Billionaire tycoon named as Lebanese PM as economic crisis bites

After a year-long standoff, Lebanon has named a new prime minister who its feuding factions hope can ward off a total economic collapse and save an estimated 2 million people from the brink of poverty.

Protesters had demanded the selection of a figure removed from the political elite, but the Lebanese parliament instead named a billionaire tycoon, Najib Miqati, who had led the country twice before, with little success, and was accused by a state prosecutor in 2019 of embezzlement – a charge he denies and has described as politically motivated.

The naming of Lebanon’s richest man, who hails from its poorest city, Tripoli, was seized on by many Lebanese people as evidence that the small Mediterranean state is all but ungovernable – unable to reform even to save itself from ruin, and immune to the demands of its citizens.

Lebanon’s economic and financial crisis began in late 2019 and has steadily worsened. Poverty has soared in the past several months as the situation spirals out of control, with dire shortages of medicines, fuel and electricity. The Lebanese pound has lost around 90% of its value to the dollar, driving hyperinflation.

Miqati’s nomination would be the third so far since the government of Hassan Diab resigned in the wake of the massive explosion at Beirut’s port last August. Since then, Diab’s cabinet has acted only in a caretaker capacity, compounding Lebanon’s paralysis further.

The international community, led by France and the EU, had made billions of dollars in aid conditional on the implementation of widespread reforms across all aspects of government and a leader who could push through fundamental changes to governance, curbing endemic graft and allowing the state to deliver services.

Miqati was nominated on Monday, after the prime minister designate, Saad Hariri, lost a protracted tussle for power with the country’s president, Michel Aoun, and stepped down. He now faces an uphill battle to name a cabinet that would be accepted by Aoun, and win the approval of donor states who vowed not to pour more money into Lebanon without guarantees of probity.

As Lebanon has crumbled, its leaders have faced a growing threat of sanctions from France and the EU. European leaders do not see the return of Miqati as the breakthrough that was demanded. However, senior officials said they would reserve judgment until Miqati named a ministerial line-up.

“After that, the decision becomes about whether these ministers could really be empowered to do things differently,” said one European official.

Mohanad Hage Ali, the communications director of Carnegie Middle East Center, said corruption allegations from the last time Miqati was prime minister had not been addressed.

“For the protest movement, Miqati embodies the misconduct of the past governments, as he represents two facets of what is wrong in Lebanon,” he said.

“First, his family’s name showed up in a housing loans scandal. They were accused of using subsidised loans – designed to help low-income families buy homes – for commercial purposes. This led to a shortage in housing loans. This is exemplary of how the political class approached public affairs in the past, their narrow self-interest always coming first. And secondly, he more than most best represents the wealth gap, the inequality in Lebanon.”

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