AMU Homeland Security Middle East Original

The New Government of Lebanon and Solving an Economic Crisis

By Ilan Fuchs, Ph.D.
Faculty Member, Legal Studies

This month, Lebanon finally has a new government. After 10 months, Prime Minister Najib Mikati was finally able to establish a government with the agreement of the many factions in Lebanon. This government needs to save Lebanon from what seems to be a gigantic economic crisis, a crisis so significant it might plunge Lebanon back into a civil war.

In an article that I wrote several months ago, I discussed the dire situation in Lebanon and how the economic crisis and the political impasse might inadvertently spark a new civil war. However, Mikati’s government was created with the goal of resolving the current economic crisis, working with international actors such as France and the International Monetary Foundation (IMF) to stabilize the Lebanese pound.

Who Is Prime Minister Najib Mikati?

Najib Mikati is a successful millionaire businessman and a Sunni Muslim (the Prime Minister in Lebanon is always a Sunni Muslim). Mikati was involved in previous governments and was aligned with the March 8th Alliance, headed by Hezbollah.

Mikati has created a government of technocrats. The 24 ministers might be allied with different political and religious factions in Lebanon, but it is too early to know.

Mikati is someone who will not challenge Hezbollah openly, so he will need to walk a fine line between the different factions in Lebanon. Among the Sunnis in Lebanon, there has never been support for Hezbollah. Mikati needs to make changes in Lebanon concerning both nationwide corruption and Hezbollah in order to garner international support and funnel money to Lebanon.

Lebanese economist Toufic Gaspard, an advisor to the IMF and Lebanon’s finance ministry, noted that Mikati “has a 50-50 chance of accomplishing anything, whether you look at it in terms of a program with the IMF or aid from the Arab countries.”

International Reaction

Reuters also reported that France was instrumental in creating the new government in Lebanon. France aided Mikati in different ways. Reuters noted that “one French diplomatic source said Paris had played a constructive role in bringing the government together, though the source added that some skepticism remained over whether Mikati would be able to carry out the necessary reforms.”

But if there is any hope for Lebanon and its future, France will not be enough. The most obvious potential ally is Saudi Arabia and things are not simple at all there.

The Saudi government has many problems with Hezbollah. As a proxy of Iran, the sworn enemy of Saudi Arabia, Hezbollah has been involved in direct action against Saudi Arabia in the Persian Gulf.

In an article published on September 12, 2021, Khalid bin Hamad Al-Malik, the editor of the Saudi daily Al-Jazeera, had some choice words on the topic. In a Memri translation of Al-Malik’s column, readers are left with no ambiguity as to the way things are seen from Riyadh:

“Lebanon will not return to life as long as [Michel] ‘Aoun, [Hezbollah secretary-general Hassan] Nasrallah and [Free Patriotic Movement leader Gebran] Bassil hold the reins of power, even if the [new] government was formed following concessions by Prime Minister [Mikati] and President [‘Aoun]. It is also said that President ‘Aoun has ensured himself a blocking third, even if only indirectly…

“Lebanese Prime Minister Mikati speaks of Lebanon as part of the [Arab] world, and says that it currently needs the help of [its] Arab brethren – as though the Arab countries are just cash cows whose role in Lebanon is limited to providing funds without [Lebanon having to enact] any reforms, and while Hezbollah continues to lead it into conspiracies against its sisters [the Arab countries].” 

Al-Malik did not mince words, adding: “When the Lebanese prime minister says that his Arab brethren must help Lebanon, he probably means Saudi Arabia, Kuwait, the UAE and Qatar, which Lebanon has relied on heavily [in the past] to resolve its economic and financial problems. But it won’t happen this time, unless the new government proves that Hezbollah has stopped its conspiracies against these countries, especially against Saudi Arabia.” 

The situation within Lebanon is not about moral support, but hard cash. Lebanon needs foreign currency. While petrodollars can save Lebanon’s economy, there will be a cost and it is unlikely that Hezbollah will be willing to pay the price.

What Is Next for Lebanon?

Middle East expert Michael Young of the Malcolm H. Kerr Carnegie Middle East Center aptly described the situation: “Mikati’s priority is to revive the electricity sector, the bleeding wound of the economy. The state now supplies one or two hours of electricity a day, on average, forcing people to rely heavily on private generator owners who charge market prices for fuel, which is excessively expensive for most consumers.

“The economic opportunity cost is also immense, as countless companies and businesses have closed down or reduced working hours due to shortages in electricity. Most importantly, the availability of fuel will allow Lebanon’s hospitals to function, as many had warned they might close down over the absence of fuel supplies to operate their generators.”

Mikati can either fix things or bring Lebanon to the brink of a civil war. He will need to navigate through the turbulent waters of Lebanese politics and without Hezbollah playing along,

Unfortunately, Mikati’s chances are not good. After all, Hezbollah has been a willing participant in the civil war in Syria and will not hesitate to destroy Lebanon to retain its power.

Dr. llan Fuchs is a scholar of international law and legal history. He holds a B.A. in Humanities and Social Science from The Open University of Israel and an M.A. in Jewish history from Bar-Ilan University. Ilan’s other degrees include an LL.B., LL.M. and Ph.D. in Law from Bar-Ilan University. He is the author of “Jewish Women’s Torah Study: Orthodox Education and Modernity,” and 18 articles in leading scholarly journals. At the University, Ilan teaches courses on international law while maintaining a law practice in several jurisdictions.

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