Lebanon stands on the brink of economic ruin

▶ The country was already embroiled in financial turmoil before the October 17 uprising

It was a financial crisis and unpopular taxes that prompted hundreds of thousands of Lebanese to pour onto the streets nearly four weeks ago, demanding a better life. And it is the worsening state of an already stricken economy that is bringing Lebanon to a standstill. Fuel shortages are rife after petrol stations across the country remained closed, with owners complaining they cannot buy enough fuel because of restricted access to US dollars. Together with wheat and medical shortages, no government, and fears among citizens of being unable to access their savings, Lebanon stands on the brink of economic disaster.

A fortnight ago, Lebanese Prime Minister Saad Hariri and his entire government resigned, saying they had reached an impasse. Yet there has still been no resolution or clear way forward from the ruling class, who have failed to appoint replacements or come up with meaningful solutions. Basic services, from a reliable supply of drinking water to round-theclock electricity, are still a pipe dream in a nation ravaged by decades of corruption.

Drivers have been stranded without fuel this week as numerous petrol stations stayed closed or rationed their sales. The shortage of foreign currency has only increased the burden on citizens as the owners of fuel stations have shunted the extra costs onto customers by illegally hiking the price of fuel by 25 per cent. That has been compounded by limited food supplies after Lebanese millers, who buy wheat from overseas, warned of a bread shortage due to the crunch on the dollar. Then on Thursday, Lebanon’s economy took another hit when rating agency Moody’s downgraded its three largest banks to junk status, citing the lack of credit worthiness of the government. In the latest blow, credit card company American Express told customers it is reducing their credit limits. This is an untenable situation, punishing ordinary citizens.

Nearly three decades after the end of the 15-year civil war, the country’s infrastructure remains woefully inadequate. There are power cuts of up to 20 hours a day and an unreliable water supply. Lebanon has even had to buy electricity from war-torn neighbouring Syria, a shameful indication of government failures. Yet $11 billion in donor aid, pledged at the Cedre international development conference in Paris last year, remains untouched because Beirut is still to carry out the reforms, including lowering its deficit and funding infrastructure projects, to unlock it. Faced with the third-highest public debt in the world, the country was already entrenched in severe financial turmoil even before the October 17 uprising.

Lebanon has much to offer, from a stunning landscape to a vibrant culture. It is to the detriment of its citizens that that potential is being squandered. The prevailing conditions cannot be allowed to fester. A situation in which citizens cannot fill their cars, or buy bread or medicine, is indicative of a failed state. Lebanon needs strong leadership to steer it through these troubled times and find a long-term strategy for the revival of a country that has all but collapsed.