October 29, 2019 - Lebanese Prime Minister Saad al-Hariri said he would submit his resignation on Tuesday, declaring he had hit a “dead end” in trying to resolve a crisis unleashed by huge anti-corruption protests.
Lebanon has been paralyzed by an unprecedented wave of protests against the political class that has collectively led the Mideast nation into its worst economic crisis since the 1975-90 civil war.
“For 13 days the Lebanese people have waited for a decision for a political solution that stops the deterioration (of the economy). And I have tried, during this period, to find a way out, through which to listen to the voice of the people,” Hariri said in a televised address to the nation, Reuters reported.
“It is time for us to have a big shock to face the crisis. I am going to the (presidential) palace to present the resignation of the government. To all partners in political life, our responsibility today is how we protect Lebanon and revive its economy.”
The turmoil has worsened Lebanon’s acute economic crisis, with financial strains leading to a scarcity of hard currency and a weakening of the pegged Lebanese pound. Lebanese government bonds tumbled on the turmoil.
Nationwide protests since Oct. 17 have paralyzed Lebanon at a time of worsening financial crisis – banks were closed for a 10th day on Tuesday along with schools and businesses.
According to the constitution, Hariri’s cabinet would stay on in a caretaker capacity until a new government is formed.
Hariri last week sought to defuse popular discontent through a batch of reform measures agreed with other groups in his coalition government, including Hezbollah, to – among other things – tackle corruption and long-delayed economic reforms.
But with no immediate steps toward enacting these steps, they did not placate the demonstrators, whose demands include the resignation of his coalition government.
A senior official from outside Hariri’s Future Party had said on Tuesday the premier would “most probably” announce a government resignation on Tuesday. The report weighed on Lebanese dollar bonds.
Central Bank Governor Riad Salameh called on Monday for a solution to the crisis in just days to restore confidence and avoid a future economic meltdown.
A black market for US dollars has emerged in the last month or so. Three foreign currency dealers said a dollar cost 1,800 pounds on Tuesday, weakening from levels of 1,700 and 1,740 cited on Monday.
The official pegged rate is 1,507.5 pounds to the dollar. Salameh said on Monday the central bank would maintain the pegged rate when banks reopen.
“Even if the protesters leave the streets the real problem facing them is what they are going to do with the devaluation of the pound,” said Toufic Gaspard, an economist who has worked as an adviser to the IMF and to the Lebanese finance minister.
“A very large majority of the Lebanese income is in the Lebanese pound, their savings are in the Lebanese pound and their pension is in Lebanese, and it is certain it has already started to devalue,” he said.