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John Solomu
Nicosia [Cyprus] September 12 (ANI): Lebanon is facing a total economic collapse and is almost on the brink economically, politically and socially. While it cannot yet be described as a failed state, it is on the verge of becoming one.
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A failed state can be described as one that cannot protect its borders, cannot manage everyone on its territory, cannot provide basic utilities and services, and cannot monopolize the use of force or the police itself.
Lebanon comes very close to meeting all these characteristics, as powerful and well-armed groups – such as the Iranian-backed Hezbollah – act as a state in parts of the country, arresting and imprisoning citizens, while the government is unable to police the country and provide Only basic services such as water and electricity are provided for three to four hours a day.
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The Lebanese currency – the Lebanese pound – has lost more than 95% of its value compared to pre-crisis levels, and now 35.300 Lebanese pounds are equivalent to one dollar, whereas in the not-so-distant past people used the dollar and the Lebanese pound interchangeably.
A series of events brought Lebanon to the brink of a cliff. The Syrian civil war has severely hit Lebanese exports to Arab countries, with more than a million Syrian refugees seeking asylum in Lebanon. Then the coronavirus devastated its tourism industry, while the central bank disastrously imposed an unrealistic exchange rate and spent hundreds of millions of dollars propping up the Lebanese pound.
Public services such as electricity, education and health care have been severely cut. By contrast, the state stopped subsidizing essential medicines, leading to the premature deaths of dozens of people who could not afford them.
As if that wasn’t enough, Lebanese banks only allow depositors to withdraw a fraction of their deposits, and people line up at ATMs every day hoping to withdraw some money.
According to a World Bank report, “Lebanon’s real GDP is expected to fall by 10.5% in 2021 against the backdrop of a 21.4% contraction in 2020, as policymakers still have not agreed on a plan to address the country’s economic collapse. Development Model …Amid extremely high uncertainty, the country’s real GDP is expected to contract by a further 6.5% in 2022. Lebanon’s essential services collapsed sharply, driven by the depletion of foreign reserves.
According to the World Bank, Lebanon is facing one of the world’s worst economic and financial crises in the past 150 years. Estimates now suggest that 75% of the population is struggling to put food on the table.
The plight of the Lebanese people is crystal clear in Gallup’s 2021 Negative Experiences Index, a composite measure of people’s everyday experiences of sadness, stress, worry, anger and physical pain.
The Lebanese was the second unhappier person in the world with a score of 58, behind only the Afghans with a score of 59. They were followed by Iraqis with 51 points, Sierra Leoneans with 50 points, Jordanians with 48 points and Turks with 46 points.
Political instability and government inefficiency have become the norm in Lebanon, but the country’s recent economic collapse is worse than any struggle since the civil war, Gallup’s index report noted. Quality of life has deteriorated so badly that 63% of Lebanese adults say they would like to leave the country permanently if they could.
In a report published last May, Olivier de Schutter, the UN Special Rapporteur on extreme poverty and human rights, accused Lebanon’s political and financial leaders of disruptive behavior for driving a large portion of the country’s population into poverty, adding: “Impunity, corruption, structural inequality have been incorporated into a corrupt political and economic system designed to disappoint people at the bottom, but it doesn’t have to be… For now, it’s a way to protect the rich while leaving A system of people where poor families fend for themselves.”
In March 2020, the Prime Minister announced that the country would not be able to repay $1.2 billion owed to creditors on time.
A few months later, in August 2020, a devastating explosion in Beirut’s port devastated much of the city and killed at least 200 people.
Currently, Lebanon is desperately seeking a $3 billion loan to repay a foreign debt that has soared to 170% of its gross domestic product, and has reached a draft agreement with the International Monetary Fund, but only if the government implements reforms that go far.
These include an overhaul of the banking sector, an investigation into the disastrous management of the central bank, economic reforms, strong regulation and oversight, and securing loan repayments.
The country’s sectarian political system is unlikely to agree to the necessary reforms, as its main focus is to preserve the privileges of the country’s elite.
In addition, there are two people with enormous power in the country who are unlikely to accept reforms. One is Hezbollah leader Hassan Nasrallah and the other is central bank governor Riad Salameh. In the past, Nasrallah and Salameh have stopped any attempts to reform the system and have shown that they are the ones who are really calling the shots in Lebanon, not the elected government.
As Haaretz reporter Zvi Bar’ El pointed out, “Two figures are vying for the title of ‘true ruler of Lebanon’. One is Hezbollah Secretary-General Hassan Nasrallah and the other is central Lebanon Governor Riyad Salame. Bank… If Nasrallah is seen as the man who controls Lebanese politics, decides the country’s internal and foreign policy, decides if and when Lebanon goes to war – then Salame controls the economy of Lebanon.”
If these two figures do not change their minds and agree to save the country, Lebanon will surely be a failed state. (ANI)
(This is an unedited and auto-generated story from the Syndicated News feed, the body of the content may not have been modified or edited by LatestLY staff)
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