billion response plan to deal in the next 18 months with the fallout from the port blast. Their focus is to provide the most vulnerable people with grants and the government with loans for reconstruction depending on its “ability to demonstrate credible progress on reforms.”

Notably; “efforts should include the forensic audit of the central bank, banking sector reform, capital control, exchange rate unification and creation of a credible and sustainable path to fiscal sustainability.” The audit has been disrupted due to the failure of the central bank to provide data on accounts and operations. The US-based financial restructuring firm Alvarez & Marsal has withdrawn from its contract to conduct the audit, a priority demand of foreign donors and the IMF.

The bank used Lebanon’s banking secrecy laws as a pretext for denial of the essential documents which had also prevented the provision of information to the IMF which earlier pulled out of talks on a rescue package.

Former deputy governor of the central bank, Nasser Saidi, told Al Jazeera, “The bank’s reliance on banking secrecy laws to withhold information was ‘a pretence’ and that neither the central bank nor the finance ministry had ‘any willingness to undertake the forensic audit.”

Delivery of the money for both the private and public sectors depends on the politicians meeting these demands. The holdup means more money locked in the chest for Lebanon at a time the currency has lost 80 per cent of its value, 55 per cent of Lebanese are living in poverty, unemployment is soaring, and COVID infections average 1,500 a day.

British Foreign Office regional minister James Cleverly has warned that Lebanon, which imports 85 per cent of its food, is now “on the verge of not being able to feed itself.” Lebanon imports wheat, rice, sugar, fruit and vegetables as well as essential fuel and medical supplies. Cleverly called the situation a “man-made problem which could have been prevented.” He reiterated his demand of the politicians to “do what is needed and deliver reforms. The alternative will be horrific.” His remarks came as Beirut was about to end subsidies for critical foodstuffs and fuel, a step which victimises the already hungry poor and risk a popular revolt.

In a damning report entitled, “The Deliberate Depression,” the World Bank stated, “A year into Lebanon’s severe economic crisis, deliberate lack of effective policy action by authorities has subjected the economy to an arduous and prolonged depression.” The bank estimates the economy will contract by 19.2 per cent this year and by a further 13.2 per cent in 2021. “As things stand, Lebanon’s economic crisis is likely to be deeper and longer than most economic crises,” the bank stated.

Bank regional director Saroj Kumar Jha said, “Lack of political consensus on national priorities severely impedes Lebanon’s ability to implement long-term and visionary development policies.” He repeated the refrain calling for formation of a government capable of carrying out short-term emergency measures and addressing long-term structural problems.

So far, pleas for reform have fallen on the deaf ears of politicians determined to stay in power on order to protect themselves from prosecution. They have no care for the nation nor regard for its people.