Islam Times - New Lebanese Govt, Challenges Ahead

Islam Times - Lebanon’s parliament on Saturday approved with the majority the new government Prime Minister Saad Hariri formed last week after nearly 9 months since the parliamentary elections.

The factor protracting the process that could be wrapped up within only a few weeks was the quota system in the ministerial posts distribution and particularly the Future Movement’s pressure to seize all Sunni posts contrary to the election results. The movement’s struggles failed at the end of the road and the popular tendency towards the Resistance camp, represented by Hezbollah and its allies, reflected itself in the cabinet structure as it did in the May 2018 elections.

For the first time, Hezbollah managed to hold the health ministry. Moreover, three more crucial ministries, that is foreign, defense, and finance, were obtained by the Hezbollah allies.

Although the collective understanding on the new cabinet structure and power distribution played a key role in the new cabinet, we should not forget that the outright vote of the parliamentarians to the new ministers is a sign of a consensus among the Lebanese leaders on the need to fast start the government to address the country’s critical conditions. One important issue is the economic crisis hitting the nation and the government’s inability to efficiently provide public services. Another challenge is the Syrian refugees whose number goes well beyond one million. Add to these the frequent Israeli violations and threats the new Lebanese government should deal with.

Economic crisis, reforms, and foreign loans burden

Addressing economic troubles the nation has been dealing with for nearly two years is the difficult task PM Hariri, 48, and his cabinet men should do. Lebanon is one of the world’s most indebted countries. The nation’s foreign debt from 1993 to early 2018 was said to be $16.1 billion. It dramatically went up to 35.6 billion since May 2018. This number, the financial figures showed, moved back to $33.3 billion since November last year. Still, there are no clear prospects that the country can settle its debts without introducing fundamental reforms to its economy. The fixed national currency rate, snowballing government expenses, and the loan repay average rate that accounts for 150 percent of the gross domestic product (GDP) require the new cabinet to fast start the work and never a moment disregard the worsening economic crisis.

Hariri, reading a statement on Tuesday, called for economic reforms especially in public services, mainly in the electricity sector which every year takes away some $2 billion of the government funds. He put a premium on the need for the electricity, corruption, and trash collection challenges to be settled.

Noting that Lebanon needed facilitation of the regulations for doing business and attracting the foreign and domestic investment, Hariri called on the parliamentarians to give a green light to his reform suggestions, a measure that, he claimed, will help his cabinet pursue infrastructural projects he saw necessary for the state economy’s revival.

Apparent enough, Hariri’s call for fast approval of the proposed reforms is connected to the international creditors’ demands for such economic changes. In April last year, at a donation conference for Lebanon held in the French capital Paris, foreign governments promised $11 billion in funds for Beirut.

But the very issue of loans from foreign and home sides is now open for heated debate among the Lebanese sides. For example, Hezbollah is contrary in view with the Hariri about the state’s $400 million loan from the World Bank. While the government pushes for this credit to fill the budget deficit gaps, repay the debts, and provide public services, Hezbollah and the like-minded groups express their concerns about the strong lobbies of the banks as the main foundation of the economic corruption and call for cutting the state privileges to the banks.

Hassan Fadlallah, a member of parliament representing Hezbollah, urged the government to “take serious the negotiations with banks, a serious and constructive dialogue to cut the national debts.” Announcing Hezbollah’s strong spirit to fight state corruption, he argued that the reforms should be “top-down.”

Economic vulnerability Achilles heel of counter-Israeli foreign policy

The first rays of the new cabinet’s foreign policy appeared in the foreign ministry’s statement which highlighted the necessity for Beirut to seek solutions to counter Israeli regime's violations. The dominant public view now is that the country should resist the Israeli threats and establish a balance of threat with Tele Aviv rather than negotiate and submit to the regime's pressures. This puts in the same path the foreign policy with the Hezbollah pro-resistance vision. Adoption of this course exhibited itself in the absence of the Lebanese politicians from the anti-Iranian Warsaw meeting arranged by the US and also Beirut’s support for the return of Syria to the Arab League.

But Lebanon foreign policy’s weak spot is its volatile economic conditions that open the door for the regional and international powers' intervention under the cover of economic help. Saudi Arabia was first to struggle for meddling. In an effort to rebuild its lost regional credibility, Riyadh lifted the ban on the Saudi citizens traveling to Lebanon in place since 2016. The move came as in the same year the Arab monarchy withdrew a $4 billion aid package to Beirut after it found its foothold on the shaky ground in the country at that time. But recently, the Saudis reiterated their readiness to provide aids to Lebanon. Saudi Finance Minister Mohammed al-Jadaan made the pledge during World Economic Forum in Davos, Switzerland.

The Saudis’ offer is also driven by an attempt not to lose the initiative to rival Qatar. Earlier this year, Doha said it planned to buy $500 million Lebanese government bonds in a bid to support the crisis-hit economy.

Iran is also another sway holder and a recognized player in Lebanon which just contrary to others seeks to cut the Lebanese reliance on the foreign funds. During his visit to Beirut last week, Iran’s Foreign Minister Mohamad Javad Zarif offered Iranian air defenses and use of the national currencies for the bilateral trade to the Lebanese leaders.