Hussein Dakroub – The Daily Star
Lebanon’s survival will be at stake if the new Cabinet fails, the leader of Hezbollah warned Sunday, pleading with rival factions to rally behind the government to help it halt the country’s slide toward economic collapse.
Sayyed Hasan Nasrallah also urged opponents of Prime Minister Hassan Diab’s 20-member Cabinet, formed on Jan. 21 and made up of specialists nominated by Hezbollah and its allies, to give it a chance to work and stop inciting Arab countries and the international community against it by labeling it “Hezbollah’s government.”
Nasrallah’s warning comes as Lebanon is grappling with the worst economic and financial crisis since the end of the 1975-90- Civil War and Lebanese officials are split on whether to pay or default on the $1.2 billion Eurobond that is maturing next month. An International Monetary Fund delegation is expected to visit Beirut this week for talks with government officials on options to ease the severe economic and financial crisis, including on whether to pay the $1.2 billion Eurobond that is maturing on March 9 or restructure the debt.
The Cabinet Thursday decided to form a ministerial committee to draw up a comprehensive economic, monetary and financial plan to rescue the country from the crippling crisis. It also asked for technical assistance from IMF experts and other international economists and legal experts on options to deal with the crisis, including the Eurobond issue.
Nasrallah said that supporting the government was a “national duty.”
“If this government fails, it is not known whether the country will survive for someone to ride on a white horse to form a new government,” he said in a televised speech commemorating the party’s annual anniversary of the “martyrs of the resistance.”
“The most important development worrying the Lebanese today is the economic, financial, monetary and social situation. There are growing concerns over the fate of deposits in banks, rising prices, the lack of some goods, the Lebanese pound’s exchange rate against the dollar, the increasing unemployment rate, the collapse of companies, the stagnant economic activity, and industrialists and farmers are facing difficulties in exporting their products,” Nasrallah said.
Amid a dollar liquidity crunch, Lebanese banks have imposed unprecedented capital controls on clients, raising fears about depositors’ savings in U.S. dollars. The Lebanese pound has lost over 40 percent of its value against the dollar, inflation has soared and companies are shutting down as the economic crisis has been aggravated by the popular uprising that erupted against the entrenched political class on Oct. 17.
Nasrallah added that the people were also worried that this difficult economic situation might impact the security situation and lead to “thefts, crimes and nervous breakdowns.”
“They are also worried about the state’s health, social and development services being negatively affected by this situation. There are also concerns about the public debt,” he said, referring to the soaring national debt of over $88 billion, equivalent to 150 percent of gross domestic product.
“We are in the throes of a very, very, very difficult economic, financial and monetary situation. I call for tackling the economic and financial issue to be separated from the political struggle and let this issue be addressed in a different manner … Let’s set the settlement of political scores aside,” the Hezbollah chief said.
In a clear reference to the latest exchange of accusations between the Future Movement and the Free Patriotic Movement over responsibility for bringing the country to near-collapse, Nasrallah said: “Let’s also put the exchange of accusations aside and give the current government a reasonable and logical chance to help prevent the [economic] collapse and bankruptcy and for any group, party or bloc to extend help [to the government] because this is a national duty.”
Nasrallah said that while Hezbollah backed the Cabinet, he dismissed as “lies” the theory that it was “Hezbollah’s government.” He said that opponents who described the Cabinet that way would damage Lebanon’s international ties.
“It’s everyone’s responsibility to help the government or at least to allow it to work and not to incite Arab countries and the world against it,” he said. “I tell some Lebanese who insist on incitement abroad by labeling this government Hezbollah’s government that this will harm Lebanon.”
“Hezbollah supports the government and wants it to succeed … We will not abandon the government and we will stand by its side because the matter is tied to the country’s fate,” he said.
If the government succeeds in halting the economic collapse and allaying people’s concerns, he said, it would be doing “a big favor to all the Lebanese and those living on Lebanese territories.”
Nasrallah called on the government to approach political blocs on the formation of a committee made up of pro-government and opposition figures “because the economic and monetary situation is in a dangerous state.”
“Priority is to work to rescue [the country] because the situation is threatening everyone,” he said.
Nasrallah said Hezbollah had hoped that former Prime Minister Saad Hariri would not resign under the pressure of nationwide street protests last October and that an-all embracing government would have been formed in its place.
“But this did not happen and the current government was formed. We must appreciate the courage of its prime minister and ministers for accepting to assume responsibility in this difficult and sensitive time,” he said.
The Diab government is coming under growing international pressure to enact a string of key economic reforms as a condition for Arab and foreign countries to extend desperately needed financial aid to the cash-strapped country, one of the world’s heavily indebted countries.
A senior U.S. official said his country would help Lebanon to recover money looted from the state, but further support would come after Diab’s government carried out reforms.
“We are cooperating with some international bodies, and will discuss the topic of recovering money smuggled from Lebanon,” the unidentified State Department official told the Dubai-based Saudi channel, Al Arabiya, Saturday.
“We recognize that the political situation is difficult and that there are serious economic and financial challenges facing Lebanon … They know what they need to do to bring about real economic reform, and that it will open the gates of American, European and international investment in Lebanon,” he said.
IMF Managing Director Kristalina Georgieva said Lebanon needed urgent and deep structural reforms. “We are sending a small team to Lebanon … We’ll do our best to give a diagnostics recommendation on measures to take but the taking is in the hands of Lebanon,” she said, speaking in Dubai Saturday.