The Lebanese financial system collapsed in 2019, making the country neither rich nor poor. The Lebanese pound lost much of its value after the Beirut blast. According to the United Nations, this event has caused four out of five Lebanese people to become poor.
The Lebanese Civil War lasted from 1975 to 1990, and tens of thousands of Lebanese fled the country seeking work elsewhere. Now that financial assistance to reduce costs has been eliminated, institutional breakdowns have occurred, and thousands of Lebanese seeking work abroad have emigrated.
Numerous Lebanese political leaders acknowledged that the crisis was the result of years of wasted spending and corruption. In addition, the World Bank described the crisis as a “deliberate depression” created by those in political and economic power.
Economists say that if politicians delay passing reforms agreed with the International Monetary Fund (or IMF) in April, the economic downturn will deepen. billions of dollars in aid will be unlocked if these reforms are passed. However, public pressure for change has diminished. The most intense pressure was during the 2019 protests and the August 2020 Beirut blast. The parties that have dominated Lebanese politics for much of the recent past still won the largest number of seats in May’s parliamentary elections.
The massive increase in the number of people living on aid is one of the issues he wants to tackle. The flow of money earned by relatives working abroad and sent home has also increased, he said, citing a figure of 200,000 immigrants since 2019.
State institutions are increasingly relying on international assistance to maintain minimal standards of living. The World Food Program, in addition to feeding 6 million people, supports healthcare, education, and even police services with monetary and food aid.
Those with money are known as the “fresh dollar class.” They either dine at the finest restaurants or send their children to the best schools, while those who earn local Lebanese pounds can barely pay for their basic needs. 63 per cent of Lebanese said in a study released last December by Gallup that they would leave the country if they could.
Image Credit: AP Photo, Hussein Malla