Najib Mikati Named Prime Minister Designate Forensic Audit Team to Arrive in Lebanon on June 27 Energy Crisis: A New Dawn for Lebanon
Najib Mikati Named Prime Minister Designate
After consultations between Lebanon’s President Michel Aoun and several Members of Parliament, Najib Mikati was named Prime Minister Designate by the President after serving the country as Caretaker Prime Minister for the last few weeks. This will be the third time in Lebanon’s history in which he will have been called upon to form a new government as Prime Minister. In public remarks, he said, “We have wasted enough time and lost many chances of support from brotherly and friendly countries whose stance has always been clear: ‘help yourselves so we can help you.'” [Reuters]
During the past year, PM Mikati has been consistent in his efforts to push an IMF package forward, and rally support for the resolution of the maritime border issue and the Levantine energy deal. As PM Designate he must now prioritize one issue: securing support from the President Aoun, Speaker Berri, and parliament for bills that will facilitate a reform program with the IMF. This in turn will open up additional support from the international community. By accepting this assignment he must identify a coalition in parliament with whom he can implement these needed changes. If he and parliament fail to work together, history will not judge them kindly.
-ATFL President Edward M. Gabriel
Forensic Audit Team to Arrive in Lebanon on June 27
US-based auditor Alvarez and Marsal (A&M) will send a team to Lebanon on June 27 to conduct a forensic audit of the Central Bank. This audit has been delayed and jumpstarted multiple times in recent years. The financial meltdown, which began in 2019, has depleted the currency by 90% and left a $70 million dollar gap in the financial system. It is considered Lebanon’s most dire crisis since the 15-year Civil War. [Reuters]
At the core of Lebanon’s economic meltdown are the currency policies that the Central Bank promoted that involved acquiring foreign currencies from commercial banks to maintain the old exchange rate long after it had lost its relevance. A lot of finger-pointing is going on as to who is liable for the crash, resolution of the national debt, the steep decline in the value of the currency, and all the related disasters – inflation, the alleged disappearance of bank funds, and numerous charges of corruption. Hopefully this investigation, if transparent and unimpeded, can illuminate the scope of the illicit activity and point lawmakers in a clear direction on necessary reforms.
-ATFL Vice President Jean AbiNader
Energy Crisis: A New Dawn for Lebanon
Carole Nakhle notes that Lebanon’s energy and electricity mixes in large part come from imported petroleum, which fulfills over 90 percent of its needs. Addressing the current fuel crisis will involve multiple steps, she argues, which include: a comprehensive energy policy, turning away from politicians and towards energy experts for leadership, and tempering expectations about Lebanon’s oil and gas potential. Importantly, Nakhle notes, no commercial oil or gas discoveries have been made, thereby making any government strategizing around such discoveries premature. [LCPS]
The author argues persuasively that the electricity reform plan approved on March 22 will be insufficient unless Lebanon develops an energy policy/strategy that ties together the political, legal, economic, and technical frameworks required to reform the power sector. The current plan needs to incorporate all of the diverse sources of energy being developed as well as production, transmission, and distribution policies for energy from multiple sources. The Parliament can make this work effectively, starting with an empowered monitoring board.
-ATFL Vice President Jean AbiNader
Disclaimer: The views and opinions expressed are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.