Lebanon's PM-designate urges swift reforms to unlock IMF deal

BEIRUT • Lebanon's prime minister-designate Mustapha Adib called yesterday for the formation of a new government in record time and urged immediate reforms as a step towards securing an agreement with the International Monetary Fund (IMF).

He spoke after being designated premier and hours before the arrival of French President Emmanuel Macron, whose pressure on Lebanon's fractious leaders was crucial to forging an agreement on Mr Adib, an academic and Beirut's ambassador to Berlin.

"The opportunity for our country is small and the mission I have accepted is based on all the political forces acknowledging that," Mr Adib said after being designated by President Michel Aoun.

Donor states want Lebanon to carry out long-delayed reforms to stamp out state corruption and waste in order to release financial support. The previous government launched talks with the IMF in May, but these stalled amid divisions on the Lebanese side over the scale of losses in the financial system.

Mr Adib said a new government must be formed in record time and reforms must be implemented immediately as "an entry point to an agreement with the IMF".

He is tasked with guiding the country through one of the deepest economic crises in its recent history and rebuilding a capital city shattered by a blast last month.

He replaces Mr Hassan Diab, also an academic, whose short-lived government quit in the aftermath of the massive blast on Aug 4 that levelled the port of Beirut, damaged tens of thousands of homes and killed more than 180 people.

Mr Diab was named by the president's party and its allies in the Hizbollah-led alliance, but failed to win the support of fellow Sunni Muslim leaders or enact the economic reforms required to unlock billions of dollars in international aid and secure IMF assistance.

Mr Adib has secured broader political backing, which should give him greater chances of success.

He served as an adviser to then Prime Minister Najib Mikati from 2000 and had been Lebanon's ambassador to Germany since 2013. He has a doctorate in law and political science and taught at the Lebanese University.

As word of his nomination leaked out on Sunday, it was met with dismay by many Lebanese at the forefront of protests that erupted last October seeking to overthrow an entire ruling class blamed for decades of corruption and mismanagement that bled state coffers dry.

Mr Mustapha Adib is tasked with guiding the country through one of the deepest economic crises in its recent history and rebuilding a capital city shattered by a blast last month.

"This is yet another manoeuvre by the failed regime to refloat itself," Mr Samy Gemayel, a parliamentarian who resigned last month, said on Twitter.

"The mechanism is clear. One decides, a part executes and the other part covers up. This is making a fool of people and prevents change," he said.

Mr Diab took office in January, promptly defaulted on US$30 billion (S$41 billion) in international debt and turned to the IMF for help in securing some US$10 billion to support wide-ranging reforms.

Shackled by years of patronage and sectarianism, and facing significant domestic opposition, Mr Diab's team failed to clinch the IMF deal and was unable to enact reforms in the electricity sector, for instance, or address corruption concerns as required by the international community.

The blast at the port exacerbated the crisis and is estimated by the World Bank to have caused up to US$4.6 billion in physical damage.

Mr Adib will now face the tough task of resuming talks with the IMF, enacting reforms that have eluded successive Cabinets and securing international aid to rebuild the port and neighbourhoods devastated by the blast.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on September 01, 2020, with the headline 'Lebanon's PM-designate urges swift reforms to unlock IMF deal'. Print Edition | Subscribe