Lebanon is back in familiar terrain, after MPs failed to agree on a successor to President Michel Suleiman before the 25 May deadline upon which his six-year term in office expired.

A political vacuum looms as the country’s factions prepare to fashion an agreement on electing a new president, a task they have failed at in recent months.

If past history is anything to go by, the process could take many months. Troublingly for Lebanon, this time there is less appetite among the international community to help forge consensus, as Saudi Arabia did in 1989 with the Taif agreement that brought the civil war to a close, and Qatar with its 2008 Doha agreement that resolved a standoff between the rival Syria/Hezbollah-backed March 8 and the Sunni-backed March 14 coalitions.

Delayed reforms

With the presidential seat in Baabda palace vacant, key economic decisions will be shelved, such as a proposed new civil servant salary scale. Failure to agree the salary increases, which will cost at least $1.2bn to implement, could provoke renewed unrest in Lebanon’s public services, following extensive protests by state employees at pay conditions.

An extended stalemate could also force a delay in parliamentary elections, scheduled for November 2014, having already been delayed from the original date of June 2013. 

“The state now is crippled and it becomes a caretaker one,” said Samir Geagea, the official March 14 bloc presidential candidate.

Prime Minister Tammam Salam’s cabinet will temporarily take on executive powers. Constitutionally, parliament’s only role now is to elect a president; it cannot vote on any legalisation.

Instability concerns

The biggest concern is that some of the improvements in security witnessed in recent months – thanks largely to an army-led clampdown on sectarian violence in the northern city of Tripoli – could be undone if the presidential vacancy persists for long. One of President Suleiman’s noted achievements in office was to keep a lid on overspill from the Syrian conflict next door. Without political direction from the top, instability looks a likely consequence.

We are afraid of a political vacuum that might lead to a structural redistribution of power in Lebanon 

Albert Kostanian, Kataeb Party

The economy remains in fragile condition. “The formation of a government earlier this year and the improvement in security conditions have not materially altered economic activity,” says Nassib Ghobril, chief economist at the local Byblos Bank. “We’re still in a slow growth environment, with real GDP growth at just 0.7 per cent annually in the first quarter of 2014. Consumer confidence is low and so is investor sentiment. Companies will be unwilling to undertake major projects in this uncertain environment.”

Much will hinge on the duration of the stalemate. The last time Lebanon experienced a presidential vacuum – in 2007-08 when there was bitter disagreement over the extension of President Emile Lahoud’s term in office —the deadlock lasted eight months, until Qatar helped forge an uneasy compromise between the March 8 and 14 camps.

Power redistribution

The risk now is that the presidential vacuum could threaten the confessional power-sharing formula that has underpinned the post-civil war system of governance in Lebanon.

With the major cleft now between Sunni and Shia, rather than Christian and Muslim, change is in the air – a concern for Christians in particular. “We are afraid of a political vacuum that might lead to a structural redistribution of power in Lebanon,” says Albert Kostanian, a member of the Kataeb Party, which is part of the March 14 bloc.

The MPs’ failure to agree a presidential candidate reflects the stark fault lines that continue to disfigure Lebanon’s politics. The March 8 bloc has been unwilling to provide the necessary parliamentary quorum that would allow a president to be elected; the Shia group wants to ensure that a future president will not undermine its interests. It bridled strongly at President Suleiman’s frank criticism of its intervention in the Syrian conflict (and failed to send any representatives to the president’s leaving ceremony). It remains to be seen if his successor will take as tough a line on Hezbollah’s activism on behalf of the Al-Assad regime.

This situation will have to be sorted out internally. The outside powers, whether regional or international, have other priorities right now

Farid Khazen, MP in Change and Reform faction

The official presidential candidate of the March 8 bloc is veteran ex-army general Michel Aoun, a highly divisive figure who alienated part of his support base when he returned to Lebanon in 2005 and aligned himself with the Syrian-backed March 8 camp – having previously been cast as a devoutly anti-Syrian figure.

Confirming Aoun’s chameleon-like approach, the presidential hopeful has spent the past few weeks in talks with the Sunni-dominated Future Movement of former prime minister Saad Hariri, which forms the core of the rival March 14 camp. This outreach may eventually lead to a deal under which Hariri’s MPs will give their support to Aoun’s candidacy.

“There’s a serious dialogue under way between Aoun and Hariri, and if it continues it will have a positive impact,” says Farid Khazen, an MP in Aoun’s Change and Reform faction. “If it doesn’t succeed, there will be no damage done. It’s an opportunity for national reconciliation in Lebanon.”

Power trinity

Aoun has spoken of a new “power trinity” that brings together himself, Hariri and Hezbollah leader Hassan Nasrallah. This, however, looks a very long shot indeed, not least given the bitter enmity between Saad Hariri and Hezbollah, some of whose members have been accused of involvement in the death of his father, Rafiq. Some Lebanese commentators believe Hezbollah’s preferred president would be armed forces chief Jean Kahwagi, who would be a more consensual figure than Aoun.

Aoun’s flip-flopping between the rival camps does not endear him to many. “Aoun’s attempts to be consensual are not credible,” says Kostanian. “On issues such as the Special Tribunal for Lebanon [investigating the assassination of former prime minister Rafiq Hariri] and Hezbollah’s weapons, he remains very close to Syria’s regime. This makes forging consensus around him unrealistic.”

Alternative candidates

In reality, neither the March 8 or 14 camps have the means to get their preferred candidate elected outright. Alternative candidates to Aoun such as Geagea – a former warlord – have been unable to shake off a reputation for extremism. That leaves non-political candidates such as Kahwagi or the increasingly hotly tipped Central Bank governor Riad Salameh as the most credible successors to President Suleiman.

“It will most likely be a consensual figure without any popular support or a particular vision, because this person will have to manage the crisis and be able to talk with everyone,” says Kostanian.    

There appears to be growing support for the experienced Salameh to take the job.  The Banque Du Liban governor has one particular virtue in not having a military background, unlike the previous two presidents. “There’s no appetite to have yet another general in power,” says one Beirut-based banker.   

There is always a chance that a president could emerge from outside the present circle of frontrunners. Younger Lebanese, looking to shake up the sectarian system that they believe has held the country back over many years, are backing the reform-minded, 44-year old former Interior Minister Ziyad Baroud.  

International mediation

In previous cases of a presidential vacancy, as in the run-up to the 2008 Doha agreement, it has needed international diplomacy to usher in a new occupant at Baabda palace. This time around, there is little expectation of any outside mediation to help forge consensus out of Lebanon’s political chaos.

“This situation will have to be sorted out internally,” says Khazen. “The outside powers, whether regional or international, have other priorities right now.”

With several countries in the region in various stages of political upheaval, Lebanon’s travails have slipped down the international agenda. “The battlefield is no longer just Lebanon, it’s Syria, Iraq and Egypt,” says Khazen.

Whoever does become president will have a tough job in keeping Lebanon on an even keel, with in excess of 1 million Syrian refugees now present in the country, draining scarce national resources. Hezbollah’s controversial endeavours in Syria have intensified the sectarian divide in Lebanon; the series of bombs targeting southern Shia suburbs in Beirut earlier this year are testament to the capacity of the Sunni-Shia rift to deteriorate into violence.

For now, the economy looks able to withstand a few months of political vacuum. The local Bank Audi forecasts real GDP growth of 3 per cent this year, and Saudi Arabia’s lifting of its travel advisory on Lebanon could give a boost to the summer tourism season.

But allowing the presidential seat to remain vacant for too long risks leaching away the fragile stability that prevails for now.