Prime Minister-designate Saad Hariri’s decision to step down has jolted Lebanon, threatening to throw the crises-ridden country into further political and economic instability and social unrest, analysts said, amid warnings of chaos if a new government is not formed quickly to remedy the alarming situation.

Even the international community, led by the United States and France, which have been pushing for the rapid formation of a new Cabinet, reacted with dismay to Hariri’s dramatic move, voicing fears of a further economic deterioration and calling for swift parliamentary consultations to choose a new prime minister and the formation of a government capable of meeting the numerous challenges facing Lebanon.

Hariri’s decision to step aside came at a time of mounting local, regional and international pressures on rival Lebanese leaders to agree on the quick formation of a new government to rescue Lebanon, which is wrestling with a series of crises, including an unprecedented economic meltdown, caused by decades of corruption and mismanagement, that is hitting the Lebanese hard and threatening them with poverty and hunger.

Lebanon is in the throes of a severe economic and financial crisis, posing the gravest threat to its stability since the 1975-90 Civil War. The Lebanese pound has been in a free fall since October 2019, losing over 90 percent of its value, pushing more than half of Lebanon’s 6 million population into poverty and unemployment. A day after Hariri stepped down, the pound hit a new record low Friday, trading at LL23,500 to the US dollar on the black market for the first time in Lebanon’s history, sending prices of food and everything else skyrocketing.

Summing up the grave ramifications of his decision, Hariri said: “May God help the country.”

“Hariri stepping down will further expose the [President Michel] Aoun-Nasrallah political regime to a greater political and economic instability and to a rapid social deterioration, including currency devaluations and the lack of essential commodities such as food, fuel, and medicine,” Dr. Imad Salamey, associate professor of political science at the Lebanese American University, told The Daily Star. “I think the current ruling alliance has a preference for collapse and chaos in a bid to regain the upper hand in any future restructuring of the state as well as to establish a pretext to postponing the 2022 elections.”

He was referring to Hezbollah leader Sayyed Hasan Nasrallah, whose Iranian-backed party has been linked since 2006 in a strategic alliance, known as the “Memorandum of Understanding” with the Free Patriotic Movement founded by Aoun and now headed by his son-in-law, MP Gebran Bassil.

Political analyst Kassem Kassir said Hariri’s decision to abandon his efforts to form a new government has further compounded the already complex situation and thrown the country into uncertainty. He said Lebanon faced three options, including the risk of total collapse and security chaos.

“The first option is to reach agreement on a new candidate for the premiership with internal and external approval who can form a new government. This is a weak probability but it is possible. If this happens, pressure [on Lebanon] will ease and we will go to [parliamentary] elections,” Kassir told The Daily Star.

“The second option is the failure to form a government that will leave Hassan Diab’s [caretaker] Cabinet in power, while internal pressure will continue and efforts will be exerted to prevent a major and comprehensive collapse. Of course, this is a difficult adventure,” he said.

The third option, Kassir added, is a “comprehensive breakdown and security chaos and resorting to an unconventional alternative such as a military government.”

“Certainly, the regional and international powers will be torn between two choices: Increasing pressure on the political class and preventing total collapse,” he said. “Internal conditions are difficult and pressures might be stepped up if no political solutions are reached.”

ARMY WARNS OF CHAOS

A day after Hariri abandoned his efforts to form a government, Army Commander Gen. Joseph Aoun warned of chaos, saying the situation was worsening and would further escalate as a financial crisis fueled political and social tensions. "Our responsibility is large in this period and we need to preserve the security of the nation and its stability and prevent chaos," Aoun said in a speech during a tour of Army units in the Bekaa region Friday.

After Hariri's announcement Thursday, protesters had blocked roads in predominantly Sunni areas, burning tires and garbage with some clashes resulting in one Army soldier being injured. On Friday 15, Army soldiers were injured in confrontations with protesters in the northern city of Tripoli.

Hariri’s decision came nearly nine months after his designation by a parliamentary majority to form a new government.

