How is Lebanon functioning amid leadership vacuum?

Lebanon is a country of vacancies and caretakers, with no president for nearly eight months, a caretaker prime minister and cabinet, an acting head of General Security, and with the three-decade term of embattled central bank governor Riad Salameh expiring this month – and no permanent successor announced.

And it gets worse. The term of General Joseph Aoun, commander of the Lebanese Armed Forces, expires next January. In such a vacancy, the Chief of Staff would take on acting powers – but that position remains empty amid a dispute over the powers that the caretaker cabinet holds.

Lebanon has been entrenched in a crippling economic crisis since 2019 – one of the worst in modern history, according to the World Bank – which has plunged most of the population into poverty.

The collapse has been blamed on decades of mismanagement and corruption by Lebanese elites, including some of those in power today.

The local currency has lost around 98 per cent of its value against the dollar on the parallel market, the most used and accurate reflection of the exchange rate.

Sliding towards the abyss

“The answer could be that, while there is a semblance of normality, Lebanon seems to be continuing to function despite all these vacancies; the cold hard truth is that the abnormal is becoming the new normal,” said Karim Bitar, a professor of International Relations at Saint Joseph University in Beirut.

“It’s an old cliche, but once again Lebanon is dancing on a volcano and we are on the verge of a fully fledged state collapse. Many significant state institutions are no longer working at all, civil servants are no longer showing up.”

So, given the economic crisis and with the vacancies building up, how is Lebanon functioning – if it even is at all?

On the surface, it’s because when the terms of the heads of major institutions end, typically their deputy steps up to become the acting chief.

When the term of Abbas Ibrahim, the influential head of the General Security intelligence agency, expired this year, his deputy Elias Baissari stepped in on a temporary basis.

Caretaker Prime Minister Najib Mikati says central bank governor Mr Salameh’s term will not be extended, nor a successor announced when the bank chief's term expires this month.

That means the most senior vice governor will step in on an acting basis. That’s despite the four deputy bank chiefs threatening to resign if no successor is named.

By not appointing a successor or extending Mr Salameh’s term, Mr Mikati is also able to avoid questions about overstepping his mandate. The central bank governor is seen as close to Mr Mikati and powerful parliamentary Speaker Nabih Berri.

Mr Mikati and former president Michel Aoun failed to agree on the make up of the new Cabinet before the latter's term ended in October 2022.

This has led to an unprecedented governance vacuum. In the absence of a president – a common occurrence given the deep divisions in the 128-seat parliament tasked with electing the next head of state – the Cabinet takes on presidential powers.

But Mr Mikati and his ministers have caretaker status, meaning they are severely stripped of their powers. Some ministers close to the Free Patriotic Movement – founded by Mr Aoun – have boycotted Cabinet meetings, arguing they are unconstitutional.

Typically, the president appoints the central bank governor, but there is no president or fully empowered government – an unprecedented situation in the post-civil war era. “It’s quite complex,” says a source from the Lebanese Forces, the party with the most seats in parliament.

Mr Mikati has repeatedly urged the bitterly divided parliament to elect a new president – something it has failed to come close to 12 times – in order to begin the recovery process.

But perhaps the real question is whether Lebanon is functioning at all. On the surface, depending on where you go, it may not always be easy to see the financial devastation.

'Inevitable collapse'

It is the peak of summer in Lebanon and the restaurants, beaches, bars and motorways are packed – often by the large diaspora working outside the country, or those based in the country with a strong financial position and access to dollars, despite the collapse. Mr Bitar refers to this as a “micro-society” that lives in a bubble.

But such a scene hides the reality for the majority of the population amid the economic crisis. The public sector has virtually collapsed as salaries fail to keep up with rampant inflation, leaving widespread shortages of basic essentials, including clean water, electricity and medicines. Banks have introduced informal capital control laws, depriving depositors of their life savings.

Remittances, estimated at around $7 billion annually, are a vital lifeline.

“Despite all these signs that everything is OK, restaurants are being fully booked, there are traffic jams all over the city… this only hides a painful truth, which is that Lebanon is becoming dysfunctional, and that the political establishment is using delaying tactics, gaining time and basically trying to delay the inevitable collapse," said Mr Bitar.