The Lebanese crisis has gone from bad to worse. But is anyone listening?

In the midst of a pandemic that has torn the world off its axis, Lebanon’s precipitous decline has not received the attention it deserves given the country’s strategic importance.

Bordering Syria to the north and east, and Israel to the south, Lebanon occupies a critical space in the eastern Mediterranean. Its collapse could spread to surrounding areas.

The country is sagging under the weight of a large refugee population from neighboring Syria and a permanent presence of Palestinian refugees. It is certainly a “state of crisis”, which the London School of Economics defines as “a state of acute stress”.

The question is whether the “crisis state” becomes, for all intents and purposes, a “failed state” as defined by the LSE of a state that “can no longer perform its basic security and safety functions. development “.

Lebanon, which took more than a year to form a new government after an ammonium nitrate explosion ravaged its port area and forced the resignation of the then government, is again on the brink.

Fuel shortages, which shut down its major power plants this week, have drawn the world’s attention to Lebanon’s continued slide into outright ruin.

An ammonium nitrate explosion ravaged the port of Beirut in August 2020, killing at least 216 people.
Hassan Ammar / AP / AAP

The emergence last month of a new prime minister after months of wrangling over power-sharing among the country’s faith groups has hardly sparked confidence in the new government’s ability to bring Lebanon’s problems under control.

The fuel shortages caused by a currency crisis in which the country is effectively bankrupt are just one of a series of cascading problems that have prompted the World Bank to describe the situation as one of the 10 most important crises. most serious in the world since the middle of the 19th century “.

The World Bank speculates that the Lebanese crisis could well appear in the “top 3”. This includes the Great Depression of the 1930s.

In a report released in June by its Beirut office before the new government was formed, the bank said Lebanon was facing

[…] colossal challenges [that] threaten already dire socio-economic conditions and fragile social peace with no clear turning point on the horizon.

The installation of Najib Mikati, a billionaire telecommunications tycoon, as prime minister has coincided with a further decline in Lebanon’s fortunes to the point that its ability to stop its fall now depends on outside aid. But that’s the problem.

New Lebanese Prime Minister Najib Mikati faces several critical and cascading issues in his country.
Bilal Hussein / AP / AAP

Potential international donors, led by France with its traditional ties to the country, are fed up with Lebanon’s inability to tidy up its house and its rampant corruption, and fear that foreign aid will do the trick. that to strengthen the grip of the radical Shiite Hezbollah on the country.

With the support of Iran, Hezbollah presents itself as the savior of Lebanon. Fuel supplied by Iran was shipped to Lebanon by truck from the Syrian port of Baniyas to circumvent US sanctions.

Since its emergence at the height of the Lebanese civil war, which lasted from 1975 to 1990, Hezbollah has gradually strengthened its position as a dominant player in the country’s complex political makeup.

Read more:
Beirut explosion still a heartbreak for a country already on the brink

This divides power between Christian and Muslim faith groups under a power-sharing agreement brokered by France in 1943. An agreement brokered by Saudi Arabia, known as the Ta’if accord to put end of the civil war, recognized the role of Hezbollah.

Hezbollah is designated as a terrorist organization by the United States and other countries.

In the three decades that have passed since Taif, Lebanon has recovered under various administrations only to back down again, and now in a disastrous manner.

The reasonable question in all of this, given its intense internal problems superimposed on a clearly outdated governance structure, is whether Lebanon is ungovernable in its current form and at risk of breaking up.

In an assessment of Lebanon’s status as a potential failed state, the Council on Foreign Relations proposed the following criteria. These included the 75% (at least) of Lebanese living below the poverty line, the 1.7 million refugees whose situation is even worse than that of Lebanese nationals, the duration of the power cuts of 22 hours per day and the public debt of 175% of GDP.

Since that assessment in September of last year, the situation has worsened, if at all possible. The Lebanese pound is virtually worthless, having lost 90% of its value against the dollar in recent years. The country is in the throes of hyperinflation with price increases of more than 400% putting basic foodstuffs beyond the reach of the greatest number. The Lebanese economy contracted by more than 20% in 2020.

A third of the Lebanese now live in “extreme poverty”.
Hassan Ammar / AP / AAP

A third of the Lebanese live in “extreme poverty”, according to the United Nations.

The enormous burden of refugees is not the least of Lebanon’s problems. The United Nations High Commissioner for Refugees (UNHCR) reports that the country has 865,530 registered Syrian refugees among around 1.5 Syrians in Lebanon.

In addition to the Syrian presence, there are some 190,000 Palestinians in Lebanon, many of them in refugee camps. Palestinians are effectively stateless and even more vulnerable to a deteriorating economy than impoverished Lebanese.

Lebanon’s population, including refugees, is around 6.8 million.

In addition to Lebanon’s problems, there is an acute currency crisis. It is for all intents and purposes bankrupt, and therefore unable to continue to subsidize imports of vital commodities, including food and medicine.

This has pushed prices through the roof.

The besieged Mikati put it bluntly after taking the oath.

Where are we going to find the money to subsidize? We are dry. We have no reserves or money that allow us to help.

Meanwhile, billions of dollars poured out of the country as wealthy Lebanese and corrupt officials sought to secure their assets amid the collapse of the country’s banking system.

The banks have become insolvent. Thousands of Lebanese have lost their savings. In the midst of this, they would have reason to be dismayed by the revelations in the leaked Pandora Papers that prominent figures in government and bureaucracy had siphoned funds out of the country for years.

Read more:
Pandora Papers: While Ordinary Lebanese Suffer, Elite Secretly Drains Billions

Among those identified as having transferred funds abroad is Riad Salameh, longtime governor of the central bank of Lebanon. He is the sole director of a British Virgin Islands company created in 2007.

Salameh is under investigation in Switzerland and France for money laundering and embezzlement. He was accused in local Lebanese media of transferring funds abroad in violation of the regulations. He denies having made such transfers.

However, what is beyond doubt is that Lebanon is one of the most corrupt jurisdictions in the world. This contributes to his inability to tidy up his house.

In the Global Corruption Perceptions Index, recognized as the most credible assessment of corrupt practices in the world, Lebanon ranks 137 on a list of 180 countries along with Russia, Papua New Guinea and Democratic Republic of Congo.

On the Fragile States Index compiled by the Peace Fund in collaboration with Foreign Policy magazine, Lebanon ranked 34th in 2020, up from 40 in 2019. Given its accelerated decline over the past 12 months, its 2021 rating may well rival that of failing states. like Yemen, Somalia and Syria.

If Lebanon is not a failed state, it certainly is one in the making. This is barring a substantial intervention from reluctant international lending institutions and Western governments concerned about its subsequent slide into an Iran-led “axis of resistance”.

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