What happened?
On 10 September, Lebanon’s presidency announced the formation of a new government under the leadership of Najib Mikati, a former Prime Minister who has previously held the position twice. PM Mikati and President Michael Aoun signed a government decree regarding the formation, in the presence of Speaker Nabih Berri. The announcement ended a 13-month stalemate and a complex political crisis. 
Addressing the press, Mikati stated that “the situation is very difficult. But it is not impossible if we unite as Lebanese. We have to put our hands together…work together, united with hope and determination.” Welcoming the announcement, UN Secretary-General Antonio Guterres urged the new government to “implement a tangible reform agenda” in accordance with the aspirations of the people. France, an important stakeholder in Lebanon, welcomed the new government, and President Emmanuel Macron said that it is “vita that Lebanon’s politicians stuck to engagements necessary to undertake key reforms.” 

What is the background?
First, the political crisis. The massive blast at the Beirut port opened the floodgates of an impending political crisis in Lebanon. On 4 August 2020, Beirut witnessed a major blast at the port, killing more than 200 people and injuring thousands. The incident triggered massive protests on the streets demanding action and justice. Owning responsibility, PM Hassan Diab resigned. With his resignation, the politicians failed to arrive at a consensus and put forth a stable political solution. Former PM Saad Hariri too, failed to form the government, stating differences with President Aoun. Najib Mikati’s appointment as the PM-designate came in the backdrop of Hariri’s resignation. The new government brings an end to the 13-month deadlock. 

Second, the international pressure. France, the former colonizer, took a special interest in the political crisis of Lebanon and exerted immense pressure on the political elite to form a government. The US too joined the exercise. The overwhelming international and regional pressure to find a solution to the crisis is said to be one of the key reasons for the recent development. It must be noted that the presence of legitimate authority is extremely crucial for negotiating with the IMF and preventing Lebanon from a free fall.

Third, the crippling economic crisis. Lebanon is reeling under a severe economic crisis. Chaotic economic policies, extensive deficit expenditure, and mismanaged monetary policies have proved disastrous. The Lebanon Economic Monitor released by the World Bank in May 2021, concluded that the country’s economic situation may be one of the worst crises in over 150 years.

Fourth, social fallouts of the crisis. With the virtual absence of a functioning government for more than a year, the Lebanese society is suffering from the health system breakdown and pandemic, long hours of blackout, fuel shortages, unaffordable inflation and consequential poverty. According to the UN, three-quarters of the population lives in poverty. 

What does it mean?
First, a fresh start. Barring the two Christian parties, Mikati has the support of almost all the political outfits including Sunni, Shia and Druze parties. The newly formed cabinet is a fresh beginning, with some new faces, technocrats and specialists, nevertheless endorsed by various political parties. Though there is scepticism about what the cabinet is capable of doing, the fact that there is a full-working government is hope in the right direction. Marking this, the markets displayed optimism and Lebanese currency saw an increase in its value. 

Second, a bumpy road. Mikati and his cabinet take over amidst a crippling crisis and have the daunting task of bringing Lebanon on the path to recovery. However, it is not an easy task, as gaining confidence both in the Parliament as well as among the public is important. Implementing recovery plans together with the Lebanese political class and international actors like France and organizations such as WTO, IMF, requires multiple rounds of negotiation and confidence-building measures.