Lebanon: specter of civil conflict looms as economic collapse gives way to violence

Lebanon: specter of civil conflict looms as economic collapse gives way to violence

The hellish scenes threaten to deteriorate.

Increasingly, Lebanese officials and politicians raise the specter of internal conflict. This comes barely 31 years after the end of the terrible 15-year civil war in the country. This dark chapter was closed with a modus vivendi which, according to critics, systematized government corruption, culminating in a financial collapse that brought Lebanon, once again, to the brink of collapse.

In a statement to CNN this week, acting Lebanese Interior Minister Mohammed Fahmi said there was an increased likelihood of “security breaches such as explosions and assassination attempts” in the region. country.

This fear is echoed by many high-level politicians who cite conversations with intelligence agents. In a televised speech Wednesday, Iranian-backed Hezbollah Secretary General Hassan Nasrallah also warned of civil war, making a grim prognosis for the security situation and calling on the country’s fractured political class to come together to thwart the financial collapse.

But in the streets of Lebanon, this same political elite is extremely unpopular. Even staunch supporters of the big parties are calling for an overhaul of the country’s religious power-sharing system, which allocates seats by sectarian group. MPs publicly admit their failures and some of them say they too should resign. Left-wing groups, such as the Communist Party, have called for an “escalation” of the country’s popular uprising, which began in October 2019 with the aim of toppling the ruling class.

But there is little to no agreement on the future of governance in the country. A cabinet formation process has been deadlocked for four months due to disputes between Prime Minister designate Saad Hariri and President Michel Aoun. Hariri vowed that his future government would stop Lebanon’s collapse and re-engage with the International Monetary Fund (IMF), which last year halted negotiations with the government on a bailout.

But Hariri faces the daunting task of initiating economic reforms at a time when his popular tenure has shrunk considerably. The fledgling parties that have sprung up in recent years to replace the elite also appear to lack the political clout needed to dislodge the status quo.

This leadership crisis has exacerbated Lebanon’s financial woes on a dramatic scale. In its fall 2020 report, the World Bank called Lebanon’s economic depression “deliberate.”

The report details exactly what this means: a rapid deceleration in economic growth, a declining currency, small depositors who take the lion’s share of the economic losses, a startling depletion of the country’s resources, including its human capital, and a poverty rate exceeding 50% in 2021..

A woman and her daughter beg on Beirut's Hamra shopping street on March 16.  Tuesday March 16, 2021. More than half of the population now lives in poverty.
An army officer pushes back protesters who tried to break down a bank door during a protest demanding that local banks allow people to withdraw their money on February 26.

The disaster could have been largely avoided, according to the World Bank. Lebanese leaders have – much to the shock of even some of the most cynical observers – avoided enacting policies that would mitigate the financial decline.

The state has done little or nothing to reduce poverty. Official capital controls have not been implemented, nearly a year and a half after banks began limiting cash withdrawals from depositors on a discretionary basis. This practice caused the flight of capital from the super-rich, while the working and middle classes helplessly watched their deposits lose most of their real value.

The country also lacks an official exchange rate platform, leaving the plummeting lira at the mercy of dark black markets and the ever-present possibility of currency manipulation.

Buildings loom in the dark during a power outage in Beirut on July 5, 2020.

The economic outlook darkens almost daily. The country’s black market currency has now lost 90% of its October 2019 value. As Lebanon burns its foreign exchange reserves, interim Energy Minister Raymond Ghajar has raised the possibility of power cuts. 24/7 electricity during a squeeze this month, plunging the country into “total darkness”.

Subsidies for food, fuel and medicine that served as the nation’s lifeboat may also soon be phased out. This week, Acting Prime Minister Hassan Diab said Lebanon would cut these subsidies and added that most of them could only be maintained until June.

The loss of subsidies could be the watershed moment that threatens to tip Lebanon into similar scenarios to Venezuela, exacerbating food, fuel and medicine shortages.

Families living on minimum wages – now less than $ 50 a month – will not be able to afford basic groceries as inflation soars. The already strained security forces, which must contend with the frustrations of its newly impoverished base, will face rising crime rates and the possibility of long-standing political tensions escalating.

The only silver lining is the possibility of an imminent political resolution which, in turn, produces effective and efficient government. But for most of those familiar with the largely miserable backgrounds of the political elite, that seems like a pipe dream. Without leadership, the economy could continue to rush into the unknown.


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