New government in crisis-hit Lebanon ends 3-month power vacuum

A new Cabinet was announced in crisis-hit Lebanon late Tuesday, breaking a months-long impasse amid mass protests against the country's ruling elite and a crippling economic and financial crisis.

Hassan Diab, a 60-year-old former professor at the American University of Beirut, announced a Cabinet of 20 members — mostly specialists supported by the Shia group Hezbollah and allied political parties.

The move, which comes three months after former Prime Minister Saad Hariri resigned, is unlikely to satisfy protesters who have been calling for sweeping reforms and a government made up of independent technocrats that can deal with the country's economic and financial crisis, the worst since the 1975-90 civil war.

Even before the Cabinet was announced, thousands of people poured into the streets, closing major roads in the capital of Beirut and other parts of the country in protest. The protesters complained that political groups still were involved in the naming of the new ministers, even if they are specialists and academics in a speech addressing the country following the announcement.

Diab saluted the protesters in the street and vowed to “work to fulfil your demands.” But he added that his Cabinet is the first government in the history of Lebanon to be made up entirely of technocrats and insisted the 20 ministers are specialists who have no political loyalties and are not partisan.

He appealed to citizens to help the government implement a “rescue program” and said this Cabinet has the “capability and qualifications, will and commitment” to carry it through.

"It’s time to get to work,” Diab said.

New government

Among the ministers named were six women, including the minister of defence and deputy prime minister. The number is a record for Lebanon, with women now holding more than quarter of the Cabinet posts, including those of defence, justice, labour, youth and sports and the displaced.

“The independence of justice will be among our top priorities and I will put all my efforts to move in this direction,” Justice Minister Marie-Claude Najm told local LBC TV.

Lebanon has been without a government since Hariri resigned October 29, two weeks into the unprecedented nationwide protest movement.

For three months, the leaderless protests have been calling for a government made up of specialists that can work on dealing with the economic crisis. The protests have recently turned violent, with around 500 people injured in confrontations between protesters and security forces over the weekend.

Although the government announced Tuesday is technically made up of specialists, the ministers were named by political parties in a process involving horse trading and bickering with little regard for the demands of protesters for a transparent process and neutral, independent candidates.

Diab dismissed accusations that his was a government made up of one political camp consisting of Hezbollah and its allies, insisting it was the government of all of Lebanon. He also said it was natural to consult with political parties on the names of ministers, because in the end they are the ones that will decide the vote of confidence in Parliament needed for the Cabinet.

Diab said his first visit as prime minister will be to the Arab region, particularly to the Gulf Arab countries — a nod to Saudi Arabia, which was the main backer of former Prime Minister Hariri. Backing from oil-rich Gulf countries is badly needed in Lebanon that has one of the highest debt ratios in the world.

Diab said the government would get to work immediately and hold its first meeting Wednesday.

Panic and anger have gripped the public as the Lebanese pound, pegged to the dollar for more than two decades, plummeted in value. It fell more than 60% in recent weeks on the black market. The economy has seen no growth and flows of foreign currency dried up in the already heavily indebted country that relies on imports for most basic goods.

Shortly before the Cabinet was announced Tuesday night, the Syndicate of Money Changers in Lebanon issued a statement saying it had agreed that the exchange rate will be no more than 2,000 Lebanese pounds for a dollar, after it reached 2,500 pounds to the dollar last week. The official price still stands at 1,507 to the dollar.

Foreign aid needed

Meanwhile, Lebanon's new government needs foreign support to help it get out of an unprecedented economic and financial crisis, the finance minister said on Wednesday.

Hours after he was named, Finance Minister Ghazi Wazni also said the government must decide on its approach to a $1.2 billion Eurobond maturing in March.

"The government must take a clear position on this because the previous government did not. It tossed over this ball of fire," Wazni told local broadcaster al Jadeed.

Dollar shortages have led the pegged Lebanese pound to slump. People have lost jobs as inflation has soared. Tight banking controls have depositors worried for their savings and protesters turning their ire on the banks.

"We now have multiple crises that are very big and exceed by far those of the past," Wazni said. "We are in a state of collapse and if we continue this way, we will be in a phase of bankruptcy ... Today, people are at the doors of the banks begging for money."

Wazni, an economist who had served as an adviser to parliament's finance and budget committee, said the Cabinet will have to come up with "a comprehensive rescue plan" to restore confidence.