Lebanon minister quits with warning over financial crisis

LEBANON’S foreign minister resigned yesterday, blaming the government for failing to address a financial crisis that he said threatened to turn the country into a failed state.

Nassif Hitti said in a statement: “I participated in the government under the logic of serving one boss, which is Lebanon, but I found that in my country there are many bosses and contradictory interests.”

He said the government had made no progress in implementing reforms demanded by international donors, adding: “If they don’t unite in the interest of the Lebanese people... then the ship, God forbid, will sink with everyone on board.”

Beirut turned to the International Monetary Fund for assistance after the debt-laden country defaulted on payments for the first time in March.

In the current crisis the economy has collapsed precipitously, but its causes were decades in the making. Since the end of the country’s 19751990 civil war, a sectarian, power-sharing system has maintained the peace by allocating posts according to sect rather than merit.

An entrenched political elite has pillaged nearly every sector of the economy. The system has been sustained by Lebanese banks offering high interest rates even as the country accumulated alarming levels of debt, which experts likened to a Ponzi scheme.

An attempt by the government last year to levy tax on the Whatsapp messaging app brought to a head decades of simmering anger at the corruption, sectarian-based self-dealing and incompetence.

Widespread protests were followed by a run on the banks, which responded with informal capital controls limiting dollar withdrawals or transfers.

The shortage of foreign currency caused the Lebanese pound, long pegged to the dollar, to shed 80 per cent of its value on the black market.

Prices for staple goods spiralled upwards in the country, where most food and goods are imported.