‘God help this country:’ Lebanon’s political stalemate speeds financial collapse

MARK MACKINNON

SENIOR INTERNATIONAL CORRESPONDENT
BEIRUT

Former Lebanese prime minister Saad Hariri delivers a statement after the president named him to form a new cabinet, at the presidential palace in Baabda, east of the capital Beirut on Oct. 22, 2020.

ANWAR AMRO/AFP/GETTY IMAGES

When former Lebanese prime minister Saad Hariri announced Thursday that he had again failed to form a new government, he sounded like he was giving up on something much bigger than a return to his old job. “God help this country,” he said on television, hours after resigning as prime minister-designate.

The significance of the moment was quickly reflected in the money markets, where the Lebanese pound took another steep dive against the U.S. dollar, and on the streets, where angry protesters blocked roads and clashed with soldiers. The scenes of people sealing off their neighbourhoods with burning barricades were worryingly reminiscent of the country’s 1975-1990 civil war.

The clashes continued Friday. Thirty protesters were injured in the northern city of Tripoli after the army used tear gas and fired live ammunition into the air to open a road that had been blocked by stone-throwing demonstrators. Mr. Hariri’s supporters also blocked roads in parts of Beirut.

The inability of Mr. Hariri, the country’s top Sunni Muslim politician, to agree on the shape of a cabinet with President Michel Aoun, a Christian who is backed by Hezbollah, a Shia Muslim militia backed by Iran, portends more instability in a country already in the throes of multiple crises.

Lebanon has been without a fully empowered government since last year, when Prime Minister Hassan Diab resigned in the wake of a massive explosion in the port of Beirut that killed more than 200 people. Mr. Diab, who also has the support of Hezbollah, remains in the post in a caretaker role, and attempts to investigate the blast have been obstructed by his cabinet. (The source of the explosion was a warehouse full of ammonium nitrate – a chemical compound that has both agricultural and military uses – left unattended in the port for seven years.)

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Lebanese army take cover behind shields as they deploy during a protest after Hariri abandoned his effort to form a new government.
MOHAMED AZAKIR/REUTERS

In the meantime, the country has slipped into a deep financial crisis, one that has seen its currency lose more than 90 per cent of its value against the U.S. dollar, creating shortages of fuel, medicines and other essential goods in the import-reliant country. The International Monetary Fund has called for the formation of a government of technocrats – mandated to undertake deep reforms – as a precondition to any bailout.

Mr. Hariri said he arrived at Mr. Aoun’s official residence Thursday with a 24-member cabinet roster that he believed would garner the support of the international community. When Mr. Aoun demanded changes to the list, Mr. Hariri resigned, calling it “a moment of truth for Lebanon.”

The Lebanese pound, which was trading near 19,500 to the U.S. dollar before the meeting, quickly plunged and by Friday was trading at 24,000 to the U.S. dollar on the black market. Two years ago, it cost just 1,500 Lebanese pounds to buy one dollar, an exchange rate that had held steady for more than two decades.

“The ripple effects are direct. Any change in the exchange rate affects the pricing of raw materials right away … and the purchasing power of people is decreasing day by day,” said Abdul-Rahman Zahzah, the owner of T Marbouta, a popular restaurant in the Hamra neighbourhood of Beirut.

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Supporters of Hariri clash with Lebanese soldiers in Beirut.
HUSSEIN MALLA/THE ASSOCIATED PRESS

Lebanon’s political stalemate is snarled in regional politics that see the United States, France and Saudi Arabia unwilling to support a government affiliated with Hezbollah, while Iran is unwilling to give up the clout it has gained in a country that shares borders with both Israel and Syria. France, the former colonial power in Lebanon, announced Friday that it would host an aid conference on the first anniversary of the Aug. 4 port explosion.

Kim Ghattas, the Beirut-based author of Black Wave, a book about the Saudi-Iran rivalry across the Middle East, said Lebanon’s fate may be tied to the 2015 Iran nuclear deal, which saw Western countries lift sanctions in exchange for Tehran agreeing to curb its nuclear program.

U.S President Joe Biden has committed to rejoining the pact, from which Donald Trump withdrew in 2018, but negotiations have thus far gone slowly. New questions about the deal’s fate have also emerged after Iran’s election of a hardline president-elect, Ebrahim Raisi, who takes power in August.

“No nuclear talks until August means probably no new cabinet in Lebanon,” Ms. Ghattas told The Globe and Mail. “No cabinet until then. No compromise.”

Meanwhile, Lebanon’s professional middle class is continuing to leave the country. “It’s a total collapse. It’s something we’ve never witnessed before. We will never be able to rehabilitate ourselves after this crisis – it’s huge what’s coming,” said John Achkar, a comedian and social activist who formed a non-governmental organization called Rise Up Lebanon to help small businesses affected by last year’s port explosion.

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John Achkar at a comedy show in Beirut, Lebanon.
RAFAEL YAGHOBZADEH/THE GLOBE AND MAIL

A year ago, the 30-year-old Mr. Achkar told The Globe that he was committed to staying in Lebanon to fight for change. These days, he spends most of his time in Dubai. He said he realized the fight was lost in February when Lokman Slim, a prominent activist and critic of Hezbollah, was shot dead in his car.

“I think I’m friendless now. Everyone I know has left,” said Daniella Khalil, Mr. Achkar’s 26-year-old colleague at Rise Up Lebanon. Ms. Khalil has remained in the country but said she too is making plans to go abroad. “Before, [leaving Lebanon] was an achievement. Now, it’s a matter of survival.”