Lebanon’s crisis one of the worst in 150 years: WB
Lebanon’s severe economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years, the World Bank said in a report released on Tuesday.
The World Bank said that since late 2019, Lebanon has been facing compounded challenges, including its largest peace-time economic and financial crisis, the spread of coronavirus and a massive blast at Beirut’s port last year that is considered as one of the largest nonnuclear explosions in history.
The crisis has worsened in recent months amid a paralysing power struggle between the president and prime ministerdesignate that has delayed the formation of a new government,
The cabinet of outgoing prime minister Hassan Diab resigned days after the August 4 blast, and the country has been without a fully functioning government since.
The explosion in the Port of Beirut killed at least 211 people, wounded more than 6,000 and damaged entire neighbourhoods.
In the face of these colossal challenges, continuous policy inaction and the absence of a fully functioning government threaten already dire socio-economic conditions and a fragile social peace with no clear turning point in the horizon, the World Bank report said.
“The economic and financial crisis is likely to rank in the top 10, possibly top 3, most severe crises episodes globally since the mid-nineteenth century,” it added.
The report said the country’s gross domestic product is projected to contract 9.5% in 2021, after shrinking by 20.3% in 2020 and 6.7% the year before. Lebanon’s gross domestic product plummeted from close to $55 billion in 2018 to an estimated $33 billion in 2020, while GDP per capita fell by around 40% in dollar terms, the report said.
“Such a brutal contraction is usually associated with conflicts or wars,” the World Bank said.
The report was released two days before the World Bank’s vice-president for the Middle East and North Africa, Ferid Belhaj, and Merza Hussain Hasan, its executive director, were set to arrive in Lebanon to meet with Lebanese officials and urge them to address the crisis “with urgency,” a World Bank spokeswoman said.