P ITY THE finance minister who must instil confidence in Lebanon, which has the fifth-highest public-debt burden in the world, at 150% of GDP . But Ali Hassan Khalil did a staggeringly poor job of it when he told a local newspaper his country was ready to default. “It’s true that the ministry is preparing a plan for financial correction, including a restructuring of public debt,” he said in an interview published on January 10th. Within a day its bonds fell to a record low. Mr Khalil soon clarified that he meant rescheduling, not restructuring. For ratings agencies the distinction is moot. On January 21st Moody’s downgraded Lebanon’s bonds even deeper into junk.

In a normal country, one banker mused, Mr Khalil’s comments might be a sackable offence. Lebanon is not a normal country. Nine months after the first parliamentary election in nine years, nobody has formed a government. The prime minister-designate, Saad Hariri, is stuck in a dispute with six Sunni MP s aligned with Hizbullah, the powerful Shia militia-cum-party. Parliament is frozen. There is no budget for 2019. Even if Mr Hariri wanted to fire his finance minister, doing so would lead to weeks of haggling over a replacement.

This is hardly Lebanon’s worst political jam. From 2005 to 2017 parliament could not pass a budget. But it comes at a time of looming economic crisis as well. Since 2010 GDP growth has averaged less than 2% a year. Inflation hit 7.6% in 2018, its highest in five years. The purchasing managers’ index fell from 46.7 to 46.2 in December. A figure below 50 suggests a contraction; Lebanon has not crossed above that threshold since 2013. The chamber of commerce says about 2,200 firms closed last year. New construction has slowed and an estimated $9bn worth of properties are empty.

With politics in disarray, the central bank drives economic policy. It borrows billions from commercial banks to prop up the Lebanese pound against the dollar. Foreign-currency deposits must grow by 6-7% annually if it is to defend the peg, reckons the IMF . In the 11 months to November 2018, the last month for which data are available, banks’ holdings of foreign currency increased by just 4%. Not all of that is new money, either. Customers seem to have converted 3.9trn pounds ($2.6bn) to dollar accounts. The central bank has ordered firms like Western Union to stop paying out money transfers in dollars.

Optimists wave this away with breezy talk of Lebanon’s “resilience” and hope that wealthy Gulf patrons will come to the rescue. Qatar stepped in after Mr Khalil’s blunder and promised to buy $500m in Lebanese bonds, which helped stabilise the market. Not to be outdone by his Gulf rival, the Saudi finance minister pledged to “support Lebanon all the way”, though he offered no details. But half a billion is a pittance for a country with $33bn in outstanding dollar bonds. Resilience does not pay creditors.

In January the economics ministry released a study from McKinsey, a consultancy, with advice on fixing the economy. Though some of its ideas are unrealistic, a few are common sense. Tourism and agriculture have room to grow. Lebanon’s well-educated population could export services or create tech startups. The country also stands to gain from reconstruction in war-ravaged Syria.

But all the suggestions rest on the government fixing infrastructure, such as unreliable electricity and some of the world’s worst internet connections. Foreign donors offered to help at a conference in Paris last year, pledging $11bn in mostly concessional loans. But the money will not flow until Lebanon has a government. Ministers warn that donors are ready to take their cash elsewhere. That would be another blow to investor confidence—though at least that would be one debt Mr Khalil would not have to worry about.

Correction (March 13th 2019): The original version of this article said that Lebanon had $49bn in outstanding dollar bonds. In fact, it had $33bn. We also said that the finance ministry released a study on the economy by McKinsey, a consultancy. It was the ministry of economics that released the study.