Hezbollah Ally Mikati to Head New Lebanon Government

Mikati Aims to Form Lebanon National Unity Government
Billionaire businessman Najib Mikati said, “I extend my hand to everyone and my aim is to form a government that encompasses everyone.” Photographer: Stan Honda/AFP/Getty Images

Jan. 25 (Bloomberg) -- Lebanese President Michel Suleiman asked Najib Mikati, candidate of the Hezbollah movement and its allies, to form a government as supporters of rival parties took to the streets in protest.

Mikati won the backing today of 68 lawmakers to 60 for caretaker Prime Minister Saad Hariri after Suleiman canvassed their views in two days of talks. Hariri’s Future movement yesterday said it wouldn’t take part in a government headed by anyone backed by the Shiite Muslim Hezbollah and its allies.

The premier-designate said in a televised speech that he would follow Lebanese protocol and meet with former prime ministers starting tomorrow and begin consultations Jan. 27 to form a cabinet. He reiterated a pledge to have a government representing the entire country, saying, “I don’t think there is justification for any political party to reject dialogue.”

Supporters of the pro-Western Hariri rallied yesterday and again today in Beirut and other cities, answering a call by Sunni Muslim lawmakers to take part in a “day of rage” against what they described as a coup by Hezbollah. Hariri appealed for calm and the army stepped up security.

UN Inquiry

Hezbollah and its allies brought down Hariri’s coalition by resigning from the Cabinet on Jan. 12. The group is seeking to halt the United Nations inquiry into the killing of former Prime Minister Rafiq Hariri, Saad’s father, saying it was instigated by the U.S. to target Hezbollah. The dispute threatens a return to sectarian violence in a country that emerged from a 15-year civil war in 1990 and has since seen outbreaks of conflict.

Credit-default swaps on Lebanese debt rose to an 18-month high of 363 basis points as of 6:30 p.m. in Beirut, according to CMA prices. They have risen almost 70 basis points this year.

“The make-up of Lebanon’s government is, as we’ve repeatedly said, a Lebanese decision, but this decision should not be reached through coercion, intimidation, and threats of violence,” White House spokesman Tommy Vietor said today in an e-mailed comment. “Hezbollah, backed by Syria, engaged in all three to achieve its political goals.”

The UN prosecutor investigating Hariri’s 2005 killing filed an indictment last week. The contents won’t be made public for several weeks while they are reviewed by the pre-trial judge.

Asked what his approach will be regarding the UN tribunal in a phone interview yesterday, Mikati, 55, said: “It’s a disputed issue in Lebanon and the coming government will deal with this matter and all issues in a calm national dialogue.”

Power-Sharing Arrangement

Lebanon’s power-sharing arrangement requires that the president be a Maronite Christian, the prime minister a Sunni and the speaker of parliament a Shiite. The bloc led by Hariri, 40, defeated Hezbollah and its allies in June 2009 elections.

Hundreds of Hariri supporters took to the streets in Beirut, the southern town of Sidon, Tripoli in the north and other parts of the country, burning tires and blocking roads, local television channels showed.

The protesters called the nomination of Mikati by Hezbollah and its allies a betrayal. In a televised press conference yesterday, Sunni lawmaker Mustafa Alloush, a Hariri ally, called for more demonstrations today to show “their refusal of Persian tutelage” over Lebanon, a reference to Hezbollah’s backers in Iran.

The Lebanese army stepped up its deployment of troops at potential flashpoints. The U.S. Embassy advised Americans to be vigilant regarding their security.

Hezbollah, Israel

The U.S. and Israel classify Hezbollah as a terrorist organization. The Shiite group won popularity by helping drive out an occupying Israeli army in 2000 after almost two decades, and fought a monthlong war against Israel in 2006.

Syria, Hezbollah’s other backer, was initially blamed for Hariri’s death by many Lebanese, and withdrew its troops from the country following a wave of protests. Both Syria and Hezbollah have denied responsibility for the killing, though Hezbollah’s leader, Hassan Nasrallah, says he expects the tribunal to indict members of his group.

In a televised speech today, Nasrallah said Prime Minister-designate Mikati is a “centrist” and not a Hezbollah member. The group’s leader called on all in Lebanon to seize the “new opportunity” before them and take part in a national unity government headed by Mikati. Mikati headed a caretaker administration supported by Hezbollah before elections in 2005.

‘Reforming the Economy’

Mikati, a graduate of the American University of Beirut, said in an interview yesterday his government “will give a lot of space for the economy and reforming the economy positively.”

The U.S. “should be realistic and pragmatic” about Hezbollah’s role in a new government, said Rami G. Khouri, director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut. “If you negotiate with North Korea and with the Taliban then you can certainly negotiate with Hezbollah and their allies.”

An initiative by Syria and Saudi Arabia failed to solve the political deadlock in Lebanon before the collapse of Hariri’s government. Saudi Arabia, a backer of Hariri, and Syria didn’t disclose details of the proposal.

“Ultimately the question is: Will Mikati be able to bridge the differences between Saudi Arabia and Syria, the two traditional power brokers in the country?” said Josh Landis, director of the Center for Middle East Studies at the University of Oklahoma in Norman. “If there is no agreement between Syria and Saudi Arabia then there will be more trouble in Lebanon.”

Mikati is worth $2.5 billion, according to Forbes magazine. He founded Investcom, which runs phone networks in emerging markets, with his brother, Taha, in 1982. MTN Group Ltd., Africa’s largest mobile-phone operator, bought the company in 2006 for $5.5 billion.

The two brothers run M1 Group, a holding company whose portfolio includes real estate investments in the U.S., Europe and the Middle East, as well as the Geneva-based Baboo airline, French retailer Faconnable and Avante Petroleum, an exploration and production company.

To contact the reporter on this story: Massoud A. Derhally in Beirut, Lebanon, at mderhally@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.