Almost a year after the explosion in Beirut, Lebanon sinks into economic catastrophe – 06/28/2021 – world

When the Port of Beirut exploded in August 2020, the whole world turned to the city and mourned its destruction. Then he forgot about this poor place. In the meantime, however, Lebanon is experiencing a crisis of even greater proportions than the explosion: the catastrophe of its economy.

GDP (gross domestic product) is expected to decline by 9.5% this year, according to the World Bank. In 2020, it had already fallen by 20%. The Lebanese pound has lost 90% of its value against the dollar in less than two years. Prices have risen and wages have stagnated – as a result, more than half of the population now lives below the poverty line and with the prospect of worsening the situation.

In early June, the World Bank issued a report warning of the risk that at current rates the country will experience one of the worst economic crises in the world since the mid-19th century. the rate of reduction in GDP per capita – which was 40% between 2018 and 2020.

Gas stations are an example of the tragedy experienced by the Lebanese. Inflation and subsidy cuts have caused drivers to band together to refuel their cars after hours of waiting. The videos circulating on social networks cause consternation. In one of them, a man defends his vehicle by holding a snake in his hand. In another, an elder pushes his car without gasoline to the pump.

“The future looks rather bleak,” says Mohanad Hage Ali, researcher at the Carnegie Studies Center. “We have come to a dead end. We’re going to have to change, one way or another, and we live in an area of ​​the world where things sometimes end in violent ways. There is news, in this regard, that the Lebanese army is also struggling to refuel its vehicles. A collapse of the security forces in a country full of weapons would have a catastrophic effect.

There is not only one explanation for the Lebanese crisis. One of the main factors is the public debt that its leaders have carried since the end of the civil war, which lasted from 1975 to 1990. The country borrows mainly to repay its loans. Lebanon currently owes the equivalent of 174% of its GDP, much more than it produces in a year. Added to this are two unexpected tragedies made worse by a fragile government: the Covid-19 pandemic, which crippled the economy, and the explosion at the port of Beirut, which left 207 people dead and billions of dollars in damage.

The situation is made even worse by a political class that seems unable – or disinterested – to get their shoes dirty. Prime Minister Hassan Diab’s office resigned shortly after the explosion, and so far there has been no consensus among the parties to form a new, final government. “They refuse to act,” Hage says.

For the analyst, one of the reasons for the political lethargy is the fact that the leaders of the various factions are keeping an eye on the elections next year. They are afraid of forming a government, of making unpopular decisions and thus damaging their chances at the polls. “There is a political obstacle as the population dies from lack of food, medicine and gasoline.”

This crisis affects the thousands of Brazilians of Lebanese origin who live in the country, especially in the region of the Bekaa Valley. This is the case of Saosan Hussein Saleh, 41, born in Brazil and having migrated to the village of Sultan Yacoub in 2000. She is part of a cooperative of 12 women who sell Brazilian frozen snacks. Members find it difficult not to close the doors.

The ingredients they use are almost all imported, such as milk and chicken. With the collapse of the Lebanese pound, they have become invaluable. The village only has electricity for four hours a day. For the rest, it depends on the generators – which in turn depend on fuel, which is also scarce. Today, the Sultan Yacoub Cooperative — the name of the company — produces 10% of its capacity. It survives thanks to the ingenuity of the members and the help of NGOs. “We are desperate,” she said.

“What is happening is not only an economic crisis, but also a social one”, explains Fadi Ahmar, professor at the Lebanese University. “We are on the verge of total collapse of the country.” He says that in recent years the state’s infrastructure and its industries have collapsed.

Ahmar accuses the corruption of the situation that Lebanon has reached. The money the international community gave the country to help it ended up in the pockets of politicians – so much so that creditors did not want to lend. The professor also accuses the radical militia of Hezbollah, which led Lebanon to clashes with Israel and with insurgents in neighboring Syria.

Also because of the political influence of this organization – considered terrorist by the United States – Lebanon has found it difficult to negotiate economic aid on the brink of the precipice, he said.

“I don’t see a way out,” says Hage, a researcher at the Carnegie Center. “Judging by the actions the Lebanese politicians have taken in the past, I imagine they will remain seated until the economy goes into shock, forcing the international community to act.”

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