Lebanon impasse deepens as financial strains grow


By Tom Perry and Laila Bassam

BEIRUT – Lebanon’s political impasse has deepened after a tentative deal on a new prime minister unraveled, leaving the country rudderless as it grapples with the worst economic crisis since the 1975-90 civil war.

Six weeks since Saad al-Hariri resigned as prime minister, prompted by protests against the ruling elite, the financial crisis is generating concerns for Lebanon’s stability: banks are enforcing capital controls, dollars are scarce, and the Lebanese pound has lost a third of its value on a black market.

France confirmed it would host an international conference in support of Lebanon on Wednesday, saying this aimed to press Beirut to quickly form a government to restore the economic situation.

But analysts saw little prospect of a quick end to a standoff that reflects an old power struggle between Hariri, who is aligned with Western and Sunni Muslim Gulf Arab states, and adversaries including the Iran-backed Shi’ite group Hezbollah.

“They are trying to see who can scream first and it is too dangerous a game,” said Mohanad Hage Ali, a fellow at the Carnegie Middle East Center.

“There are deep miscalculations by all political sides about how this will unfold. The old type of politics does not apply.”

The impasse returned to square one on Sunday when businessman Samir Khatib withdrew his candidacy to be prime minister, after the Sunni religious establishment said it wanted Hariri in the job, which is reserved for a Sunni.


Hariri has said he would only return to lead a cabinet of specialist ministers, believing this is the way to address the economic crisis, attract foreign aid, and satisfy protesters who have been in the streets since Oct. 17 seeking the removal of an entire political class blamed for state corruption and misrule.

But Hezbollah and its allies including President Michel Aoun say the government must include politicians.

Hariri has not commented since Khatib withdrew his candidacy. A political source said his position was unchanged.

A senior source familiar with the view of Hezbollah and its Shi’ite ally Amal said Hariri should be now designated prime minister. This would enhance the legitimacy of the Hariri-led caretaker government if a new cabinet was delayed, the source said.

The economic crisis has been building for years due waste and corruption that have landed Lebanon with one of the world’s heaviest debt burdens. Lebanon won pledges of more than $11 billion in financing at a Paris conference last year, conditional on reforms it failed to implement.

The French foreign ministry said Wednesday’s meeting “aims to detail the conditions required and indispensable reforms expected from the Lebanese authorities so that the international community is able to accompany Lebanon”.

Many people have lost jobs or had their salaries halved. In the space of one week alone, more than 60 firms had submitted requests to sack their entire work force, the caretaker labour minister said last week.

“The government will not be formed quickly,” political commentator Rajeh Khoury said. “The country is in a state of economic collapse and political bankruptcy.”




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