Lebanon in deep crisis as Covid-19 contagion exacerbates economic woes

Rampant inflation and 30 per cent unemployment places huge strain on society

American University of Beirut employees with anti-government protesters gather in front of the entrance of the American University of Beirut Medical Center in Beirut, Lebanon. Photograph: Nabil Mounzer/EPA
American University of Beirut employees with anti-government protesters gather in front of the entrance of the American University of Beirut Medical Center in Beirut, Lebanon. Photograph: Nabil Mounzer/EPA

Lebanon continues its downward trajectory with Covid-19 contagion exacerbating the country's financial, economic and political decline.

"It is a tragic country in a tragic situation, there is no horizon that is a little bit bright," former environment minister Mohamed Mashnouk told The Irish Times by telephone from Beirut.

He blames the politicians for seeking to secure their own interests rather than those of the country. “They have to put their differences aside and stand shoulder to shoulder to save Lebanon.”

The value of the Lebanese currency, the lira or pound, has plunged 80 per cent since October. Withdrawals from banks are limited and paid in depreciating Lebanese liras. Inflation is soaring, driving up the prices of food, medicines, fuel and other essential goods.

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During the day there are two two-hour periods of electricity outage; at night three hours. For those who can afford them, generators and batteries provide power during outages.

Lebanese have been reduced to three classes, Mr Mashnouk says, "poor, poorer and poorest". The World Bank cites government reports that 22 per cent live below the extreme poverty line. The official unemployment rate is 30 per cent.

Crime levels are going up and Lebanon’s internal security forces have reported a significant increase in thefts and robberies this year, while Mr. Mashnouk says armed carjacking and mugging are also on the rise.

After Lebanon recorded daily double- and triple-digit Covid-19 infections, health minister Hamad Hassan warned of a surge since the lifting of lockdown and reopening of the airport. More than 2,800 cases and 41 deaths have been confirmed.

Mr Hassan said a surge could overwhelm Lebanon’s hospitals, which are already under strain. Beirutis were shocked when the American University Hospital, the country’s premier medical facility, sacked 850 administrators and nurses because of the dire economic situation.

Fadlo Khuri, president of the 154 year-old American University of Beirut, has cut dozens of faculty and staff members and appealed for rescue funds from alumni and international donors.

Foreign donors

Private primary and secondary schools have closed; the public system is already operating in double shifts and cannot find funds for more teachers or room for an influx of students.

The government's failure to provide an overall assessment of the situation and initiate reforms has stalled negotiations with the International Monetary Fund for an infusion of $10 billion (€8.7billion) while foreign donors continue to withhold $11 billion pledged in Paris in 2018.

Since the financial crisis is at the heart of the country's travails, the assets of central bank governor Riad Salameh have been seized on foot of a legal action filed by an activist group known as the People Want to Reform the System. It accuses Mr Salameh, who has been in the post for 30 years, of negligence and inciting people to withdraw their money from bank accounts and selling state bondsi.

The Financial Times cited an official who said that despite restrictions banks had “smuggled”nearly $6 billion out of the country since protests against mismanagement and corruption began last October.

Michael Jansen

Michael Jansen

Michael Jansen contributes news from and analysis of the Middle East to The Irish Times