The Lebanese people are suffering.
A protest in the city of Tripoli turned violent in mid-July when a hand grenade exploded, injuring five soldiers. Such protests have become common in Lebanon due to the dire economic and political situation in the country.
Lebanon’s economic woes were foreshadowed by high levels of public sector debt, illiquidity in the banking sector, a decade of relatively zero growth in the productive economy and widespread political uncertainty, according to the Middle East Institute.
Many Lebanese took to the streets to demand reforms in October 2019. During this turmoil, capital inflows ceased, banks put in place restrictions on withdrawals, and the national currency rapidly depreciated.
If all this was not enough, the COVID-19 pandemic has hit the country hard and a large explosion about a year ago damaged a significant part of the Lebanese capital, Beirut.
As a result of the unrest, inflation skyrocketed, reaching 84.9% in 2020. The World Bank reported in June that Lebanon was probably going through one of the worst financial crises the world has seen since mid-year. from the 1800s.
The current situation in Lebanon is problematic for the regional security interests of the United States. An unstable political climate could allow Hezbollah, an Iranian-backed terrorist group, to gain even more influence in the region. Hezbollah already holds more than half of the seats in parliament in Lebanon and controls two ministries.
Corruption is one of the most serious problems hampering Lebanon’s development, and the European Union has recently enacted sanctions against targeted individuals and entities that undermine democracy and / or the rule of law.
A joint statement by Secretary of State Antony Blinken and Secretary of the Treasury Janet Yellen supported the actions of the European Union. He said: âThe United States welcomes the [European Unionâs] adoption today of a new sanctions regime to promote accountability and reform in Lebanon.
It is not known whether the sanctions will have the desired effect.
The Patrimonial Index of Economic Freedom has noted for years the important problems affecting the Lebanese economy.
The 2021 Economic Freedom Index ranked the Lebanese economy as “largely non-free” for the ninth consecutive year. He underlined how weak political institutions in the country undermined the rule of law and severely limited the ability of individuals to care for themselves and their families.
The fact that many of Lebanon’s problems appear to be structural indicates that a rapid recovery is highly unlikely. While many are unaware of the chaos experienced in Lebanon, the people who live there experience the horrific conditions of what happens when a country collapses, the rule of law is rejected and freedoms are curtailed.
Lebanon must strengthen its political institutions so that the rule of law can be respected, while simultaneously increasing the degree of economic and political freedom enjoyed by the Lebanese people. If the right balance can be struck, many areas of life in Lebanon would improve and political unrest would likely subside.
This piece originally appeared in The Daily Signal