Lebanon: Presidential and Ministerial Vacuum to Deepen Financial Crisis

Balsam Gharib

08 November 2022

Lebanon has entered yet another political impasse following the end of President Aoun’s term on October 31st of this year and parliament’s inability to form a new cabinet. Currently, the country is enduring a dual governmental vacuum with no president to appoint a new Prime Minister and a caretaker cabinet that has limited functional capacities. President Aoun’s last move whilst still in office was to send a letter to Nabih Berri, Speaker of the Parliament, demanding the removal of Prime Minister-designate Najib Mikati and the formation of a fully functional cabinet in order to avoid what he has referred to as a possible “constitutional chaos”. According to law, when a presidential vacuum takes place, the cabinet is entitled to assume the duties of the President, provided that the decisions it takes gain a 2/3 majority. However, in this case, the caretaker ministry is not constitutionally allowed to do this since its mandate ended in May.

Why is it so complex to elect a new President and Prime Minister in Lebanon?

The President of Lebanon is elected via a secret ballot by members of parliament, who at the moment are more politically fragmented than ever before. The results of the recent parliamentary elections indicate that the represented political parties need to form large alliances and make compromises so that a quorum may be attained. At the time of writing, the parliament has convened four times in the past month with no hopes of securing the needed quorum amid a political deadlock over the next successor. It is worth noting that in the last 14 years, Lebanon has only had two presidents: Michel Suleiman, who took office following a deal brokered by Qatar in 2008, and Michel Aoun, who ended a two-year presidential vacuum in 2016, following a grand bargain with Shiite groups and major Christian rivals.

The Lebanese political system of confessional power sharing is configured in a way that is intended to ensure the impartial and proportional representation of different confessional groups. The downside, however, is that this arrangement often appears as a deeply flawed, patronage-based system which pits sects against each other in pursuit of power. Consensus can be extremely difficult to reach, even with regard to very basic matters such as the broad universal values that could help secure the livelihoods of people locally. This difficulty of consensus and competition over political power makes elections in Lebanon anything but straightforward, and currently this same political struggle is mirrored in cabinet formation, with political parties seeking a hold of prominent ministries and continuous negotiations over the confessional divisions of seats.

What does the current vacuum mean with regards to the enduring financial crisis?

For the past three years, Lebanon has suffered from a deepening financial crisis which resulted in the devaluation of the Lebanese Lira by 90% and the economy’s contraction by 58.1% between 2019 and 2021. Inflation rates have also soared, decimating the middle class and

further deteriorating the livelihoods of the most vulnerable. While the government has previously referred to donor countries for assistance, the latter have lost trust in light of continuous faltering over fiscal and political reforms and inability to pay pre-existing debts. The EU and international donors have shifted their policy response to helping civil society initiatives and supporting bottom-up initiatives to ensure that the aid is received by the people, especially given the continuous failure of the Lebanese government to spend resources efficiently.

In the current crisis, Lebanon has referred to the International Monetary Fund (IMF) as a lender of last resort, which in turn has imposed several preconditions to unlock a US $3 billion relief package. Despite the urgency to implement the reforms set forth by the IMF, the country appears to have made little progress in showing a serious political will for reform. The parliament recently passed an amended banking secrecy law and an extremely belated budget plan for this year, both falling short on IMF recommendations. To further exacerbate the situation, a governmental and presidential vacuum will potentially obstruct the chances of closing the IMF deal.

The current Deputy Prime Minister, Saade Chami, believes that the parliament should still work on the needed reforms and submit progress reports to the IMF because that is a prerequisite to negotiations on the deal. Notwithstanding, with a caretaker cabinet of ministers that does not have a constitutional legitimacy to move forward with the deal, Lebanon risks losing badly needed aid.

A gloomy future lies ahead. Kicking the can of reforms down the road shall no longer be acceptable as change is needed to prevent Lebanon’s further collapse. Yet, the political vacuum at the time is an indication that Lebanon might be staying on the course towards an utter breakdown. The ruling political elite seem to be far from ready to make compromises that could loosen their hold on power. Henceforth, how change will come is not clear. It may be that external actors come to the rescue as per the usual or it may come from a mass revulsion at the failing state, but what remains certain is Lebanon’s need for emergency assistance to protect the well-being of its people.

Balsam Gharib is a research assistant at the RELIEF Centre in Beirut with a specialisation in policy development. She holds a BA in Political Science/International Affairs along with a minor in Multimedia Journalism from the Lebanese American University (LAU). Her current research endeavours include studying the relationship between livelihood strategies, experiences of governance, and social and political identity in Lebanon.

Photo by Christelle Hayek on Unsplash