Hellish scenes threaten to get worse.
Increasingly, Lebanese officials and politicians are raising the specter of internal conflict. That comes just 31 years after the end of the country’s terrible 15-year civil war. This black chapter ended with a modus vivendi that critics say systematized government corruption, culminating in a financial collapse that has once again pushed Lebanon to the brink.
In a statement to CNN this week, Lebanon’s interim minister Mohammed Fahmi said there was a higher likelihood of “security breaches such as explosions and assassination attempts” in the country.
But on the streets of Lebanon, this same political elite is overwhelmingly unpopular. Even ardent supporters of conventional parties are calling for a review of the country’s denominational power-sharing system, which allocates seats per sectarian group. Deputies publicly admit their failures, and some of them say they should leave office too. Left-wing groups, such as the Communist Party, have called for an “escalation” of the country’s popular uprising, which began in October 2019 with the aim of overthrowing the ruling class.
The report details exactly what this means: a rapid slowdown in economic growth, a closed currency, small depositors who bear most of the economic losses, an impressive depletion of the country’s resources, including human capital, and a rate of poverty exceeding 50% in 2021.
According to the World Bank, the catastrophe could have been largely avoided. Lebanese leaders have avoided, even for some of the most cynical observers, adopting policies that could mitigate the financial decline.
The state has done little or nothing to alleviate poverty. No formal capital controls have been implemented for almost a year and a half after banks began limiting cash withdrawals to depositors in a discretionary manner. That practice which provoked the flight of capital from the super-rich, while the working and middle classes watched their deposits helplessly, losing most of their real value.
The country also does not have an official exchange rate platform, leaving the fall of the lira at the mercy of the shady black markets and the ever-present possibility of currency manipulation.
The economic outlook is becoming more bleak almost daily. The country’s currency on the black market has now lost 90% of its value in October 2019. As Lebanon burns through its foreign reserves, the interim Minister of Energy, Raymond Ghajar, raised this month the possibility of electrical outages 24 hours a day, 7 days a week, plunging the country into “total darkness.”
The loss of subsidies could be the most important moment that will threaten to incline Lebanon into similar scenarios in Venezuela, and aggravate the lack of food, fuel and medical care.
Families living on a minimum wage (now less than $ 50 a month) will not be able to afford staple foods as inflation skyrockets. The already forced security forces, which have to contend with the frustrations of their new level of impoverishment, will have to deal with rising crime rates and the possibility of political tensions spreading in the long run.
The only light of hope is the possibility of an imminent political resolution that in turn will produce efficient and effective government. But for most who are familiar with the largely elite record of the political elite, this seems like a pipe dream. In the absence of leadership, the economy could continue to move toward the unknown.
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