Beirut looked like a ghost town all day on Thursday. The private transport strike on account of the now-daily increases in gasoline prices paralyzed the capital and the main roads of the country. The president of the road transport union, Bassam Tleis, had announced a “day of anger and paralysis of the country” since December 22, when he invited all Lebanese affected by the crisis to take part in the protest between 5 a.m. and 5 p.m.
The dollarization of the Lebanese economy is among the causes of the financial crisis, which began in 2019 but has been predicted for a long time. The lira being pegged to the dollar since 1997 at a fixed rate of 1,507.5 liras per dollar fostered an economic and financial bubble over the years, which, once it burst, plunged the country into the abyss in a very short time. A few days ago, on the black market, the dollar went above 33,000 lira.
The devaluation of the lira and last summer’s interruption of the state subsidies that lowered the price of gasoline made it jump to over 400,000 lira for 20 liters (the local unit of measurement), an all-time high. This crisis also means less public electricity production, higher prices for running private generators and several hours of total blackout per day.
The aggressive neoliberal policies implemented by the then-Prime Minister Rafiq Hariri after the years of civil war (1975-90) privileged the tertiary sector, and, with the strength of a lira pegged to the dollar, favored imports, while the production of primary and secondary goods remained at just 20% of national needs. Once the financial house of cards collapsed, the real economy remained dollarized, almost everything continued to be imported, but the majority of the population had to face the reality of a depreciated lira.
Before the crisis, with an inflated economy, 10 liters of water used to cost 1,500 liras, officially $1. Today, with the dollar between 30-33,000 liras, they cost 15-16,000 liras, or 50 cents. As a result, those who continue to be paid in liras, even if their salaries have seen token increases, are at an obvious disadvantage, while those who have access to dollars have enormous purchasing power. The middle bourgeoisie, the subordinate classes, the state-employed and the army are among the most affected by this phenomenon. Meanwhile, the rich few are getting richer.
“The problem is that we earn in liras but we have to pay for everything in dollars. Rent is in dollars, car payments are in dollars. Before, we taxi drivers used to make a dignified living, but today we can’t survive. The state promised aid that never arrived,” says Alaa Farhat, in his cab together with a small group of colleagues in front of the Al-Amin mosque in Martyrs’ Square in Beirut, which the police have closed off to traffic. “We don’t buy meat anymore, not even chicken. We eat rice, vegetables, legumes: it’s good for our health, the government cares about our health!” comes the sarcastic comment from another taxi driver, followed by a sad laugh.
The new Prime Minister Mikati, who took office in September, had indeed promised aid. However, yet another political impasse has meant that the government hasn’t had a meeting since October. The consequence is that the economic aid promised to Lebanon by the international community led by Macron following the August 4, 2020 explosion in Beirut harbor is still blocked, and that the International Monetary Fund, which expressed its willingness to help, has had no answer.
The fact that the May 15 elections are coming doesn’t help. The internal tension between the political forces is rising, as demonstrated by the gunfights on October 14 in Tayyoune, on the old border line between east and west Beirut, in which 7 people died. The clash took place between snipers close to the Lebanese Forces and a protest by Amal/Hezbollah which was demanding the removal of Judge Bitar, who is investigating the events of the harbor explosion and whom Hezbollah have accused of being politicized. The diplomatic crisis with the Gulf in recent months is proof that the Lebanese issue is crossing beyond national borders. Broadly speaking, pro- and anti-Hezbollah-Tehran-Damascus positions are polarizing actors in the region once again, as they are inside the country.
The road blocks announced by the transporters took place, but other people did not take part in the protests. Beirut was semi-deserted, with many stores closed, a sign of the resignation of those who feel that trying to do anything is pointless now. Paradoxically, but understandably, the crisis has strengthened the old bonds of patronage, now that the needs are more pressing than ever, and has definitively distanced citizens from public affairs. Little remains of the hopes for a revolution (first peaceful, then at times violent) from the now-distant October 17, 2019, when the slogan was kullun ya’nee kullun, “everyone means everyone,” calling for the removal en bloc of a corrupt political class that has been in power since before the civil war.
On Wednesday, a small but dedicated group of left-wing dissidents attacked the headquarters of the Central Bank, but was dispersed by the police. On Tuesday, Judge Ghada Aoun barred the governor of the Central Bank, Riad Salameh, from leaving the country, one of Rafiq Hariri’s men who has been in office for thirty years, and who has been under investigation in Switzerland and France since 2020 for tax fraud and money laundering. Salameh created a Ponzi scheme that lay at the core of the Lebanese collapse and transferred large sums of money abroad through offshore companies. Today, the Lebanese who are able to do so are leaving the country. Applications for visas and residence permits abroad have grown exponentially in the last two years.
Seventy-four percent of the population now lives in poverty, and if one takes into account data measuring access to health, education and public services, the percentage rises to 82%, a figure that has doubled from 42% in 2019. These are the numbers provided in the annual report of the UN agency ESCWA on “multidimensional poverty” in Lebanon from September 2021. Nonetheless, the stalemate continues, and the country is sinking further and further by the day in the quicksand of a crisis without end.
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