Introduction
After years of instability, Lebanon is facing an economic crisis. This financial ruin began in 2019 due to years of debt, political instability and economic mismanagement. Since then, their currency has lost over 90% of its value
Current Situation
As of 2019, banks are frozen; civilians are unable to access their funds, are being told their money is now worth a fraction of the original value and can only withdraw within the limits that have been placed. More than 80% of the population is struggling to buy necessities. The financial system is estimated to have lost more than 70 Billion dollars. Due to this, banks are claiming not to have enough funds to pay depositors. The government is unable to provide basic needs. The country is in crisis, from long hours of electricity blackouts to medicine shortages.
Figure 1
The Effects of this Crisis
The impact of this issue is so grave that civilians have taken matters into their own hands and have begun to rob banks to get their money back. Most recently, a woman stormed into a bank, held the staff hostage and insisted that she needed to withdraw money to pay for her sister's cancer treatment. Many say these are not robberies as these individuals only forcefully withdraw their savings and no one else's. As a result of this economic crisis:
The cost of water, electricity, gas and other fuels have increased nearly five times
The cost of healthcare increased three and a half times
The cost of communication, food and beverages has risen three times
The World Bank says, “Lebanon's economic crisis may be one of the three worst in modern times, and it has left eight in ten people poor.”
Is there hope for Lebanon's Economic Crisis?
As of October 2021, the World Bank has assisted in 1.62 billion, consisting of 12 active projects (loans and grants) covering a range of sectors, including water, transport, education, health, poverty targeting, social safety nets, environment, and Small and Medium Enterprises. However, this is not enough to resolve the issue. The International Monetary Fund (IMF) calls on politicians to implement structural and financial reform as the country hits its 26th month with hyperinflation. However, without external intervention by other nations, the economic crisis in Lebanon will worsen.
Cited Sources:
Al Jazeera. (2022, September 24). What's the way out of Lebanon's economic crisis? Al Jazeera. Retrieved October 7, 2022, from https://www.aljazeera.com/program/counting-the-cost/ 2022/9/24/whats-the-way-out-of-lebanons-economic-crisis
Derhally, M. A. (2022, September 28). Lebanon's inflation persists at 162% as IMF calls on politicians to implement reforms. The National. https://www.thenationalnews.com/ business/economy/2022/09/28/lebanons-inflation-persists-at-162-as-imf-calls-on-politicians-to-implement-reforms/
Maishman, E. (2022, September 16). Lebanese banks to shut after string of hold-ups amid economic crisis. BBC. https://www.bbc.com/news/world-middle-east-62931729
The World Bank. (n.d.). Lebanon Overview: Development news, research, data World Bank. Retrieved October 7, 2022, from https://www.worldbank.org/en/country/ lebanon/overview#2
By: Mejgan Shefa
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