Lebanon Forms Government Amid a Deep Economic Crisis

Lebanese Prime Minister-designate Najib Mikati announced on Friday the formation of a new cabinet of 24 ministers, breaking over one year of political deadlock in the crisis-torn country.

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"We will work seriously on serving all people regardless of their sects," Mikati said, swearing that he will stop the country's collapse and spare no efforts to get in contact with international organizations to secure the country's basic needs.

The Lebanese pound surged following the formation of the government, trading at around 15,000 Lebanese pounds to one U.S. dollar while it was trading at 18,150 Lebanese pounds to one dollar in the morning.

Lebanon has been without a government since the resignation of the Interim PM Hassan Diab on Aug. 10, 2020, following the Beirut port's explosions which killed more than 200 people and wounded thousands of citizens.

Over the past two years, Lebanon has witnessed a series of crises, including the Beirut port blasts, the COVID-19 outbreak, and a shortage in U.S. currency reserves which deprived citizens from their basic needs including fuel and medicines. The recession plunged 74 percent of the population into poverty.

“Early in the crisis, Lebanon defaulted on its massive pile of public debt, including US$31 billion of Eurobonds that remain outstanding to creditors. The currency has fallen by more than 90 percent, demolishing purchasing power in a country dependent on imports,” the Daily Start recalled.

“The banking system is paralyzed. With depositors locked out of foreign currency savings or forced to withdraw cash in the collapsing local currency, this currently equates to a de facto slump in the value of deposits of 80 percent. Food prices have jumped by 557 percent since Oct. 2019… and the economy has contracted by 30 percent since 2017,” it added.