Lebanese PM Najib Mikati in Iraq to discuss economy

Lebanon's currency has lost more than 90 per cent of its value against the US dollar in recent months

Lebanese Prime Minister Najib Mikati. Photo: EPA

Lebanese Prime Minister Najib Mikati arrived in Baghdad on Monday and held talks with his Iraqi counterpart Mustafa Al Kadhimi on a short visit, an Iraqi government official said.

Mr Mikati is also scheduled to meet other officials.

Details about the agenda were scant, but the official said the two sides “will discuss bilateral relations, including in the fields of economy and politics.”

Lebanon's Head of the General Security Service accompanied Mr Mikati, while Iraqi Oil Minister, Ihsan Abdul-Jabbar attended the discussions.

Lebanon is suffering from a deep financial crisis. Its currency has lost more than 90 per cent of its value against the US dollar, leading to surging inflation, increased unemployment and poverty.

In June, the World Bank ranked Lebanon’s economic crisis among the world’s top 10 crises – possibly even the top three – since the mid-19th century.

As a result, the country’s decades-old power problems have intensified over shortages of diesel and other fuel. The central bank has reduced its subsidies for oil imports because of falling foreign currency reserves.

In July, Iraq and Lebanon signed a one-year deal to provide the cash-strapped country with fuel.

Under the agreement, Lebanon purchases one million tonnes of Iraqi fuel — to be paid for in Lebanese pounds. In return, Iraq will spend the sum on Lebanese services.

As the Iraqi heavy fuel oil can’t be used in Lebanon because of its high sulphur content, Lebanon is swapping it with another kind that is suitable to run the country’s power plants.