Hassan Diab at the government palace in Beirut, Lebanon, on August 10 2020. Picture: REUTERS/MOHAMED AZAKIR
Hassan Diab at the government palace in Beirut, Lebanon, on August 10 2020. Picture: REUTERS/MOHAMED AZAKIR

Dubai — Lebanon’s prime minister confirmed the resignation of his government as an outraged public demanded accountability for last week’s explosion at Beirut’s port, the biggest peacetime catastrophe in the nation’s history.

“The scope of this disaster is bigger than can be described,” Prime Minister Hassan Diab said in a speech to a traumatised nation on Monday, after just seven months in office. He blamed a corrupt political elite for sabotaging his administration.

“Each minister gave it their all,” he said. “But some people only care about scoring political points. Their corruption has led to this disaster.”

Diab had failed to deliver on the demands of protesters who have taken to the streets since October seeking change, nor had he advanced talks with donor countries and the IMF for billions of dollars in aid that a country drowning in debt so badly needs.

Anger has surged in a nation already grimly familiar with decades of governmental malfeasance as it coped with the aftermath of a blast that killed more than 150 people, injured thousands and displaced hundreds of thousands more. It was caused by 2,750 tonnes of explosive materials left for six years at the country’s main port, in spite of repeated safety warnings.

Lebanon’s own leaders, fearing public anger, have hardly dared to set foot in the devastated areas, and protests erupted late last week demanding change and the resignation of Diab’s administration. Several ministers had already quit in the aftermath of the disaster, including the finance and justice ministers earlier on Monday.

“We need to move forward with the reforms, structural reforms, not just normal reforms,” said Yassine Jaber, member of the Lebanese parliament. “There has been resistance in the political scene for implementing these reforms. I think from here onwards, if this resistance persists, I think the country cannot delay doing these reforms any more and a total collapse is on the cards,” he said on a Bloomberg TV interview on Tuesday.

In line with procedure, Diab went to the presidential palace where President Michel Aoun accepted his resignation and asked him to continue in a caretaker capacity until a new government is formed. He can take charge of procedural tasks but is unauthorised to make important decisions.

It’s not clear how long it will take to form a new government in a nation where political divisions mean talks can drag out for months, or whether a caretaker government could conclude any deal with the IMF for a bailout or secure international aid.

Even before the explosion, the government was barely functioning, unable to regularly collect trash or keep electricity flowing, let alone haul the country out of its deepest political and financial crisis since the 15-year civil war ended in 1990.

Politics remain riven along sectarian lines, influenced by the Iran-backed Hezbollah that’s classified by the US and Gulf Arab states as a terrorist group. Decades of mismanagement, nepotism and cronyism, meanwhile, had left state coffers pillaged and the country gasping under mountains of debt.

The financial meltdown that has engulfed the country since late last year left many Lebanese hobbling hopelessly along as their leaders failed to undertake reforms required to unlock billions of dollars in donor pledges and a $10bn IMF bailout.

That backdrop and last week’s blast could mean the $52bn economy shrinks by a quarter this year, according to the Institute of International Finance, a Washington-based trade group.

Lebanon’s appeal for international relief after the explosion yielded pledges of emergency assistance nearing $300m at a virtual donors conference. But that is a pittance compared to estimated damages ranging as high as $15bn for the devastation to its capital city.

In a strongly worded statement, IMF director Kristalina Georgieva said months of talks with Lebanon had “yet to yield results” as politicians and bankers remained divided over what needed to be done. She set out four conditions for talks to move forward: restoring the financial solvency of the state, cutting losses at state-owned companies, passing a law to regulate capital outflows and setting up a social safety net.

“Commitment to these reforms will unlock billions of dollars for the benefit of the Lebanese people,” she said. “This is the moment for the country’s policymakers to act decisively. We stand ready to help.”

Jean-Yves Le Drian, the French foreign affairs minister, said that without reforms, “the country is heading towards an economic, political and social collapse”.

Elisa Parisi-Capone, a vice-president at Moody’s Investors Service, said in a statement that “over time, Moody’s expects that in the absence of steps towards plausible economic and fiscal policy reform, sustained official external funding support to accompany a government debt restructuring will not be forthcoming”.

Bloomberg

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