The hellish scenes threaten to take a turn for the worse.
Lebanese officials and politicians are increasingly raising the specter of internal conflicts. This comes just 31 years after the end of the country’s gruesome 15-year civil war. That black chapter closed with a modus vivendi that critics say systematized government corruption, culminating in a financial collapse that has brought Lebanon to the brink again.
In a statement to CNN this week, Lebanon’s interior minister, Mohammed Fahmi, said there is an increased risk of “security breaches such as explosions and assassination attempts” in the country.
But on the streets of Lebanon, that same political elite is overwhelmingly unpopular. Even ardent supporters of mainstream parties are calling for an overhaul of the country’s denominational power-sharing system, which allocates seats by sectarian grouping. MPs publicly admit their failures, and some of them say they too should resign. Leftist groups, such as the Communist Party, have called for an “escalation” of the popular uprising in the country, which began in October 2019 with the aim of overthrowing the ruling class.
The report pinpoints exactly what that means: a rapid slowdown in economic growth, a reviving currency, small savers bearing the lion’s share of the economic losses, a staggering depletion of the country’s resources, including human capital, and a poverty rate. of more than 50% by 2021.
The disaster could have largely been prevented, says the World Bank. Lebanon’s leaders – to the horror of even some of the most cynical observers – have not put in place policies that could mitigate the financial decline.
The state has done little or nothing to combat poverty. Formal capital controls have not been implemented, almost a year and a half after banks began restricting cash withdrawals to savers on a discretionary basis. That practice caused the capital flight of the super-rich, while the working and middle classes helplessly watched their deposits lose most of their true value.
The country also lacks an official exchange rate platform, leaving the plummeting lira at the mercy of shadowy black markets and the ever-present possibility of currency manipulation.
The economic outlook turns gloomy almost every day. The country’s black market currency has now lost 90% of its value in October 2019. As Lebanon burns up its foreign reserves, Energy Secretary Raymond Ghajar raised the possibility of 24/7 power outages during a press this month, plunging the country into “total darkness”.
The loss of subsidies could be the turning point that threatens to shift Lebanon into Venezuela-like scenarios, exacerbating existing food, fuel and medical shortages.
Families living on a minimum wage – now less than $ 50 a month – won’t be able to afford basic food as inflation is skyrocketing. The already tense security forces, struggling with the frustrations of their newly impoverished constituencies, will face rising crime rates and the possibility of long-dormant political tensions coming to a head.
The only ray of hope is the possibility of an imminent political resolution that will in turn produce an efficient and effective government. But to most of those familiar with the largely miserable track record of the political elite, this seems like a dream. Without leadership, the economy could continue to rage into the unknown.