Lebanese feel strain of slow and unequal growth

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His old Peugeot taxi has ferried both Lebanese and foreigners across the country for many years, and it is showing the signs of age and wear, inside and out. But Tawfiq Abu Daus has no plans to replace it with a newer car. “As long as it works, I’ll keep it. A car is too expensive, even a used one,” he says, squeezing his cigarette between two nicotine-stained fingers and taking a hard puff.

The folds and wrinkles on his face tell the unvarnished story of his advanced age. Tawfiq should have retired already, but he can’t afford it, and spends much of his day in search of clients, shuttling between Krayteh, Manara and Ain Mreiseh. One can often find him waiting at the corner between Jeanne d’Arc Street and the central Hamra Street.

There is a restaurant right on that corner that has changed owners several times in recent years, switching from traditional Lebanese cuisine to pizza, and now, for the past few weeks, to a sushi bar, following a global trend. “Let’s see how long this one lasts,” says the elderly taxi driver cynically, pointing to the repeated failures of one management after another—a small example of the extreme fragility of the Lebanese economy, now going through a very delicate phase.

The front pages of newspapers in Beirut are full of headlines about the attempts, so far unsuccessful, to break the political deadlock and form a new government, and the shooting down of the Russian transport plane during the latest Israeli air raid on Syria. “You journalists really think that the Lebanese care about what is happening in Syria, with the Saudis and the Iranians or with [prospective Prime Minister] Saad Hariri and [the Shiite movement] Hezbollah?” asks Tawfiq, with sarcasm and bitterness in his voice.

“We care about how to survive,” he says. “Life has become impossible. It costs so much. The new taxes, the high prices, the tourists who don’t come like before: these are the issues that preoccupy us.” Is our taxi driver friend painting an overly bleak picture of things?

We know that the regional situation, tensions and conflicts end up weighing, in one way or another, on Lebanon’s destiny: the war in neighboring Syria has been right on its doorstep for years now. No one in this country—which has experienced its own bloody civil war (1975-1990), and which has suffered terrorist attacks in recent years and welcomed more than one million Syrian refugees—can really think what is happening in Syria is “irrelevant.” However, what is certain is that things are very bad for the Lebanese economy and much of the population.

Nowadays, the middle class is suffering as well: as is happening to some extent everywhere, it is losing ground, losing its security, and becoming impoverished. One should not be misled by the burgeoning nightlife, in both the Muslim and Christian areas from Hamra to Mar Michael, which enlivens the soul of the most vibrant and liberal of the Arab capitals. Only a minority of the Lebanese, and foreigners, can afford to take part in it.

“I think there are many people in my situation. I have two jobs, and what I earn is just enough for me to eat, pay the bills and pay the rent. I can’t afford entertainment,” says Amir, a seller in a shoe store. This is the story that many Lebanese would be able to tell, with many sacrifices on their part which are not rewarded by efficient public services. Power outages—to name just the most notorious problem—are frequent even in Beirut, several times a day.

Some voices are insisting that Lebanon, without a government for months, is close to collapse. Last week, President Michel Aoun had to intervene to deny strongly that the Lebanese lira is risking the same fate as Turkish one. But many have not found his words convincing.

The public debt increased by 4.3 percent in the first six months of 2018, to $83 billion, compared to $79 billion in the same period last year, according to This Week, a publication of the Byblos Bank Group. Since the beginning of the 1990s, Lebanon has seen its public debt climb higher and higher, only 40 percent of which is held by the commercial banks in the country.

The economic growth is also slowing, down to 1.7 percent this year from 1.9 percent in 2017, according to an Economist Intelligence Unit (EIU) report, due to the failure to form a new government and the instability resulting from local and regional tensions. The EIU has revised its inflation forecasts upwards, and has warned that the lira will depreciate against the euro and the dollar.

Fighting the fallout from these negative projections, the Governor of the Central Bank, Riad Salameh, reiterated, much like President Aoun, that there was no immediate threat to the national currency, because—he argued—the foreign currency reserves were sufficient. He stressed the importance of fiscal and economic reforms to reduce the budget deficit.

However, others disagreed with these reassurances and insisted that the crisis was serious and there were real dangers to the national economy. “Facing the results of economic mismanagement that has shown its deficiencies, Lebanese politicians, riding the wave of populism that you Europeans know very well by now, would rather point to the presence of many Syrian refugees in Lebanon [one million officially registered, and at least another 500,000 undocumented] as the cause of every problem, creating the impression among the low-income bracket and the poorest of the population that the refugees are taking away jobs and resources from the Lebanese,” Amer Mohsen, an analyst for the daily Al Akhbar, explained to us.

“The truth is that Lebanon is heavily in debt, and the size of this debt, together with the little clout the country possesses in the realm of regional politics, could push its long-term economic supporters to stay away,” Mohsen added, referring here to Saudi Arabia.

“In the past,” the analyst added, “during crises and wars, such as in 2006 [when Israel bombed and invaded Lebanon for several weeks], Riyadh stepped in to save Lebanon, its finances and its currency. Now they are hesitating to do so, because they think that such help would end up benefiting one of their enemies, Hezbollah.”

In short, the Saudi monarchy has no intention of investing—that is, de facto giving away—billions of dollars without getting political and diplomatic benefits in return, especially after the events of nearly a year ago, a surreal combination of political drama and comedy. In early November 2017, the Sunni Lebanese Prime Minister Saad Hariri, a Saudi ally, in a misguided plan to favor the Saudis’ designs in Lebanon and strike a blow against Hezbollah, the Lebanese Shiite movement allied with Tehran, suddenly resigned while he was in the Saudi capital. At the same time, he launched harsh accusations against Syria and Iran, raising up an enormous cloud of controversy.

Then, just as shockingly, he withdrew his resignation a few weeks after his return to Lebanon. However, his opponents, chief among them Hezbollah, held their fire. Not only did they not ask him to leave the political scene, but instead, after the elections in May where Hariri’s party took a severe beating, they nominated him once again as prime minister—of a government that has not yet been able to emerge.

“The Hariri affair, and Hezbollah’s electoral victory,” Mohsen explained, “are making Saudi Arabia and other Gulf monarchies reluctant to intervene and offer the financial support that Lebanon needs. They know that this would ultimately ensure the stability of a government formally headed by Hariri, but in fact led by Hezbollah in the most crucial aspects of its governing program. And the US and Europe don’t seem willing to help the Lebanese either. Bankruptcy is therefore a real risk, despite politicians’ denials.”

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Originally published at https://ilmanifesto.it/la-chiamano-movida-libanese-ma-beirut-e-sempre-piu-povera/ on 2018-09-21