Mikati, al-Rahi discuss Lebanon's crises as war knocks fragile economy
Caretaker Prime Minister Najib Mikati and Maronite Patriarch Beshara al-Rahi agreed, during a meeting in Bkerki, that resolving the Lebanese crises starts with the election of a president.
Lebanon has been without a president since Michel Aoun's term ended in October last year, while its government has been running in a limited caretaker capacity. The head of the General Security agency retired in March without a replacement, and the central bank governor's mandate expired in July, without a clear successor.
Parliament recently extended the army chief's mandate, averting a military power vacuum. His departure in January would have added another gap to crisis-hit Lebanon's withering and paralyzed institutions but the FPM said its lawmakers will submit an appeal against the law before the constitutional council, as it considered it unconstitutional.
Tensions surged between Mikati and FPM Defense Minister Maurice Slim due to disputes over military appointments, including the extension of the term of Army chief Joseph Aoun. A new army chief of staff and two members of the military council are yet to be appointed.
In addition to discussing the economic and political crises, Mikati and al-Rahi discussed the border clashes in south Lebanon between Israel and Hezbollah.
The ripple effects of the war in Gaza are also knocking Lebanon’s fragile economy, which had begun making a tepid recovery after years of crisis, back into recession.
The solution to the current cross-border hostilities "is the implementation of international resolutions", including Resolution 1701, Mikati said after the meeting.
"We are totally ready to commit to their implementation, on condition the Israeli side does the same, and withdraws -- according to the international laws and resolutions -- from occupied territory," he added.
The premier was referring to territory claimed by Lebanon that remains occupied following Israel's withdrawal from the country's south in 2000: the disputed Shebaa Farms, the Kfarshouba hills and the Lebanese side of the village of Ghajar.
U.N. Security Council Resolution 1701, which ended a 2006 war between Israel and Hezbollah, called for the removal of armed personnel south of Lebanon's Litani River, except for U.N. peacekeepers and the Lebanese army and state security forces.
The tensions on the border have put a major damper on travel to Lebanon, at least temporarily.
The World Bank projected in a report that instead of growing slightly in 2023, Lebanon’s GDP will shrink by -0.6% to -0.9%.
“Lebanon’s reliance on tourism and remittance inflows is neither a viable economic strategy nor an economic crisis resolution plan,” the report noted. “Because tourism tends to be volatile and subject to external and internal shocks ... the sector cannot substitute for more sustainable and diverse drivers of growth.”
Lebanon fell into a protracted economic crisis in 2019, with inflation hitting triple digits and the local currency collapsing. The lira, which had been pegged at 1,500 to the dollar for a quarter century, now goes for around 90,000 on the black market.
Before the war, many of Lebanon’s leaders had been banking on tourism and remittances to drive an economic recovery, hoping to sidestep reforms required to clinch an International Monetary Fund bailout package. Lebanon reached a preliminary deal with the IMF in April 2022 for a $3 billion rescue package but has not completed most of the reforms required to finalize it.
Caretaker Deputy Prime Minister Saade Chami, one of the few Lebanese officials still pushing for an IMF deal, said Thursday that Lebanon had made “no progress to speak of” in recent months on implementing the rest of the required reforms. However, he pushed back against perceptions that the deal is dead.
IMF officials “are still engaged,” Chami said, “but they’re waiting for us to do what we are supposed to do.”
Source: Naharnet
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