Tens of thousands of Lebanese protesters kept the country on lockdown on Tuesday, rallying for a sixth consecutive day to demand new leaders despite the government’s adoption of an emergency economic rescue plan. The protesting people remain defiant despite Prime Minister Saad Hariri’s reforms, insisting the government resign.
Media reports said:
Demonstrations have grew into an unprecedented cross-sectarian street mobilization against the ruling politicians.
The movement has spread to all major cities and into Lebanon’s vast diaspora. Expats in Europe, the U.S. and Africa staged sit-ins and demonstrations in solidarity.
The cabinet was spurred into passing wide-ranging economic reforms on Monday, but the move failed to win over protesters, who now seem bent on removing the entire political elite, which they see as corrupt.
Tuesday’s protests initially seemed smaller than on previous days, but they swelled in the afternoon, with thousands gathering in central Beirut.
Among the measures were a 2020 budget meant to bring the deficit down to 0.63 percent of GDP, without new taxes, along with a privatization program and projects to support the underprivileged.
The reforms also include a 50-percent reduction in salary for former and current politicians and ministers; the abolishment of the Ministry of Information and a number of other state institutions; and the establishment of an anti-corruption panel.
Hariri assured that no new taxes would be imposed, but for many protesters it is too little and too late.
The announced reforms did not meet protesters’ demands that the government resign and that a council of non-political judges take over leadership of the country until elections can be held.
The reforms also include plan in which the country’s central bank and the banking sector, which are flush with cash, will help in reducing the country’s deficit by about $3.4bn in 2020.
Five bankers interviewed by Reuters said details of the measures had not been explained to them and they were awaiting the return of central bank governor Riad Salameh from Washington, where he has been attending IMF and World Bank meetings, to shed light. They all requested anonymity given the sensitivity of the situation.
Analysts at Bank Audi said the government’s plans would involve the central bank contributing $2.99 billion to halve Lebanon’s debt servicing costs and the imposition of an exceptional income tax for one year on Lebanese banks to raise a further 600 billion.
A second banker said foreign states should now help with moves to support Lebanon. “You need a stability plan from the international community to answer the fear of the people to be able to stabilize the situation,” he said.
The country’s main parties, including those of President Michel Aoun and the powerful Iran-backed Hizbullah, have warned of a political vacuum and supported the reform package.
Hariri seemed aware that the measures he announced would not quench the people’s thirst for change, telling protestors on Monday the plan was not simply a “trade-off” to get people off the streets.
Hariri said that he supported the demonstrators’ call for early elections.
“We have heard you. If your demand is early parliamentary elections, it is your voice only that decides. I, Saad Hariri, am with you in this demand.”
“You are the compass and … your movement frankly is what led us to this decision today,” added Hariri,
Shortly after Hariri spoke protesters started shouting “revolution, revolution,” as major roads leading to the capital, Beirut, remained blocked by burning tyres while schools, businesses and banks were closed.
Hariri met top ambassadors in Beirut Tuesday, hoping to restore confidence that Lebanon can handle its ballooning debt and unlock a huge aid package approved in Paris last year.
“We believe, after the announcement of the decisions of the cabinet yesterday, that we’re going to get very positive reactions” from the international community,” senior Hariri adviser Nadim Munla told reporters.
Progressive Socialist Party leader Walid Jumblat, a powerful politician who has representatives in the government, criticized the reforms as “weak drugs” that aim to buy time.
Demonstrators had again gathered in the capital Beirut on Tuesday, chanting “Peacefully! Peacefully! This is a peaceful revolution!” as they called for systemic change and an end to the country’s sectarian government.
Banks remain closed
Banks said they would remain closed on Wednesday, having shuttered last week as the demonstrations gained momentum.
Association of Banks in Lebanon (ABL) said in a statement on Tuesday: The banks are “waiting for the general situation to stabilize in the country”.
A central bank source said the shuttering was a practical response to street protests. Roadblocks have made it difficult for bank employees to get to work, the source said.
Let the banks pay
A couple of dozen demonstrators shouted slogans in front of the central bank on Tuesday, despite the premier’s announcement.
“Down with the rule of the central bank. We won’t pay the taxes. Let the banks pay them,” they chanted.
In Beirut, Mounir Malaeb, an elderly man from the southern city of Tyre who came to the capital to join the rallies, said the protest movement was “the only chance the people have.”
“If we give the government another chance, we would be crazy,” he said. “We have been giving them chances since the 1990s.”
Many protesters said they do not trust any plan by the current government with one demonstrator describing the cabinet’s promises as “a painkilling injection.”
“I have zero-percent trust in this government,” said Reem Mouwaad, a special needs teacher.
Army’s road reopening effort blocked
On Tuesday morning, the Lebanese Army was trying to reopen a number of major roads that have been blocked by demonstrators for days, the state-run National News Agency reported.
In Beirut, volunteers cleaned up streets after euphoric crowds partied deep into the night on Monday, dancing to impromptu concerts and DJ sets.
Given the size of the gatherings, the six-day-old mobilization has been remarkably incident-free, with armies of volunteers providing water to protesters and organizing first aid tents.
Protesters sang the national anthem into the night and continued to demonstrate in other parts of the country, including the northern city of Tripoli and Sidon in the south.
The protests – Lebanon’s biggest in years – broke out on Thursday over the cash-strapped government’s plans to impose new taxes, but have since widened into calls for the country’s entire political leaders to step down.
France calls for reform
In a statement on Tuesday, the French government urged Beirut to carry out the reforms, which are key to unlocking some $11 billion in financing pledged by France and other countries and lending institutions last year.
“France stands alongside Lebanon. It is in this perspective that we are committed, with our international partners, to the rapid implementation of the decisions taken at the CEDRE conference in Paris in April 2018.”
Measures are not enough
Heiko Wimmen, analyst with the International Crisis Group, said it appeared Monday’s measures were not enough.
“These mostly technical solutions may put the country on a sounder fiscal footing, but they appear inadequate to the challenge of the protests, which now demand broader, systemic change,” he said.
Economy sliding to abyss
Lebanon’s economy has been sliding closer to the abyss in recent months, with public debt soaring past 150 percent of GDP and ratings agencies grading Lebanese sovereign bonds as “junk.”
Fears of a default have compounded the worries of Lebanese citizens exasperated by the poor quality of public services.
Residents suffer daily electricity shortages and unclean water.
Lebanon’s banking sector has been a major lender to the government with deposits sent from its diaspora a critical source of financing for the state and the import-dependent economy.
But capital inflows have been slowing for a number of years. This strain has surfaced in the real economy of late where dollars have been harder to obtain at the official exchange rate and the Lebanese pound has weakened on a parallel market.
Banks voiced criticism earlier this year when the government raised the tax on interest as part of efforts to reduce the deficit in the 2019 deficit.
Garbis Iradian, chief MENA economist, Institute of International Finance, said “most of the adjustment burden is falling on the banking system in Lebanon”.
“The banks may cope but their profitability, if any, will be adversely impacted. I think the banks are overburdened with taxes and they’re the ones who are contributing the most to the increase in tax revenues.
Many of the country’s politicians today were formerly warlords fighting along sectarian lines in the conflict.