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Lebanon in Crisis: A Tale of Two Coronas

17 Jun 2021
By Dr Vanessa Newby
Streets of Lebanon after Beruit Blast in 2020, photographer Hassan Ammar, sourced from google images,

The good news for the Lebanese people right now is that vaccination rates are rising and COVID-19 infections and deaths are falling. This good news is needed, with Lebanon in the grip of economic and financial crisis.

The World Bank recently declared, “The Lebanon financial and economic crisis is likely to rank in the top 10, possibly top three, most severe crises episodes globally since the mid-nineteenth century.” The cost of living in Lebanon has risen five times since 2018 and the percentage of those living below the poverty line has risen to around 55 percent. The gap between the haves and have nots is widening, with around 10 percent of the population controlling 70 percent of the country’s wealth.

Those lucky enough to hold bank accounts in US dollars are still able to maintain a decent standard of living. This is due to a convenient clause in the Lebanese banking laws which enable Lebanese to access their US dollars using their bank cards, even though they can’t withdraw them in cash.  This phenomenon is known as “Lollars,” defined in popular media as “a deposit denominated in US dollars in the Lebanese banking system. It is a nominal balance stuck or frozen in the Lebanese banks, with currency value simply as a computer entry.” Meanwhile, the rest are left to fight for rapidly diminishing basic goods in local supermarkets.

Perhaps nothing symbolises this socio-economic divide more than the sunny town of Batroun nestled by the Mediterranean Sea. Always a haven for Beirutis wishing to escape the sweaty, fume-laden Beirut summers, locals tell me this year the resort town has exploded into a Mecca of beach clubs and ordinarily Beirut-based restaurants catering to the haves: those with lollars looking for a good time and unable to travel because of COVID-19 restrictions. This is not an innovation. In bygone years, Beirut restaurants would set up summer annexes in mountain resort towns like Broumana where the Lebanese flocked to enjoy the cooler evenings and crisp mountain air.  In the current crisis, while hotels and boutique guest houses have had to cut their rates, they are managing to survive owing to the surge in local tourism which has replaced the international tourism, which soared until recently.

The Lebanese capacity for ingenuity in the face of crisis has always been remarkable. For example, a website has already sprung up selling Lollar memorabilia.  But the current crisis leaves one wondering if Lebanon has at last run out of luck, or whether it can be saved from its current freefall into extreme poverty and the violence that could potentially follow.

The situation as it stands now is that no financial rescue package is forthcoming.  The international community has declared Lebanon persona non grata for any kind of grant until a new government is formed and a clear plan of action is presented on how to resolve the current situation. The World Bank and the French government recently delivered blistering messages on the need for lawmakers to put a stop to the endemic corruption, tackle the current challenges, and re-establish a working government.

All this comes on top of a hellish eighteen months which included the Beirut Blast, which is estimated to have killed 178 people, left 6,500 people injured, and 300,000 people homeless. Months of lockdown and the coronavirus meant thousands lost their source of income. An electricity crisis erupted recently as Karpowership, the Turkish company that owns the generator ships parked just off the Sidon highway, recently demanded payment in full after 18 months of arrears and shut down.  The situation is now so dire that many homes receive less than two hours of power a day.  Only a small portion of the population can now afford to pay for private generators to make up the gap. In recent days, Iraq has come forward with an oil for medical care deal to help prevent the entire country from plunging into darkness.

The recent Palestine-Israel clashes briefly raised the spectre of an additional security threat when several rockets were fired into northern Israel from Lebanon in May.  However, these were found to be one-offs and not part of a larger plan to escalate regional tensions. Both states are currently in a state of political flux, and with the Syrian war not yet firmly resolved, it’s unlikely either party has the taste for a confrontation at this juncture.

Meanwhile, the Lebanese continue to survive under the harshest conditions faced since the civil war, with some still managing to enjoy life.  However, even the “haves” of Lebanon are unable to escape the reality of global shipping shortages and the economic and financial crisis. While COVID-19 cases may be going down, as summer hits, it’s no longer possible to find a case of Corona beer anywhere in Lebanon.

Dr Vanessa Newby is an Assistant Professor at Leiden University in the Netherlands. Her research interests include peacekeeping, gender and security, and the Middle East. She has articles in several international peer reviewed journals and has published two books: Peacekeeping in South Lebanon: Credibility and Local Cooperation, and Follow the Arabic Road: Going Off-Track in the Middle East.

This article is published under a Creative Commons License and may be republished with attribution.