Inside Lebanon’s economic meltdown
Shortages of fuel, medicine and food as world’s worst financial crisis in more than a century closes like a vice on families
Rania Mustafa’s living room recalls a not-so-distant past, when the modest salary of a security guard in Lebanon could buy an air conditioner, plush furniture and a flatscreen television.
But as the country’s economic crisis worsened, she lost her job and watched her savings evaporate. Now she plans to sell her furniture to pay the rent and struggles to afford food, much less electricity or a dentist to fix her 10-year-old daughter’s broken molar.
For dinner on a recent night, lit by a single cellphone, the family shared thin potato sandwiches donated by a neighbour. The girl chewed gingerly on one side of her mouth to avoid her damaged tooth.
“I have no idea how we’ll continue,” said Mustafa, 40, at home in Tripoli, Lebanon’s second-largest city after the capital, Beirut.
Lebanon, a small Mediterranean country still haunted by a 15-year civil war that ended in 1990, is in the throes of a financial collapse that the World Bank has said could rank among the world’s worst since the mid-1800s. It is closing like a vice on families whose money has plummeted in value while the cost of nearly everything has skyrocketed.
Since autumn in 2019, the Lebanese pound has lost 90 per cent of its value, and annual inflation last year was 84.9 per cent. As of June, consumer goods had nearly quadrupled in price over the previous two years, government statistics show. The huge explosion one year ago in the port of Beirut, which killed more than 200 people and left a large swathe of the capital in shambles, only added to the desperation.
On Thursday, Lebanon observed a day of mourning to mark the anniversary of the blast, and government offices and most businesses were closed for the occasion. Large crowds gathered around Beirut to commemorate the day and denounce their Government, which has failed to determine what caused the explosion and who was responsible, much less to hold anyone accountable.
After a moment of silence on the highway overlooking the port, thousands of protesters headed downtown, where some fired fireworks and threw stones near the Parliament at security forces, who responded with volleys of tear gas.
The blast exacerbated the country’s economic crisis, which was long in the making, and little relief is in sight.
Years of corruption and bad policies have left the state deeply in debt and the central bank unable to keep propping up the currency, as it had for decades, because of a drop in foreign cash flows into the country. Now the bottom has fallen out of the economy, leaving shortages of food, fuel and medicine.
All but the wealthiest Lebanese have cut meat from their diets and wait in long lines to fuel their cars, sweating through sweltering summer nights because of extended power cuts.
Lebanon has long endured electricity shortages, a legacy of a state that has failed to ensure basic services. To cover the gaps left by the state power supply, residents rely on privately owned, diesel-powered generators. But the currency collapse has undermined that patchwork system.
As imported fuel has become more expensive, power cuts from the grid have stretched from a few hours a day to as long as 23 hours. So demand for power from generators has risen, along with the cost of the fuel to run them.
The resulting price hike has turned a utility essential for business, health and comfort into a luxury that many families can afford only in limited quantities, if at all.
Across Lebanon, the fuel shortages have led to long lines at gas stations, where drivers wait for hours to buy only a few litres or none at all if the station runs out.
The supply of medicines has also become unreliable. The state is supposed to subsidise imports, but the crisis has strained that system, too.
At a pharmacy in Tripoli, a line stretched from the sidewalk to the cash register, where anxious shoppers sought medicines now scarce after long being easy to obtain, such as painkillers and blood pressure drugs. Other products had disappeared, such as drugs to treat depression.
One shopper, Wafa Khaled, cursed the Government after failing to find insulin for her mother and paying five times as much as she would have two years ago for baby food and seven times as much for formula.
“The best thing for us would be for some foreign country to occupy us so we could have electricity, water and security.”
The crisis could do lasting damage to three sectors that have historically made Lebanon stand out in the Arab world.
In a nation once billed as the Switzerland of the Middle East, the banks are largely insolvent. Education has suffered a blow as teachers and professors seek better opportunities abroad. And health care has deteriorated as reduced salaries have caused an exodus of doctors and nurses.
The emergency ward at the American University of Beirut Medical Centre, among the country’s best, has gone to seven physicians, from 12, and lost more than half of its 65 nurses since July 2020, said Eveline Hitti, the head of the department.
They were driven out by waves of Covid19, declining salaries and the explosion in the Beirut port last year, which flooded the ward with casualties.
“You ask yourself, why should I survive this?” said Rima Jabbour, the head nurse.
Now Covid-19 cases are increasing, as are food poisonings caused by poor refrigeration and alcohol overdoses.
Political leaders have failed to slow the economic meltdown. Officials have hampered the investigation into the port explosion, and a billionaire telecoms tycoon, Najib Mikati, is currently the third politician to try to form a Government since the last Cabinet resigned after the blast.
Mustafa Allouch, the deputy head of the Future Movement, a prominent political party, said, like many other Lebanese, that he feared that the political system, intended to share power between a range of sects, was incapable of addressing the country’s problems.
“I don’t think it will work any more,” he said. “We have to look for another system, but I don’t know what it is.”
His greatest fear was “blind violence” born out of desperation and rage.
“Looting, shooting, assaults on homes and small shops,” he said. “Why it hasn’t happened by now, I don’t know.”
The crisis has hit the poor hardest. Five days a week, scores of people line up for free meals from a charity kitchen in Tripoli, some equipped with cut-off shampoo bottles to carry their food because they cannot afford regular containers.
Robert Ayoub, the project’s head, said demand is rising, donations from inside Lebanon are falling and the newcomers represent a new kind of poor: Soldiers, bank employees and civil servants whose salaries have lost the bulk of their value.
In line on a recent day were a labourer who had walked an hour from home because he could not afford transport; a brick layer whose work had dried up; and Dunia Shehadeh, an unemployed housekeeper who picked up a tub of pasta and lentil soup for her husband and three children.
“This will hardly be enough for them,” she said.
The country’s downward spiral has set off a new wave of migration as Lebanese with foreign passports and marketable skills seek better fortune abroad.
“I can’t live in this place, and I don’t want to live in this place,” said Layal Azzam, 39, before catching a flight to Saudi Arabia from Beirut.
She and her husband had returned to Lebanon from abroad a few years ago and invested US$50,000 ($70,963) in a business. But she said that it had failed and that she worried they
would struggle to find care if their children got sick.
“There’s no electricity. They could cut the water. Prices are high. Even if someone sends you money from abroad, it doesn’t last,” she said. “There are too many
crises.”