News Analysis: Lebanon to face various challenges in 2019

Source: Xinhua| 2019-01-07 23:54:10|Editor: Mu Xuequan
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by Dana Halawi

BEIRUT, Jan. 7 (Xinhua) -- Lebanon will face challenges on different levels in 2019, in which forming a cabinet is one of the most pressing one, according to analysts.

Lebanon has been struggling to form a government since Saad Hariri was designated prime minister in May 2018 mainly due to differences among parties over their representations in the new government.

Rafik Nasrallah, a political analyst, told Xinhua that if Lebanon succeeds in finding a solution to government formation, it will still have to deal with other major challenges on the economic, financial and security level.

On the economic front, the country is facing a slowdown in production caused by a drop of consumers' confidence and the flow of investments which does not encourage or give any incentives for businesses to produce or to invest.

According to Mohamed Choucair, head of Lebanese Chamber of Commerce Industry and Agriculture, some 2,200 companies closed down in 2018 because of economic slowdown, leading to an increase in unemployment among the Lebanese, which is another major challenge facing Lebanon.

Lebanon also faces financial challenges as public finances are suffering and the government may not have enough money to pay the salaries of public sector employees despite the announcements by the central bank governor about the existence of high liquidity to fund the state, Nasrallah added.

The increasing reliance on bank deposits to fund the state and the increasingly high exposure of banks to sovereign debt are making Lebanon and its banks more susceptible to political shocks.

Nasrallah's comments were reiterated by Nassib Ghobril, economist and head of the economic research department at Byblos Bank, who emphasized the need for the Lebanese government to curb its expenditures and increase its revenues in a bid to reduce its deficit and meet its dues.

This is a very big challenge that needs the adoption of various steps, said Ghobril.

"One way of reducing government's expenditures is stopping recruitment in the public sector, another is doing performance appraisal and firing ineligible employees," Ghobril told Xinhua.

Ghobril said that the best way to improve revenues is fighting tax evasion and improving fees collection including electricity bills and mechanic fees, in addition to fighting smuggling across the borders.

Another challenge facing Lebanon is preserving security on its borders with Israel and preventing the occurrence of a war in the country.

A political analyst who spoke to Xinhua on condition of anonymity said that the eruption of a war between Lebanon and Israel is very possible.

"Iran may want to wage a war against Israel by using Hezbollah, its proxy in Lebanon, if it gets squeezed financially by the U.S. sanctions," the analyst said, adding that "Iran will use its rockets to put pressure on Israel."

Meanwhile, Nasrallah believes that there are signs that show Israel's intention to wage a war against Lebanon.

"Israel's latest allegations about the existence of tunnels dug by Hezbollah from south Lebanon to northern Israel constitute a direct threat for a possible war against Lebanon," said Nasrallah.

Israel announced last month that the Israeli military had detected tunnels crossing from Lebanon into northern Israel and the country has started an operation to destroy them.

Nasrallah said Israel believes that the winners in Syria today are Hezbollah and Iran, especially after the withdrawal of the U.S. troops from Syria.

"This will prompt Israel to wage a preventive war against Hezbollah in Lebanon to weaken the Shiite party's power," he added.