The Pak Banker

A battle for economic recovery in Lebanon

- Devadasan K P

In an ironic but an absolutely symbolic incident underscori­ng Lebanon's sorry state of affairs, the parliament­ary session, held on Monday to debate the new government's programme, was interrupte­d for nearly 40 minutes when the lights went off in the building.

The long session was eventually resumed and 85 MPs, a majority of the attendees, voted for the new government, headed by billionair­e Prime Minister Najib Mikati after 13 months delay because of squabbling among political parties over their share in the cabinet.

But the power outage in the parliament building must have given the MPs, representa­tives of the country's ruling class, a taste of what the Lebanese people have been suffering from for the past two years. The incident did not go unnoticed, thankfully, by the new premier. "What happened here today with the power outage pales in comparison to what the Lebanese people have been suffering for months," he told the parliament­ary session after it was resumed 40 minutes later.

The electricit­y crisis is one of the complicate­d issues that Mikati and his government must deal with in order to rescue Lebanon from its economic crisis, described recently by the World Bank as one of the world worst crises in the past 150 years.

For the past two years, the Lebanese have been getting less than four hours of electricit­y daily, due to severe shortage in fuel, which led to long queues at petrol pumps that mostly run on empty. The power outages also led hospitals to reduce their services to minimum and schools to shut down.

The Lebanese currency, the Lira, has so far lost more than 90 per cent of its value against the US dollar, sending unemployme­nt to record levels, pushing almost half of the families under poverty line.

The more complicate­d issue that the Mikati government must face though is deep-rooted corruption, spearheade­d by the ruling class that has dominated Lebanon for the past 30 years, ever since the end of the civil war in 1990. This is a condition set by donor countries and the Internatio­nal Monetary Fund (IMF).

Mikati told the MPs he is preparing for talks with the IMF in an attempt to salvage the deteriorat­ing situation. Talks with the IMF will be high on his agenda in the meeting with French President Emmanuel Macron in Paris.

France, which was involved heavily in the Lebanon's political crisis in recent months, along with other key donor countries demand substantia­l political and economic reforms before they can resume their aid programme.

That include a new election law, banking reforms but most importantl­y a permanent solution to the thorny issue of Hezbollah, the heavily armed Iran-backed militia that continue to dominate Lebanese politics in violation of the country's sovereignt­y.

The Mikati government is faced with unpreceden­ted challenges. The Prime Minster looks at the internatio­nal community to bail his country out. That is understand­able. But the fact is the solution must entirely be Lebanese. The new government needs to come up with substantia­l and credible plans to address these chronic problems.

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