Lebanon’s leadership vacuums threaten full economic collapse

Lebanon’s problems are deepening as political and financial leadership vacuums loom, threatening to further plunge the country into what is already an unprecedented economic collapse.

For the past eight months, Lebanon has been without a president, leaving a caretaker prime minister and cabinet unable to tackle the tiny Mediterranean country’s slide into its worst economic crisis, which has thrown most of its population into poverty.

Caretaker Prime Minister Najib Mikati has called on the bitterly divided Parliament to elect a new president to start a recovery process, but it has failed to do so in more than 12 attempts.

Many fault Iran-backed powerbroker Hezbollah for insisting on a candidate it backs.

The country’s entrenched elite — including some in power today — is blamed for the decades of financial mismanagement and corruption. Central bank governor Riad Salameh has been in the job for three decades. His term expires this month with no permanent successor announced.

Lebanon’s General Directorate of General Security intelligence agency now has an acting head.

Analyst Dania Koleilat Khatib tells VOA sectarian political leaders focus on their own communities to maintain power at the expense of addressing the nation’s ills.

Khatib heads the Beirut-based Research Center for Cooperation and Peace Building.

“It can’t continue, but why do you think they care? These politicians like [Parliament Speaker Nabih] Berri, [influential Druze leader Walid] Jumblatt, and not only Hezbollah. They have billions of dollars outside. They can always bring and distribute to people to keep their loyalty,” Khatib said.

“In January next year, the commander of the army will have to leave because he will reach the age of retirement. So, we will have no central bank leader [governor], no commander of the army, no nothing, and this doesn’t really bother Hezbollah and politicians because they care to stay as the leader of their own people.”

Lebanon’s local currency has lost about 98% of its value against the dollar during the past four-year financial meltdown. Although Lebanon signed an agreement with the International Monetary Fund last year, it has not met the conditions to secure a full $3 billion financing program. Lebanon’s financial crisis has been aggravated by vested interests resisting crucial reforms needed for recovery, the IMF said in a report issued last month.

GDP has contracted by 40% and inflation is now in triple-digits, while two-thirds of the central bank’s foreign currency reserves have been drained. The IMF warns that without reforms, Lebanon’s public debt could reach 547% of its gross domestic product by 2027.

Lebanon’s influential Maronite Patriarch Bechara Boutros al-Rahi has urged lawmakers to “stop wasting time while the institutions are collapsing one by one pending outside inspiration,” and to expedite the election of a president to solve the crisis.

“It’s an old cliche, but once again Lebanon is dancing on a volcano, and we are on the verge of a fully-fledged state collapse. Many significant state institutions are no longer working at all, civil servants are no longer showing up,” political analyst Karim Bitar told Dubai’s The National.

Bitar is an international relations professor at Saint Joseph University in Beirut. “Lebanon is becoming dysfunctional,” Bitar said. “The political establishment is using delaying tactics, gaining time, and basically trying to delay the inevitable collapse.”

Although observers see these developments posing the gravest threat to Lebanon’s stability since the end of its civil war three decades ago, analyst Khatib said other factors led to that conflict. However, she says, more Lebanese now speak about federalism as a possible way out.

VOA