Saad Hariri has been designated to form what would be his fourth government. (AFP)
As the people of Lebanon commemorated the Oct. 17 uprising with street actions and sad nostalgia, the ruling class was busy finding the right formula to bring back one of its core players to the Grand Serail.
Saad Hariri, whose government was overthrown by the uprising one year earlier after failing to convince the public of its intention to enact change, is back for another attempt.
This time, the political establishment is hoping that the weak protest momentum will keep Hariri safe from another forced resignation, and that the man’s international connections can secure foreign support to a collapsing financial system.
The establishment knows well that a Hariri-led government would never attempt any drastic policies to bring back the funds that the rich and powerful have smuggled outside the country in the last two years. Nor will he confiscate corrupt politicians’ foreign assets to bring fresh dollars into the economy.
Hariri’s primary task, and the reason why his return was supported by most of his political foes, is to lead a government that can convince international actors, including foreign governments and international financial institutions, to lend Lebanon money.
The most important of those loans — not only in size but also because it is a prerequisite for the other loans — would come from the International Monetary Fund, with whom the previous government failed to reach a deal.
Negotiations between the government of Hassan Diab and the IMF started in mid-May but were soon to collapse, mainly due to sabotage by the banks’ lobby and their political allies.
Parliament’s Finance and Budget Committee questioned the governments’ estimations of the losses to the financial system, despite the numbers being accepted by the IMF. This obstruction prompted two members of the Lebanese delegation in the negotiation to resign, namely government advisor Henri Chaoul and then the director-general of finance at the Ministry of Finance, Alain Bifani.
Will Hariri succeed in reaching such a deal this time around? There is no evidence to believe he would. Two main priorities for the IMF are that Lebanon possesses a solid plan for financial recovery, and that the bailout money is not wasted on more unsound policies by the central bank and government.
Hariri’s position as part of the financial oligarchy makes it very unlikely that he adopts a position different than that held by the banks. In other words, his plan will likely be similar to the banks’: kicking the can down the road by rescheduling the debt owed to banks in full, privatizing state assets to cover part of the cost, and avoiding any drastic restructuring of the financial sector.
The IMF has already shown no interest in the banks’ plan, which was ridiculed both by activists and experts for its wrong estimations and its bias in favor of the banks at the expense of everyone else. Why would the fund accept a proposal along these lines now?
This is not to mention that any plan for recovery would require laws that guarantee a degree of equality and accountability. This includes a capital controls law, which establishment politicians have avoided for the last year to maintain a way out for their money. It also includes a law that guarantees the independence of the judiciary and an investigation into any previous or current acts of fraud in the fiscal and financial policymaking processes, or in the regulation of the market.
On this note, Hariri is not likely to support the completion of a forensic audit at Banque du Liban, which already collapsed last week after BDL’s leadership failed to offer the required documents to the audit company Alvarez & Marsal under the pretext that doing so would be illegal.
In all likelihood, Hariri will protect BDL Gov. Riad Salameh from prosecution or accountability for his role in the crisis, especially given his recent statement that he wanted Salameh “by his side” — certainly not a push for a change in leadership at the central bank.
Without a solid plan or openness to accountability, Hariri will fail to receive foreign financial support, unless foreign governments find a reason to invest in Lebanon’s ruling class, which does not seem to be likely in the current international climate.
Even if he miraculously secured an IMF program, the money would be paid in installments, based on the satisfaction of reform conditions, some of which the corrupt establishment will resist. And even if these conditions are met and Lebanon eventually receives the full amount without delays, it is not expected to exceed $6 billion given Lebanon’s small share at the IMF.
Such an amount should barely suffice for one year, unless, in order to preserve BDL's meager reserves, the government opts for problematic measures such as lifting most subsidies on basic necessities and switching to a floating exchange rate regime. These measures would quickly accelerate the current social crisis, which might have serious political implications for Hariri.
In other words, Hariri will either succeed in postponing the crisis for the elite, or will fail and oversee a complete collapse. In both cases, his government’s agenda will have to be resisted, especially since its likely policies will cause more suffering, and will require serious repression to be enacted.
Faced with this reality, we will need to build a popular coalition and a political alternative that is ready to lead the resistance.
The desperation that we feel today is part of the counterrevolution, which started few days after Oct. 17, 2019, and has now culminated in Hariri’s return. But despite this sentiment, now is the time to get organized.
No people has ever succeeded in resisting injustice and oppression without mobilizing the power of the collective. Whatever sacrifices we make, they won’t be nearly as painful as the misery awaiting us if we do nothing. Put on your masks and boots, comrades. We have little to lose and our future to win.
