Lebanon economic and political unrest explained

By Nourhan AlBahrani

Until the 1970s, the tradition cliché had it that Lebanon was the Switzerland of the Middle East and its city Beirut as the new Paris. Through the adequate usage of institution Lebanon benefited from the Arab petrodollars, Beirut became the centre of banking commerce, and a tourist destination to European and wealth Arabs alike due the freewheeling, open and tolerance atmosphere. This however was a state of exceptionalism since underneath this development laid a plethora of profound issues regarding religious, social economic and political division within Lebanon social fabrication. Arab investors started withdrawing their capital from unstable Lebanon in order to enter the European market. These shortcomings began to blighted Lebanon development from lower revenues and sizeable deficits and with no natural resources to uplift its economy many of the country segment began to plunger. Then the civil war broke out and debt began to accumulating and the constant need to borrow money has currently left Lebanon with more than $90 billion in debt.

Today Lebanon faces the worst economic crisis since the civil war. This is due to decades of economic mismanagement, corruption and overspending along with the government decision for the central bank to borrow money from commercial bank at above the normal market interest rate. This was done to pay back Lebanon increasing debt and to maintain the Lebanese Lira to US dollar at a fix rate of LL.1.500 to $1. The government described this decision as ‘financial engineering’ but critics have labelled it a ‘Ponzi scheme’.

Then the central bank decided to limited the amount of dollars each individual can withdraw from their accounts to stop money leaving the country which led to rising panic. This panic escalated further with the governed decision to raise revenue and preserve the facial probity so they decided to introduce various new taxation on tobacco, petrol and voice call via messaging services like WhatsApp. This led to mass protests in October 2019 calling for a non-partisan, non-sectarian government to unit Lebanon various religious sects and economic reform. The situation worsened with the explosion of port Beirut on the August 4th 2020 caused by the unsafe storage of 2,750 tone of ammonium nitrate that led to the death of over 190 people and over 6500 people injured. The world bank has estimated that the explosion caused a $4.6 billion in damage to building and infrastructure. The lira has currently lost over 80% of its value due to the shortage of the dollar and prices are skyrocketing. The Lebanese people have little trust left in the current political system so they took the streets again and demanded for political and economic reform.

The current situation is a symptoms of a wider failure of governments policies adopted after the end of the civil war in 1990. Whilst, many have argued that colonialism, neo-colonialism and an ongoing imperialism are the blame for Lebanon socio-economic situation  this argument can only be stretched so far. It is true that Lebanon replicated the same political organisation and knowledge that was employed in France after its independence in 1943. Though, the Middle-East is only ‘like’ the west in the sense that to establish a new political system they had to adopt what he called  a compulsory state model since they lacked the capacity to establish other respectable models of statehood. Even-though state formation was established under a European state. The global and historical condition of state-building are very different. The French republican has a secular form of government whereby laws made by the government should rule rather than through religious bias, which ensures that everyone has equal opportunity granted under legal system of state. But when this system was diluted in Lebanon the unwritten Taif agreement was established, which referred to de jure mix of religious and politics, the electoral system bias and making of ministerial and politically sensitive appointed along similar lines where the president is a Maronite Christians, the prime minister a Sunni Muslim and the speaker of parliament a Shia Muslim.

Even though many Lebanese citizens have united in protests the confessional conflict is still prevalent where different parties still attach themselves to external power that benefit them and constantly changing their ideology to maintain social privilege, political power for self-serving purposes. Lebanese government has struggled to agree on electoral law due to different positions could undermine and affect their sectarian policies which are upheld by constitution that uphold a sensitive power sharing formula. Until a national identity is formed in parliament, Lebanon will never be able to construct an effective political system which justify represents the needs of the various religious sections the nation consists of. After PM Hassan Diab resignation and designated PM Mustapha Adib inability to form a government will Lebanon be able to form a parliament that is non-partisan, non-sectarian to unite Lebanon various religious sects and began economic reform.

Nourhan AlBahrani holds a BA in Politics and Sociology from the University of Brighton and an MA in Human Rights from the University of Sussex. She writes about political, social and human rights issues. 

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Foreign Policy News

Foreign Policy News is a self-financed initiative providing a venue and forum for political analysts and experts to disseminate analysis of major political and business-related events in the world, shed light on particulars of U.S. foreign policy from the perspective of foreign media and present alternative overview on current events affecting the international relations.

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