Explained: The crisis in Lebanon

Explained: The crisis in Lebanon

Today four out of five people in Lebanon are living in poverty.

Lebanon has been mired in political and economical crises since 2019. Its problems are compounded by financial mismanagement, inadequate government, the COVID-19 pandemic, and the aftermath of the devastating Beirut port explosion.

Lebanon Political system

Lebanon has a very complex governing system. It is a country that divides its political power along religious and sectarian lines, essentially trying to give everyone a piece of the pie. But power-sharing takes a whole different form in Lebanon. With the stated intention to give every group an equal say in the political affairs of the country, the system has tried to maintain peace.

Background

The National Pact formed in 1943 which ended the French mandate of the country created the modern-day states of Syria and Lebanon. Within Lebanon, the government was divided up, so that the president would always be a Maronite Christian, the prime minister a Sunni Muslim, and the speaker of parliament a Shia Muslim.

The seats in Parliament were set at a ratio of six to five in the favour of the Christian. A constitutional amendment was going against the spirit of the National Pact elevated the role of the presidency to the single most powerful position. This imbalance of power stroked tensions in an already fragile system and with the influx of Palestinians from the Arab-Israeli war, the country was dragged into a 15-year civil war. The era also saw the creation of Amal and Hezbollah entrenching sectarian identities.

In 1981 the Taif Agreement transferred much of the president’s authority to the cabinet and increased the number of Muslim MP’s, finally closing the previous imbalance of power which ended the civil war the following year. A new period called the Second Republic began. The country saw the first democratic election in 20 years.

One would assume that things would have been simpler after the 1990s. But the political parties kept blaming each other. The country couldn’t function properly as religion was involved in politics and every community would vote for their own community’s political party and they would only further the interests of their community. This led the external forces to exert influence on Lebanon. Iran supported the Shia community in Lebanon. Similarly, Saudi Arabia and Israel supported Sunni and Maronite Christian communities respectively.

Economic Crises 2019

In 2019 more than one-third of the population of Lebanon was below the poverty line. After the civil war, the country’s infrastructure was never rebuilt due to a lack of funds from the government. The government was in huge debt, and it started increasing the tax on the public. By September and October 2019, the economic crises escalated to a point that people were not able to withdraw money from ATMs. And on October 17, 2019, the government announced a tax on WhatsApp calls.

It was a tipping point for the public; people refused to endure anymore and thus began the October revolution in 2019. Although the Lebanon government scrapped the WhatsApp tax, protests raged. But triggered a new revolution, tens of thousands of peaceful protesters took to the streets across the country calling for their social and economic rights, accountability, an end to corruption, and the resignation of all political representatives.

October Revolution-2019

A fragmented government created an incapacitated system and the people claimed to be fed up with it. The cabinet approving reforms and forming an anti-corruption panel along with the resignation of Prime Minister Saad Hariri.

A new Prime Minister was elected whose name was Hassan Diab; he announced that Lebanon must take strict economic actions to improve the situation. People had a lot of expectations from their new prime minister, but then the crisis of COVID-19 further deteriorate the economic conditions.

Beirut explosion-2020

On August 4, 2020, a large amount of ammonium nitrate stored at the Port of Beirut in the capital city of Lebanon exploded, causing at least 218 deaths, 7,000 injuries, and US$15 billion in property damage, and left an estimated three lakh people homeless. A cargo of 2,750 tonnes of the substance had been stored in a warehouse without proper safety measures for the previous six years. The explosion was preceded by a fire in the same warehouse, but as of October 2021, the exact cause of the detonation is still under investigation.

Lebanese Prime Minister Hassan Diab and his cabinet resigned in the aftermath of the Beirut explosion due to mounting political pressure and anger at the Lebanese government for their failure to prevent the disaster, exacerbated by existing political tensions and upheavals within the country. During his resignation, Prime Minister Diab said the country is now at the mercy of God.

Explained: The crisis in Lebanon
‘Thousands of dollars’ found dumped in a garbage container in Lebanon

Lebanon in Collapse 2021

Lebanon is basically a plane that is crashing but hasn’t crashed yet. Today four out of five people in Lebanon are living in poverty. Given the economic crises, the Lebanese are forced to flee their own country. There is finally a new government after more than a year but the government is part of the problem. The country is unravelling on so many fronts and all the different crises are compounding on each other.

Currency Crises

In late 1990 the Lebanese pound was pegged to the United State dollar, the exchange rate was fixed at 1500 pounds for one dollar. Sadly, Lebanon’s economy wasn’t strong enough to really justify that value, as the value was sort of artificial.

For a long time, governments and banks managed to prop up the currency to maintain that peg, but now they are at a point where they can’t do that anymore. So the currency has crashed, losing up to 30 percent of its value in two years. That means the people’s savings and salary have tanked. So if the country’s currency is worthless then it makes importing very expensive. For Lebanon that is a massive deal because it imports almost everything including all its fuel.

Fuel Crises

The government simply can’t afford to buy enough fuel and it’s abandoned some of the fuel subsidies that helped make fuel affordable for Lebanese people. So now the people have got both shortages and super high prices.

For those trying to get to work or school or go about their business, they are fast running out of transport options. So the fuel crisis is creating a domino effect; drinking water cost four times what it uses to and the entire country is facing major disruption of power supply because there is no fuel for generators. This is resulting in health risks in hospitals.

Health Crises

Hospitals are struggling; the United Nations has got involved even supplying fuel to help keep generators running. And like other imports medicine has become too expensive or hard to find. Even ordinary drugs like paracetamol let alone life-saving ones for diabetics or cancer patients. The state is missing in action, and that’s why things have become so desperate.

New Government

In Lebanon recently the political parties have finally agreed on a new government after 13 months. Politicians have agreed on how to distribute power in a new cabinet. But most of the faces are familiar. Like billionaire Prime Minister Najeeb Mikati, who dropped the job twice already. He is trying to manage expectations but they’ve already hit rock bottom.

A lot is to be done to hold the country back from collapsing. Priority number one is to get cash into the country and the government’s best bet is to secure a bailout from International Monetary Fund (IMF). It is now planning to reopen talks with them after the last one stalled in 2020. But if the government wants money the government also needs to present a recovery plan that includes a bunch of reforms.

If there is any chance of that happening, it could start with parliamentary elections coming up in May 2022. But that’s a big ‘if’. Just Like fuel and medicine hope that politician will actually change things in all seriousness before other things get in short supply.

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