The MED This Week newsletter provides expert analysis and informed insights on the most significant developments in the MENA region, bringing together unique opinions on the topic and reliable foresight on future scenarios. Today, we focus on Lebanon, where an unprecedented economic crisis is putting the population in dire living conditions. Meanwhile, a year after the explosion at Beirut’s port, the political class has failed to form a new government.
For the past two years, while Lebanon was dealing with a deep economic crisis, a deadly pandemic, and a ruinous explosion at Beirut port, its rulers have failed to solve their ongoing power struggle and, if anything, have made things worse.
In October 2019, thousands of protestors swept the country demanding an end to sectarian politics, incessant backdoor dealing, and corruption. None of the demands have been met thus far.
The Beirut port blast that claimed 178 lives, left over 6,500 injured and 300,000 homeless last August –the largest non-nuclear deflagration in history- was an avoidable tragedy. It was also virtually impossible to hide. The collapse of the Lebanese financial system could have also been avoided. It was, however, less visible. A series of measures set by the Lebanese Central Bank (Banque du Liban, BDL) and the government swept the inevitable default under a rug of financial engineering and the lira-to-dollar peg.
During the second week of a national vaccine rollout, 16 Lebanese lawmakers and several staff members were immunized with the BioNTech-Pfizer coronavirus vaccines at the Lebanese parliament in Beirut. Days earlier, President Michel Aoun, his wife, and ten staff members also got vaccinated.
The recent revelations triggered angry accusations of queue-jumping. The political elite were among the first to get less than 30,000 vaccines administered in Lebanon, home to more than 6 million people, including some 1.5 million refugees.
The Rome MED This Week newsletter provides expert analysis and informed comments on the MENA region's most significant issues and trends. Today, we turn the spotlight on Lebanon, where citizens are taking to the streets once again, protesting against the economic crisis and the political impasse.
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Pivotal for the regional balance of the Levant, and an integral part of the Arab world, Lebanon is currently facing a severe political and socio-economic crisis, which was further exacerbated by August 4th explosion. The advent of the COVID-19 pandemic added a new layer of complexity for a country that is already dealing with multi-faceted challenges and that over time has become s a sanctuary for refugees fleeing adjacent conflicts.
For almost 18 months, Lebanon has been beset by a series of disjointed and severe crises: economic depression, street protests, the unstoppable coronavirus and an explosion that damaged half of Beirut.
Inequality fosters instability. This is especially true when it overlaps with a growing sense of injustice, expanding corruption, and declining distrust in political leaders, parties, and institutions.
The Covid-19 pandemic and the measures associated with its containment have negatively impacted economic growth, capital inflows, and productivity across the world. The ripple effects have hit hardest the most vulnerable in our societies.
With the economy faltering and discontent rising, the coronavirus pandemic could hardly have been better timed for Lebanon’s embattled Hezbollah.
A public health-mandated lockdown freed the squares of protesters, halting a civil movement that has continued unabated since October and giving the Iran-backed group an opportunity to repair its tarnished image. For a short while, the virus provided the illusion that a newly found common enemy could stir things back towards the post-Civil War sectarian order.
As Lebanon descended into its long-overdue economic and political crisis on the eve of October 17, 2019, the country’s confessional model and its rentier economy were breathing their last.
At the beginning of March, Lebanon's Prime Minister Hassan Diab officially confirmed that Lebanon would not pay a $1.2 billion Eurobond due to mature that same month. Lebanon’s default comes after an unprecedented wave of protests has caused growing political instability and economic uncertainty since last October.
Lebanon’s sovereign default comes at a heavy price for Hezbollah. This is not simply because of Hezbollah’s powerful role within the government that failed to repay a $1.2 bn bond on 10 March 2020. This is mainly because Hezbollah’s rivals are likely to use the current financial crisis to impose an external authority over Lebanon and increase pressure on the ‘Party of God’ to disband its armed wing.