Lebanon News

Govt working to halt collapse, solve power, fuel crises: Mikati

Prime Minister Najib Mikati heads a meeting with ministers in Beirut, Sept. 27, 2021. (The Daily Star/Dalati Nohra, HO)

BEIRUT: The government is working to halt the economic collapse, ensure electricity supplies and resolve the medicine and fuel crisis, Prime Minister Najib Mikati said Monday after holding a series of meetings with a number of ministers and a private sector delegation.

Mikati’s discussions centered on ways to halt the economic collapse and the issuance of the cash subsidy cards to poor and needy families to help them after fuel subsides are entirely lifted at the end of this month, the state-run National News Agency reported.

Mikati underlined the need for cooperation among the Lebanese to put the country, reeling from an unprecedented economic meltdown, on the path to recovery.

“Cooperation among all the parties is very important to put Lebanon on the recovery track,” Mikati said. “The first step on which we are working is to stop the current collapse in the country and put an end to the problems related to ensuring electricity and resolving the medicine and fuel crisis, in tandem with moving to tackle the other problems in cooperation with the relevant international bodies,” he added in his remarks, which were carried by NNA.

Meanwhile, the UN Security Council welcomed the formation of a new government in Lebanon and vote of confidence by Parliament as “necessary first steps toward the resolution of Lebanon’s crisis.”

In a statement released Monday, the Security Council members urged Lebanon’s new government to swiftly and transparently implement the well-known, necessary and tangible reforms, as reiterated in the government’s policy program.

“Such reforms are key to respond to the dire needs and legitimate aspirations of the Lebanese population regarding the urgent security, economic, social and humanitarian challenges facing the country. They also underlined the importance of delivering those reforms in order to ensure effective international support,” the statement said.

They reaffirmed their strong support for the stability, security, territorial integrity, sovereignty and political independence of Lebanon, consistent with relevant Security Council resolutions.

The Security Council members also underlined the importance of holding “free, fair and inclusive elections in 2022 transparently and according to the planned schedule, ensuring the full, equal and meaningful participation of women as candidates and voters in the elections.”

Mikati returned to Beirut Sunday night after visiting France and Britain on his first foreign trip as Lebanon’s prime minister. The two visits came a few days after Mikati’s Cabinet of 24 specialists, formed on Sept. 10, gained a vote of confidence from Parliament, giving ministers a boost to begin tackling a series of crises facing the Lebanese, including a financial downturn that has propelled more than 70 percent of Lebanon’s 6 million population into poverty, and severe fuel and medicine shortages and chronic power cuts that have paralyzed normal life in the country.

Speaking at a joint press conference with Mikati at the entrance of the Elysee Palace Friday, French President Emmanuel Macron said reforms should include tackling power and other infrastructure problems, improving public finances, reducing corruption, and stabilizing the banking system. Macron also underlined the need for Lebanon to quickly resume talks with the International Monetary Fund.

Speaking in French with Macron by his side, Mikati asserted his determination to “implement the essential and basic reforms as soon as possible in cooperation with my government and with the support of President Michel Aoun and Parliament to restore confidence, spread a new hope and reduce the suffering of the Lebanese population.”

Media reports said Macron had promised Mikati to send to Beirut his Middle East adviser Patrick Durel and Ambassador Pierre Dukan to prepare for a new international donor conference in support of Lebanon.

Dukan, who has visited Beirut several times in the past to prod Lebanese leaders to quickly enact reforms recommended by the CEDRE conference hosted by France in 2018, is tasked with following up on the implementation of these reforms designed to salvage the country’s ailing economy.

France, which has emerged as the main power broker in Lebanon since last year’s deadly Beirut Port explosion, was instrumental in mobilizing international support for Lebanon.

France has led the international response to the Aug. 4, 2020, massive blast that pulverized Beirut Port, killed at least 214 people, wounded thousands of others and damaged large swathes of the capital. It has organized three international conferences devoted to Lebanon and delivering aid in exchange for promises of political reform and accountability. Macron traveled to Lebanon two days after the blast and visited Beirut again in September last year to launch a French reform initiative designed to lift Lebanon out of its worst economic and financial crunch since the 1975-90 Civil War.

Earlier Monday, Mikati met with Aoun to brief him on the results of his talks with Macron. Later, Aoun chaired a meeting at Baabda Palace attended by Mikati, Deputy premier Saadeh Shami, Finance Minister Youssef Khalil and Economy Minister Amin Salam devoted to discussing necessary preparations to resume negotiations with the IMF, NNA said.

“Lebanon is preparing to form the delegation that will negotiate with the IMF on the government’s reform plan and economic recovery plan,” an official source told The Daily Star.

The source said the Cabinet, which is set to meet at 4 p.m. Wednesday at Baabda Palace, might decide to set up a ministerial team to be tasked with negotiating with the IMF on a bailout package to rescue the country from an economic depression, described by the World Bank as one of the world’s worst since the 1850s, posing the gravest threat to the country’s stability since the Civil War. The team will be made up of the ministers of finance, economy, energy and social affairs, in addition to the deputy premier, a representative of the Central Bank governorate, and a number of economic and financial experts.

The speedy formation of the team will send a positive signal about the government’s resolve to move forward with the talks with the IMF, a key demand of international donors. Lebanon began talks with the IMF on a $10 billion bailout package in May 2020, but the negotiations broke down after a dispute between different interest groups representing Lebanese banks and the government over the size of losses in the Central Bank.

In addition to the IMF talks, the Cabinet is set to tackle urgent problems such as the severe fuel and medicine shortages, the electricity problem amid a warning by the state-run electricity company that the country faced the threat of a total blackout by end-September amid dwindling fuel oil reserves, as well as the repercussions of the Central Bank’s decision to lift fuel subsidies by the end of September.

“Prime Minister Mikati’s concern is to secure 14 hours of electricity supply daily within weeks. Work is ongoing on this matter for the sake of the people and the economy,” said MP Nicholas Nahas, a member of Mikati’s three-member parliamentary bloc.

The energy sector has been a huge drain on state coffers for decades. Electricite du Liban, or EDL, the state monopoly, incurs annual losses of up to $2 billion, which have cost the state more than $40 billion over the past decades. Reforming the sector has been a key demand of international donors, the World Bank and the IMF.

The Amal Movement Monday urged the government to draw up a road map to begin implementing reforms contained in its policy statement.

“The opportunity given to the government is not open-ended. It requires drafting a road map for serious reforms based on the broad lines of the policy statement on which the government won Parliament’s confidence,” said a statement issued after the weekly meeting of Amal’s politburo. “This matter requires a reactivation of the work of state institutions at all levels to meet the necessary needs that directly reflect on the life of the people and their economic, social and health conditions.”

The Amal Movement, headed by Berri, is represented by three ministers in Mikati’s Cabinet, including Finance Minister Youssef Khalil.

 

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