An anti-government protester waves the national flag as they block the street with burning dumpsters in front of the Lebanese central bank in the capital Beirut on March 16, 2021 to protest the worsening economic situation.
JOSEPH EID | AFP | Getty Images
Lebanon’s current mismanagement has put him on the “train to hell” which is “about to reach the last stop,” Henri Chaoul, a former advisor to the country’s Treasury Department, told CNBC.
Chaoul, who advised the government on its talks with the International Monetary Fund, resigned last June after Lebanon failed to implement the reforms necessary to qualify for IMF support.
“This is not the government that will be good for Lebanon’s future,” said Chaoul.
“It is clear that the old business model, the old model of government in Lebanon, has completely failed on many levels,” added Chaoul. “We have to be able to rebuild.”
And Beirut is a city that absolutely needs to be rebuilt. She is still affected by a port explosion that killed more than 200 people and injured more than 6,000 last August. The investigation into the explosion remains inconclusive nine months later.
Lebanon is facing the worst crisis since its bloody civil war of 1975-1990. Its currency has lost 90% of its value in the informal market in the last 18 months and food inflation has hit 400%.
The country was also hard hit by the coronavirus pandemic, with over 533,000 cases and over 7,500 deaths. So far, only 7% of the population have received the vaccine.
Subsidies for essential goods such as medicines, food and fuel are gradually being withdrawn to restore the country’s dwindling foreign exchange reserves.
The Provisional Government of Lebanese caretaker Hasan Diab hopes to introduce a debit card program that will help citizens make ends meet.
A source close to the cabinet told CNBC on Tuesday, “The prime minister’s position is that the card program must be implemented before subsidies are removed.”
The source added that “the mechanism for setting up a card program is complex to design and implement and funding for the card program must come from the Banque du Liban”.
Without proper government, Lebanon cannot move forward and make the reforms it needs to unlock the much-needed aid.
The small Mediterranean country of nearly 7 million people is the third prime minister-designate in a year after Diab resigned after the explosion in Beirut. His successor Mustapha Adib resigned a month later. Diab’s caretaker government is likely to remain in place until three-time Prime Minister Saad Hariri can form a new legislature. The talks about its composition have not yet been concluded. Hariri declined to comment on this article when contacted by CNBC.
For many across the country, there is no hope of change.
“We have to see a silver lining in this crisis and sign a new social contract so that young people in Lebanon decide to stay in Lebanon and build their future,” Chaoul told CNBC. “There is no hope in Lebanon today.”
During a visit to Beirut last week, France’s Foreign Minister Jean-Yves Le Drian threatened to sanction politicians responsible for the standstill and warned of “collective suicide” if the country fails to form a government.
Paris has taken measures to restrict the entry of Lebanese officials into France, which is hindering the country’s political progress.
Riad Salameh, the governor of the country’s central bank, is also facing corruption allegations over foreign investments in France and is being investigated by Swiss prosecutors for alleged embezzlement and money laundering in connection with the Banque du Liban.
Salameh claims his fortune was acquired before he took over as governor of the central bank in 1993, and his lawyer Pierre-Olivier Sur told CNBC that his client had become a scapegoat.