Hariri said Thursday he decided to step down after Aoun rejected his new Cabinet lineup of 24 nonpartisan specialists to deliver reforms and avert all-out economic collapse. He said the proposed Cabinet list of 24 nonpartisan specialists with no blocking one-third plus one [veto power] to any side was in line with the French initiative and also Parliament Speaker Nabih Berri’s initiative.

Hariri was designated to form the new government on Oct. 22 after the resignation of Diab’s Cabinet in the aftermath of the massive Aug. 4 Beirut Port explosion that killed 210 people, wounded thousands and devastated entire neighborhoods in the capital. Diab continues in a caretaker capacity.

Salamey, the LAU professor, seemed skeptical about the formation of a new government to implement reforms.

“Any new government engineered by the ruling Aoun-Nasrallah alliance will face the same fate as that of the Diab government: lack of Sunni and Arab support, legitimacy deficit, and international suspicions in its ability to reform,” Salamey said. “Thus, it is most likely that the Aoun-Nasrallah regime will nominate a prime minister while postponing government formation. This way the lifespan of the Diab government will be extended until a new arrangement is attained to favor Hezbollah and its Aounist allies. Hezbollah's choice to nominate Saad Hariri once again is not out of options.”

He added that among scenarios being considered is that different political groups agree to form a transitional government that prepares for the 2022 general elections. “But Hezbollah and the Free Patriotic Movement will only accept this under two conditions: a breakthrough in the US-Iranian nuclear negotiations that reap a regional deal to reverse the Maximum Pressure policy of former [US] President Trump against Iran or, alternatively, insuring an electoral sweep that would guarantee electing as president Mr. Gebran Bassil,” Salamey said.

Like Salamey, Sami Nader, a professor of economics and international relations at Universite St. Joseph, was also pessimistic about the swift formation of a new Cabinet to deliver reforms badly needed to secure the release of promised international aid to the cash-strapped country.

“I don’t see a prime minister or a new Cabinet any time soon. First of all, I don’t think the Sunni leadership would accept someone else other than Saad Hariri for the time being. So this is the Sunni constituency and you have a problem at this level. Secondly, the only remaining option is something similar to Hassan Diab, a Sunni who is not that representative of his constituency. But this will anger the Sunni community,” Nader, also the director of the Levant Institute for Strategic Affairs, a Beirut-based think tank, told The Daily Star.

He added that local players might seek either to revive Diab’s Cabinet, or delay the government formation untiI Iran reaches a deal with the international community on its nuclear program.

Noting that “Lebanon is heading for further deterioration” after Hariri stepped down, Nader said: “I am not of those who think that if Hariri succeeded in forming the government, this would have been the end of our problems. This is because all Hariri’s previous governments were not that successful. I am not sure he would have been able to form an independent government capable of unleashing reforms.”

Yet, Nader said that Lebanon, if Hariri had been able to form a government, “had a chance to stop the rapid collapse because he got part of the international support.”

“Hariri got the support of France and maybe a government under his command would have been capable to unleash part of the international financial aid promised to Lebanon if it could carry out some reform,” he said.

Nader blamed Iran and its ally, the powerful Hezbollah, for the political stalemate that for nearly 11 months has left Lebanon without a fully functioning government. “I still believe that the core problem is not a problem between Hariri and Aoun. I think the major problem is the problem of Hezbollah and the conflict between Iran and the rest of the world because Iran is still holding the Lebanese card and is still not committed to facilitating the formation of a government in Lebanon,” he said.

Nader added that as long as Hezbollah got the upper hand in Lebanon, Iran wants to use the Lebanese card as “a bargaining chip” in negotiations with Western powers over its nuclear program.

“This is why we are a pending issue at the Vienna table. The time is not ripe yet for the negotiators there to start talking about Lebanon,” Nader said. “As long as Lebanon is not distancing itself from regional conflicts and as long as it is under the control of Hezbollah, there is no way to form a government.”