BEIRUT — Lebanon's new government, finally formed in
the throes of an accelerating economic meltdown after 13 months of political
deadlock, has its work cut out.
اضافة اعلان
What are the most pressing issues for the
cabinet announced
on Friday, and how easy will they be to tackle?
What are the priorities?
Prime Minister Najib Mikati's 24-member cabinet desperately
needs to lift Lebanon out of what the World Bank has called one of the planet's
worst economic crises since the 1850s.
The Lebanese pound has lost more than 90 percent of its
value to the dollar on the black market, inflation has soared and people's
savings are trapped in banks.
With foreign currency reserves plummeting, the cash-strapped
state has been struggling to maintain subsidies on basic goods.
Petrol and medicine have become scarce, the state barely
provides two hours of electricity supply a day, and almost 80 percent of the
population now lives in poverty.
"The first priority for the government really will be
to stem the collapse," said Maha Yahya, director of the Carnegie Middle
East Center.
Subsidies needed to be lifted and a safety net put in place
to ease the blow on the most vulnerable, she said.
To do this, analysts have said, the cabinet will need to
relaunch talks with the International Monetary Fund to unlock billions of
dollars in financial aid.
After defaulting on its debt in March 2020 for the first
time in history, Lebanon started talks with the IMF, but these quickly hit a
wall amid bickering over who should bear the brunt of the losses.
Will this be easy?
The international community has demanded sweeping reforms
and a forensic audit of the country's central bank before any financial
assistance is disbursed.
The previous government in 2020 announced a rescue roadmap
that included electricity sector reform, restructuring the banking sector and
lifting the official dollar peg.
But it has yet to be implemented.
As for the central bank audit, it too has stalled, with the
central bank claiming it could not provide the auditing firm with some of the
required documents because of banking secrecy.
Economist Mike Azar said that reforming the oversized
commercial banking sector and central bank, as well as restructuring the public
sector, would be key for any deal with the IMF.
"There isn't anything you can do short of these two
major restructurings," he told AFP.
But the traditional ruling class that has dominated politics
in Lebanon since the 1975-1990 war was likely to be reluctant.
"Restructuring the public sector has an impact on the
political parties, as it is the main financing source for their" patronage
system, he said.
"How would they accept that?"
Although some of the 24 new ministers in Mikati's cabinet
are technocrats, all have been endorsed by at least one of Lebanon's many
competing political parties.
Yahya said drawing up a medium- to long-term rescue plan for
the country would be a "major challenge" as the new government lacked
any political consensus.
"This government was formed with the business-as-usual
mentality so everybody there represents one political leadership or the
other," she said.
This means political parties "can use the ministers
within the government to block any reform they see as undermining their
interests or unpopular in the street".
Will there be elections?
Mikati on Friday vowed to hold May 2022 parliamentary
elections on time.
In a country rocked in 2019 by protests calling for the
overhaul of the entire political class, some activists see this as a chance to
vote out an old guard deemed incompetent and corrupt, and bring in younger experts
to actually represent the people's best interests.
But analyst Michel Doueihy said the political parties in
power since the end of the civil war were ready to do anything to cling on to
power.
The traditional ruling "class is trying through this government
to catch its breath" and restore some credibility ahead of the next
parliamentary elections, he told AFP.
He said their tactics could even include postponing the
polls.
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