Lebanon’s economic woes made worse by the pandemic

Lebanon’s economic situation was dire even before the pandemic hit. Covid-19 has simply killed a shot at social recovery and economic revival for a country that has been mired in sectarian struggles for decades. Then there were civil wars. Many had hoped the new government of technocrats would put the country on a road to recovery, setting aside years of power struggles between different sectarian factions that had made governance impossible. Hezbollah, a militia, seen by many as a terror group exerted excessive influence on the politics of the country that was lurching from one civil strife to another. Investors had jumped ship, the Lebanese pound was near worthless, and hope was lost. Now, with Covid-19 in their midst, the Lebanese people are staring at poverty. The government has managed to contain the pandemic to a large extent but the fiscal crisis is hitting home. Families are running out of money as banks are closed, or there are weekly limits set for withdrawals. The Lebanese had protested peacefully on the streets for a change to the status quo and got a new government led by Prime Minister Hassan Diab.

In February the government embarked on economic reforms and promised to crack down on tax evaders; it said it would make the country attractive to investors again. A

17-page policy statement was released in a bid to stave off economic collapse. But the arrival of the coronavirus in the country has forced the government to focus on health, a task for which it deserves plaudits. The country has managed to contain the spread of the virus. Only 717 cases have been reported so far. But this success has been shadowed by a deeper problem that is driving people into poverty. There are food shortages and people are unable to afford essentials to run households. The crisis has been compounded with the prime minister blaming the central bank for failing to act to avoid economic collapse. Businesses continue to avoid Lebanon, unemployment is high, people are desperate, and they have lost patience. Two nights of rioting show their desperation. Reports said 75 per cent of the people need aid. The current lockdown could tip the country over the edge and there is little indication that the crisis will pass soon. A health pandemic was the last thing Lebanon needed just as it was putting together a political combination and attempting to fix its economy. The global community and institutions should immediately earmark emergency funds to bail out Lebanon. A delay would lead to another social and political crisis.

There are food shortages and people are unable to afford essentials to run households. The crisis has been compounded with the prime minister blaming the central bank for failing to act to avoid economic collapse.