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Lebanon PM Says New Cabinet Faces 'Catastrophe' as Protests Persist Amid Collapsing Economy

Lebanon's Prime Minister Hassan Diab arrives at the presidential palace in Baabda, Lebanon January 22, 2020. (Image: REUTERS)

Lebanon's Prime Minister Hassan Diab arrives at the presidential palace in Baabda, Lebanon January 22, 2020. (Image: REUTERS)

Lebanon PM Hassan Diab, the successor to Saad Hariri who quit as prime minister in late October, vowed to meet demands from the street but demonstrators were unconvinced.

  • AFP
  • Last Updated: January 23, 2020, 6:18 PM IST
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Lebanon faces a "catastrophe", Prime Minister Hassan Diab said Wednesday after his newly unveiled cabinet held its first meeting to tackle the twin challenges of a tenacious protest movement and a nosediving economy.

Diab, the successor to Saad Hariri who quit as prime minister in late October, vowed to meet demands from the street but demonstrators were unconvinced.

Renewed clashes broke out near parliament in downtown Beirut between protesters hurling stones and fire crackers and police firing water cannons and tear gas, an AFP correspondent said.

The Lebanese Red Cross said least 22 people were injured, seven of them hospitalised.

Diab, a 61-year-old academic, was thrown in at the deep end for his first experience on the political big stage and admitted that the situation he inherited was desperate.

"Today we are in a financial, economic and social dead end," he said in remarks read by a government official after the new cabinet's inaugural meeting in Beirut.

"We are facing a catastrophe."

Western sanctions on the Iranian-backed organisation are stacking up and economists have said the new government might struggle to secure sorely-needed aid.

Secretary of State Mike Pompeo appealed for the new government to enact serious reforms to tackle the twin challenges of a collapsing economy and angry street protests.

"Only a government that is capable of and committed to undertaking real and tangible reforms will restore investor confidence and unlock international assistance for Lebanon," he added.

French President Emmanuel Macron said he would "do everything, during this deep crisis that they are going through, to help".

Technocratic?

The powerful Hezbollah movement and its allies dominated the talks that produced the new line-up, which Hariri and some of his allies have opted to shun.

The multi-millionaire tycoon was one of the symbols of the kind of hereditary and sectarian-driven politics that demonstrators, in the streets since mid-October, want to end.

He and his government resigned less than two weeks into the non-sectarian protest movement demanding a complete overhaul of the political system and celebrating the emergence of a new national civic identity.

Protesters from across Lebanon's geographical and confessional divides had demanded a cabinet of independent technocrats as a first step to root out endemic government corruption and incompetence.

"This is a government that represents the aspirations of the demonstrators who have been mobilised nationwide for more than three months," Diab said.

Yet the horsetrading between traditional political factions during lengthy government formation talks was all too familiar to many Lebanese who met the breakthrough with distrust at best.

"Instead of the corrupt politicians, we got the corrupt politicians' friends," said Ahmad Zaid, a 21-year-old student who joined protesters in central Beirut after the announcement.

- Near bankrupt -

The new cabinet is mostly made up of new faces, many of them academics and former ministry advisers.

It comprises 20 ministers and among its six women is Zeina Akar, Lebanon's first-ever female defence minister.

To downsize the cabinet, some portfolios were merged, resulting in at times baffling combinations such as a single ministry for culture and agriculture.

Anger at what protesters see as a kleptocratic oligarchy was initially fuelled by youth unemployment that stands at more than 30 percent and the abysmal delivery of public services such as water and electricity.

The long-brewing discontent was compounded by fears of a total economic collapse in recent weeks, with a liquidity crunch pushing banks to impose crippling capital controls.

Lebanon has one of the world's highest debt-to-GDP ratios and economists have said it is hard to see how the near-bankrupt country could repay its creditors.

A looming default on Lebanon's debt, which has been steadily downgraded deeper into junk status by ratings agencies, has sent its currency plunging on the parallel exchange market.

In a country where many transactions are carried out in dollars and most goods are imported, consumers and businesses alike have been hit hard by the national currency's free-fall.

Every morning, queues of people hoping to withdraw their weekly cap of $100 or $200 form outside banks.

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