Billionaire mogul appointed Lebanese prime minister as economic crisis hits

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After a year-long standoff, Lebanon has appointed a new prime minister whose rival factions hope can avert a total economic collapse and save an estimated 2 million people from the brink of poverty.

Protesters had demanded the selection of a figure withdrawn from the political elite, but the Lebanese parliament instead appointed a billionaire tycoon, Najib Miqati, who had ruled the country twice before, with little success, and has been charged by a public prosecutor in 2019 for embezzlement. – an accusation which he denies and which he described as politically motivated.

The name of Lebanon’s richest man, originally from his poorest city, Tripoli, has been taken by many Lebanese as proof that the tiny Mediterranean state is virtually ungovernable – unable to reform itself even to save itself from it. ruin, and immune to the demands of its citizens.

Lebanon’s economic and financial crisis began at the end of 2019 and has continued to worsen. Poverty has skyrocketed in recent months as the situation spirals out of control, with severe shortages of medicine, fuel and electricity. The Lebanese pound has lost about 90% of its value against the dollar, leading to hyperinflation.

Miqati’s appointment would be the third since Hassan Diab’s government resigned following the massive explosion in the port of Beirut last August. Since then, Diab’s cabinet has only acted on an interim basis, further exacerbating Lebanon’s paralysis.

The international community, led by France and the EU, had conditioned billions of dollars in aid for the implementation of widespread reforms in all aspects of government and on a leader capable of pushing through fundamental changes in governance, curb endemic corruption and enable the state to provide services.

Miqati was appointed on Monday, after Prime Minister-designate Saad Hariri lost a protracted power struggle with the country’s President Michel Aoun and resigned. He now faces an uphill battle to appoint a cabinet that would be accepted by Aoun and gain the approval of donor states who have sworn not to pour more money into Lebanon without guarantees of probity.

As Lebanon crumbles, its leaders face a growing threat of sanctions from France and the EU. European leaders do not see Miqati’s return as the requested breakthrough. However, senior officials said they would reserve judgment until Miqati appoints a ministerial composition.

“After that, the decision is whether these ministers could really be empowered to do things differently,” said an EU official.

Mohanad Hage Ali, director of communications for the Carnegie Middle East Center, said corruption allegations from the last time Miqati was prime minister had not been addressed.

“For the protest movement, Miqati embodies the misconduct of previous governments because he represents two sides of what is wrong with Lebanon,” he said.

“First, his family’s name appeared in a mortgage scandal. They were accused of using soft loans – designed to help low-income families buy homes – for business purposes. This has led to a shortage of home loans. It’s an example of how politicians have approached public affairs in the past, with their narrow self-interest always coming first. And second, he represents better than anyone the wealth gap, the inequality in Lebanon.

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