Lebanon forms new government after yearlong deadlock as financial crisis deepens

Lebanon’s new Prime Minister Najib Mikati pledged Friday to do everything in his power to halt the country’s dramatic economic collapse, urging fractious politicians to work together after a new government was announced — the first in over a year.

Holding back tears, Mikati, one of the richest men in the country, spoke about Lebanese mothers who cannot feed their children, and students whose parents can no longer afford to send them to school.

“The situation is difficult but not impossible to deal with if we co-operate,” Mikati told reporters at the presidential palace, where the new government was announced.

The agreement breaks a 13-month deadlock that saw the country slide deeper into financial chaos and poverty over the past year.

Lebanon has been without a fully empowered government since the catastrophic Aug. 4, 2020, explosion at Beirut port, which forced the resignation of then-Prime Minister Hassan Diab’s government. Rival political groups had been locked in disagreement over the makeup of a new government since then, hastening the country’s economic meltdown.

A man wearing a protective mask against the coronavirus stands across the road from the damaged grain silos of Beirut’s harbour on Aug. 5, 2020, one day after a powerful twin explosion tore through Lebanon’s capital. (STR/AFP/Getty Images)

The new cabinet of 24 ministers headed by Mikati, a billionaire businessman, was announced by the president’s office, and later by the Secretary-General of the Council of Ministers, Mahmoud Makkieh. Ministers were hand-picked by the same politicians who have ruled the country for the past decades, blamed by many for corruption and mismanagement leading to the country’s current crisis.

Many of them, however, are experts in their field, including Firas Abiad, director general of the public hospital leading the coronavirus fight who has won praise for his transparency in handling the pandemic. A top central bank official, Youssef Khalil, was appointed as finance minister, and Bassam Mawlawi, a judge, is the new interior minister.

‘Stop the collapse’

The new government faces a mammoth task that few believe can be surmounted, including undertaking critically needed reforms. Among its first jobs will be managing public anger and tensions resulting from the lifting of fuel subsidies expected by the end of the month, overseeing a financial audit of the central bank, and resuming negotiations with the International Monetary Fund for a rescue package. The new cabinet is also expected to oversee general elections scheduled for next year.

Mikati, a businessman tycoon from the northern city of Tripoli, was tasked with forming a new government in July. He is widely considered to be part of the same political class that brought the country to bankruptcy. He served as prime minister in 2005 and from 2011 to 2013.

“I hope we can fulfil people’s aspirations and at least stop the collapse,” he said Friday. He said the government will launch a rescue plan for the country.

Mikati meets with Lebanese President Michel Aoun, left, at the presidential palace in Baabda, east of Beirut, on Friday in this photo released by the Lebanese government. (Dalati Nohra/Lebanese Official Government/The Associated Press)

It was not immediately clear what sudden compromise resulted in the breakthrough Friday. The announcement of a new government comes after recent U.S. and French pressure to form a cabinet, after Lebanon’s economic unravelling reached a critical point with crippling shortages in fuel and medicine threatening to shut down hospitals, bakeries and the country’s internet.

The currency has lost 90 per cent of its value to the dollar since October 2019, driving hyperinflation and plunging more than half the population into poverty.

Mikati became a favourite for the post after he was endorsed by most of Lebanon’s political parties, including the powerful Iran-backed militant Hezbollah group and the other major Shia party, Amal, led by Parliament Speaker Nabih Berri. Mikati was also endorsed by former Sunni prime ministers including former prime minister Saad Hariri, who abandoned efforts to form a government earlier this year after failing to agree with President Michel Aoun on the cabinet’s makeup.

The international community has refused to help Lebanon financially before wide reforms are implemented to fight widespread corruption and mismanagement.

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