Protests Return to Lebanon as Economy Continues to Crumble
Mass protests are once again shaking Lebanon, resuming after rallies ended in October following the installment of a new government. Activists are upset with what they allege is a corrupt government responsible for the state’s tanking economy and are demanding a transitional government and new elections.
Lebanon’s Economy Slips Away
Demonstrations have impacted not only Lebanon, but also World Food Program shipments to Syria. Activists blocked a road which delivery trucks use to pass through with humanitarian aid.
The brutal decline of the Lebanese pound (LBP) against the US dollar has sent the cost of living soaring. On Friday, $1 USD equaled 6,000 LBP, a 300% increase over the past 23 years. Since October, the pound has lost 40% of its value, the National Interest reported, causing trouble in the state that is highly dependent upon imports.
The World Bank estimates the nation’s poverty rate will be 50% this year, underscoring just how bad the situation has become. After October’s demonstrations, President Michel Aoun’s solution was to sack Prime Minister Saad Hariri, with the government choosing Hassan Diab as his successor.
The Lebanese have given Diab three months now to prove himself, but are not satisfied with the lack of results. Diab now serves as the target for the protesters’ blame. When he took office with the support of a Hezbollah-backed coalition, Diab assured the Lebanese that he would introduce reforms. Those promises have never z.
Lebanon’s situation reminds many of the days leading up to the 1975 civil war, as BBC reported. Unemployment sits at 35% and the state is in default on its national debt, which totals 170% of its GDP.
Diab Blames Opponents
Beirut is in panic mode as it searches for solutions. On Friday, it announced the central bank will pour dollars into the economy this week, Reuters reported. Already, banks have locked people out of dollar accounts and set low withdrawal limits to prevent bank runs.
Diab also implicated unspecified political opponents, saying they are essentially staging a “coup.”
“The state and the people are being subjected to blackmail,” he said. “Some have tried to exploit the situation again …They have thrown lies and rumors, have contributed to deepening the Lebanese pound crisis, have caused a major crisis and have pushed people onto the streets.”
However it might not be Diab’s political foes, who he refrained from naming, who are blackmailing the economy into failure, but rather Hezbollah. Its top ranks have been filled with self-serving officials who are unwilling to do anything to help the Lebanese economy.
“Hezbollah is a big obstacle in the rescuing of Lebanon and is a big contributor to where we have reached in Lebanon—Hezbollah’s own personal involvement in corruption,” said Professor Habib Malik of the Lebanese American University. “The mere fact that they actually protect and cover up for well-known corrupt individuals and groups, that’s enough to implicate them in the whole corruption thing.”
As long as Hezbollah is calling the shots in Beirut, the people will suffer. It simply does not have their interests at heart and cannot be trusted to make sound economic decisions. After all, this was the group that backed Diab’s appointment as premier and absolutely nothing has materialized from it that would help the economy.
IMF Could Change Corrupt Ways
The EU has helped keep Beirut afloat with 580 million euros since 2011, but that could change soon as the government shows no signs of trying to cure the problem.
Iran was previously a go-to financier, but it cannot even afford to pay its own proxy militias in Iraq anymore, so Beirut is unlikely to find help from it. The only solid chance Lebanon has is accepting assistance from the International Monetary Fund.
Previously, Hezbollah rejected help from the group, but this time it has no choice. The IMF has conditions, however, that Beirut crackdown on fraud and corruption, and the government would be accountable to IMF oversight.
The IMF bailout might be the first chance the Lebanese people have at becoming free from Hezbollah’s grip. It won’t be free to abuse its position of power to enrich itself and money might actually go to the right causes.
However, nothing is finalized yet, as talks with the IMF are still taking place. Until Beirut secures funding, protests will continue as the Lebanese run out of options. Their frustrations are understandably high and some have become violent in expressing them.
The question now is not how much further the economy can collapse, but how long Aoun and Diab can maintain their hold on power while the state is consumed by unrest. There are few peaceful solutions at the government’s disposal to placate the people, and fewer still that would lead to economic recovery.
If Diab was dismissed like his predecessor, what would happen next? The corrupt bureaucrats would simply appoint another premier like him.
The only practical solution is for Beirut politicians to end the practice of corruption before it is too late. The IMF may be that way forward as Lebanon is forced to change the way it operates. In truth, that is the only option now for Aoun and Diab before protesters run them out of town.