Without a president, reformed, bankrupt Lebanon somehow hangs on

Members of Lebanon’s parliament spoke on Thursday ahead of the start of its 11th session to elect a new president. They failed again. Photo: Wael Hamzeh/EPA-EFE

This is not the first time Lebanon has faced a presidential vacuum.

Aoun came to power in 2016 after a 2½-year vacancy in elections that Hezbollah forced on him. The powerful Shiite party has again blocked the election of a new president, with its lawmakers and allies voting blank to either impose its new candidate, Suleiman Frange, or wait for a regional settlement to be compromised.

Left with a caretaker government with limited powers and a parliament paralyzed by endless disputes, Lebanon is once again politically paralyzed, further exacerbating its compound crisis, delaying recovery plans and prolonging the people’s struggle.

“The government has done nothing to resolve the crisis. I don’t think they have the intention to do so because they don’t want to hold the perpetrators accountable,” said Hilal Khashan, a professor of political science at American University. Beirut, told UPI. “They don’t care.”

daily struggle

The Lebanese pound continues to depreciate sharply, losing more than 97% of its value since the onset of the crisis in 2019. It hit an all-time low of 54,000 Lebanese Lebanese per dollar on Tuesday, compared with 1,500 Lebanese Lebanese before the crisis.

The government has slashed subsidies for fuel, wheat, medicine and other basic commodities, leaving more than 80 percent of the population living below the poverty line with no social protection. The power crisis is getting worse, with the state-run utility providing power for only an hour occasionally.

Civil servants, teachers, judges and others have been on strike for higher wages, disrupting daily life.

Inflation is expected to average 186% in 2022, the highest in the world, according to the World Bank. Calling Lebanon’s financial crisis a “deliberate depression,” the worst in the world since 1850, the bank accused the government of “inadequate policy response” and the abuse and abuse of a large portion of people’s bank savings, Estimated at $107.2 billion and adding to social misery unnecessarily.

To the Secretary-General of the United Nations Anthony Guterresthe country’s collapse was caused by “something akin to a Ponzi scheme.”

Sharp criticism and international calls for the country to emerge from the disaster fell on deaf ears.

Khasan called Lebanon “a failed state”, citing a failed political system, sectarian and corrupt political elite cartels and a corrupt bureaucracy that reflected the country’s divisions.

Lebanon, created by France in 1943 as a religious-political system, was structured such that “the resources of the system were allocated not by the state but by sectarian leaders,” creating a client-based relationship, he said , people “feel the loss of their denominational leader.”

“This sectarian system simply doesn’t work and has to change,” Kashan said. “Unfortunately, I don’t think the situation has changed, but it has gotten worse with poverty and people getting closer to sectarian leaders.”

entrenched politician

The first post-collapse parliamentary elections that took place last May resulted in the re-election of most representatives of the well-entrenched political class.

Negotiations with the IMF have remained deadlocked despite a staff-level agreement on a $3 billion bailout last April. The agreement is subject to approval by the IMF’s Executive Board. In addition, reaching an agreement on a comprehensive reform agenda means that Lebanon’s main political parties must agree on how to distribute the estimated $72 billion fiscal damage.

“It’s $3 billion over three to four years. It’s very small compared to Lebanon’s needs,” Sami Geadah, associate fellow at the Issam Fares Institute for Public Policy and International Affairs and former alternate executive director at the IMF, told United Press International.

However, an agreement with the IMF is needed to restore Lebanon’s credibility and open the way for more international financial support, Geadah said.

“If we have a plan with the IMF, there will be more support from other donors and creditors, probably around $10 billion … investors will also be encouraged,” Geadah said.

Observers say it all depends on Lebanese politicians and their willingness to agree on a recovery plan and seal a deal with the IMF. They have yet to agree on the allocation of losses and are still discussing a capital control law that should have been in place at the start of the crisis.

“Honestly, the track record so far has not been great,” Geadah said. “Tackling the crisis in the first place didn’t happen. That’s why things got so bad.”

Still, he noted, “there’s a lot that can and should be done, regardless of the IMF.”

Referring to the electricity crisis, he asked why it should be linked to the IMF, which if resolved could “help achieve some of the objectives of the IMF’s Balance of Payments and Competitiveness Program”.

traumatized people

It’s baffling how Lebanon is still functioning and moving on. Traumatized by the events and showing little resistance, the population has been adjusting to their new life, relying on international humanitarian aid and support from the Lebanese diaspora.

“The worst may be over in terms of economic contraction. The World Bank estimates that the decline in GDP last year was less severe than in previous years,” Geadah said.

According to caretaker Prime Minister Najib Mikati, after two years of deep recession, the economy will grow by almost 2% in 2022, largely due to higher tourism receipts and increased remittances from Lebanese abroad this year. estimated at $7 billion.

But there is also “very large unseen or unseen revenue,” said Riad Tabbarah, a former Lebanese ambassador to Washington, noting that the captagon trade in Syria brings in about $20 billion. of the proceeds, the drug is smuggled into Gulf countries and Europe.

There’s also money laundering, suspected of being behind the country’s start-ups.

Lebanon technically should have starved to death, but no one actually died of starvation, Tabara said, insisting that it was in the international interest to avoid total collapse and chaos.

“Wherever there is danger, they will come to support Lebanon … and they don’t want to see institutions no longer functioning or the military disintegrated,” he said.

External powers, tired of every intervention, are clearly changing their strategies and tactics, realizing the need to help Lebanon “stand its ground”.

“This means moving from humanitarian aid to a new phase, aid to developing state institutions,” Tabara said. “This change is a major change.”