Lebanon gets new government after three months of protest

Lebanon unveiled a new cabinet lineup on Tuesday, some three months after mass protests against entrenched corruption brought down the government and shook the economy.

The incoming team of 20, led by former education minister Hassan Diab, will have to act fast to address the country’s worst financial and economic crisis in decades. Tens of thousands of people have taken to the streets in recent months to demand a wholesale overhaul of the country’s sectarian power-sharing system, exacerbating an economic decline years in the making and raising investor concerns that Lebanon could default on its debt obligations for the first time.

Remittances and other inflows on which Lebanon’s economy has traditionally relied have plummeted as confidence has dwindled, prompting banks to impose informal limits on the withdrawal and transfer of hard currency in a bid to hold on to what remains of their reserves. The pound has weakened by more than a third against the dollar on the black market since protests began on October 17, triggered by plans to tax a popular messaging application.

When he was first named as prime minister more than a month ago, Diab promised the people a government of experts to lead them out of crisis. He repeated that pledge on Tuesday, vowing that his team, replete with holders of advanced decrees, would work to meet the core demands of protesters, which range from a clamp-down on corruption to a new, more equitable election law to prepare the country for a fresh vote.

“I salute this uprising that has pushed toward this path in which Lebanon emerged victorious,” he said in his first speech after the cabinet was formed.

“This government represents the aspirations of protesters across the nation and will work to satisfy their demands.”

New Faces, Old Tactics
Many of the new ministers are little-known to the public, having spent their careers in academia or the professional realm, but are still considered to have political loyalties.

Incoming Finance Minister Ghazi Wazni, for instance, is a well-known economist close to veteran parliament speaker Nabih Berri. Nassif Hitti, a former diplomat and expert in international relations, was named foreign minister. Raoul Nehme, a well-known banker, was named minister of economy. For the first time, a woman, Zeina Adra, was appointed to the defense portfolio in a government that includes six women, the largest share in Lebanon’s history.

The lineup was agreed after more than a month of wrangling between Berri, the pro-Iranian Hezbollah militia, the Free Patriotic Movement founded by President Michel Aoun and a handful of other political parties considered by protesters to be part of the old regime that needs to go.

The stakes are high for Lebanon, which straddles the region’s geopolitical fault lines and has often been a proxy battleground for the Middle East’s broader conflicts. The 15-year civil war ended in 1990 but still haunts a country where warlords became the rulers and have remained in power ever since.

Even before the names were unveiled, protesters had begun pouring into the streets of downtown Beirut and blocking major thoroughfares to its north and south to reject a government they said had been divvied up by those same political figures and would not work in the people’s interests.

More Protests
Protests turned violent in recent days and hundreds were wounded in scuffles with riot police, who used tear gas and water cannons to disperse demonstrations in the capital. Security was tight in central Beirut, home to the parliament building and other government and bank offices, which have come under attack from rioters in recent days.

“We waited all this time, only for them to divide up the cheese as they always did,” said one protester, carrying a Lebanese flag, who appeared on LBCI television. “This government will not pass.”

Demonstrators also returned to the street in the northern city of Tripoli, an epicenter of the movement for political change, where they complained that the new lineup was “one color” — dominated by Shi’ite Muslim Hezbollah and its allies after their key opponents stepped down.

Economic Challenges
Former Prime Minister Saad Hariri, a Sunni Muslim who resigned in late October, had vowed to implement much-needed fiscal and structural reforms to unlock $11bn in international aid pledged in 2018, but complained that political disagreements inside his national unity government hampered progress.

A conference of international backers convened in Paris in the midst of the protests has raised hopes among many Lebanese that the formation of a new government would accelerate access to that support.

Lebanon’s precarious financial situation has many investors pricing in a sovereign default. A $1.2bn Eurobond that matures in March saw a record slump last week, fueled by reports local lenders have been selling the instruments to avoid participating in a central bank-initiated voluntary debt swap.

The Lebanese pound has plunged on the black market to some 2,500 against the US dollar since the protests began on October 17, while the central bank has stuck to the official rate of 1,507.

Hours before the government was announced, Lebanon’s money changers announced that they would sell dollars at no more than 2,000 starting on Thursday in an effort to ease the burden of price gains on consumers.