Lebanese, Syrians Face Starvation
Financial crises threaten wheat imports, electricity generation
Amid a suffocating economy, tens of thousands of Lebanese have lost their jobs or at least part of their income. They have been taking to the streets since October 17, blaming the political class for corruption and the inability to find solutions to the successive crises that have devastated their living conditions.
Nearly half of the population lives below the poverty line, according to the World Bank, and economic experts say the members of the middle class are increasingly affected.
The estimated population of 5.9 million includes some 1.5 million Syrian refugees, meaning Lebanon has by far the largest proportion of refugees in the world: one in every four residents.
Moreover, Beirut may soon be unable to provide sufficient wheat, electricity or internet services.
Marwan Iskandar, chief economic commentator for Beirut’s An-Nahar newspaper, told The Media Line that the Central Bank of Lebanon supports imports of petroleum, pharmaceuticals and wheat products, using its shrinking monetary reserves.
“There will be no electricity in six months, and there will be hunger in the country as well,” he said.
“Recently, the Lebanese deputy prime minister, a former head of a communications company in Saudi Arabia, said if we aren’t able to generate electricity, there will be no internet services in Lebanon; we will be disconnected from the outside world,” Iskandar added.
He explained that while many Lebanese have money in banks, they could only withdraw small amounts. For instance, if someone has $300,000, they cannot get more than $3,000 a week, “and banks will pay these amounts in Lebanese pounds, not to mention that banks deduct fees they have no right to deduct. For each $1,000, banks take $5 or sometimes more.”
Moreover, Iskandar said that citizens’ private deposits had been drained. Lebanese banks currently had between $135 billion and 130 billion on deposit, he said, and $25 billion of that belonged to Syrians, which left $105 billion, but $70 billion of that belonged to Shi’ites.
“Now because of the sectarian system in Lebanon, if they move to confiscate the citizens’ deposits to cover the state’s expenses, they [the banks] won’t be able to touch the Shi’ites’ money because of their weight in the ruling system,” he said.
“That leaves $35 billion, and the banks already don’t have these amounts on hand, as they lent the state about $90 billion.”
Iskandar said that in the past seven months, about 60,000 Lebanese lost their jobs, while the 350,000 employed by the state were protected because of the sectarian system and the rule of political parties. “The country is in a very bad condition that’s not easy to exit from. So far, the majority of Lebanese can buy bread, but Beirut’s huge financial crisis is directly affecting 30% of its citizens,” he said.
However on Saturday, the Lebanese were surprised by distributors’ decision to stop delivering bread to shops, which coincided with a massive drop in the value of the local currency vis-à-vis the dollar. This led to huge lines outside the bread ovens.
Mahsen Mursel, a Beirut-based journalist who specializes in economic affairs, told The Media Line that the purchasing power of the Lebanese pound, also called the lira, had eroded by 80%, and its value against the US dollar had dropped by 370%. “The rate of the Lebanese pound to one dollar has become 7,000 liras,” she said.
Mursel said this had led to inflation that exceeded 100% for some consumer goods. The price of “some commodities increased by 19%, others by 300% and 400%, while salaries and wages have decreased. When the exchange rate of the Lebanese pound was 1,500 liras per dollar, the average citizen used to make $400 [a month]. Now with the new exchange rate, they get only $96.”
She added that the Beirut metropolitan area had 1.1 million residents living under the poverty line and unable to pay for their food. “The unemployment rate has reached high levels; we have 1.2 million citizens without jobs.”
Mursel clarified that Lebanon’s economy was “74% internationalized,” where most consumer goods were imported, as were petroleum and wheat. “We are facing catastrophic living conditions, which will necessarily lead to a deterioration of the security situation, especially social security; the percentage of crimes and misdemeanors related to stolen goods will increase.”
A Lebanese citizen, who sent his input through a third party and did not share his name with The Media Line, said that businesses would have to close. “This phenomenon that started in small Lebanese cities has gradually reached the capital, because businesses don’t know on what basis they will continue to operate.
“We live in a dramatic state of collapse every second [of the day],” the citizen added.
At the beginning of June, demonstrations were held in Beirut and other Lebanese cities, in a renewal of the protests that began in October following proposals for a new tax to help offset the country’s corruption and huge foreign debt. The demonstrations had died off with the onset of the coronavirus pandemic.
Hasan, a Syrian refugee and political analyst who asked The Media Line to withhold his last name for security reasons, said that even before the current financial crisis in Lebanon the Syrian refugees suffered from obstacles in the workplace. “Where there were barely any job opportunities for the Lebanese, Syrians didn’t have any. Now with the current crisis and hardship, in addition to the outrageously high prices, Syrians eat the worst kind of food,” he said.
He said worse was coming as bread ovens began to close, “not to mention that most butchers have closed as well, in addition to most supermarkets. There’s no way to survive; most food goods are disappearing.”
Prices rose daily, and many business owners had closed because they were losing money and their merchandise was piling up, Hasan said. “They buy goods at high prices, and then they can’t sell them.”
In Syria, he said, the situation was even worse, as in addition to the war and the extremely high prices even before the implementation of the US Caesar Law’s provisions, powerful monopolies were able to control the distribution of food because of corruption.
“Both countries, Lebanon and Syria, are about to starve unless quick solutions are found,” Hasan said.
The US Caesar Syria Civilian Protection bill proposes sanctions on the Syrian government, including President Bashar al-Assad, for war crimes committed during the country’s civil war, now in its 10th year. Although the bill has yet to become law, parts of it were incorporated into the National Defense Authorization Act of Fiscal 2020.
Meanwhile on Saturday, a Lebanese judge ordered media organizations to stop interviewing the US ambassador to Lebanon, Dorothy Shea, after she said in a television statement a day earlier that the secretary-general of Hizbollah, Hassan Nasrallah, threatened the country’s stability and that the Iranian-backed organization prevented an economic solution.
“The current government [in which the Shi’ite movement plays a powerful role] has not yet undertaken the promised reforms,” the ambassador said.