By James Hoyt
On August 4, 2020, an explosion ripped through the Port of Beirut, providing a devastating visual representation of the series of hardships that the Mediterranean country has endured in recent years. In addition to that explosion and the adverse effects of a global pandemic, the country is facing an economic crisis and a rapidly falling standard of living that has dropped a startling proportion of the population below the poverty line. Lebanon’s turmoil is largely due to the mismanagement of the country by a class of elites that have proven themselves incapable of effective rule. The future of the country relies on the ability of its people to recognize that their shared plight stretches across the religious divides that have shaped the nation since its civil war more than thirty years ago.
Both the severity and the root causes of Lebanon’s economic crisis are worth examination. The groundwork for catastrophe was laid over the course of many years by poorly planned Lebanese monetary policy. In the 1990s, the Lebanese government decided to peg the Lebanese lira to the American dollar, guaranteeing that Lebanon would be able to exchange Lebanese pounds and United States dollars at a set rate. To back up this guarantee, the Lebanese government had to maintain an ample supply of dollars so that currency exchanges could happen at the stated exchange rate. The head of Lebanon’s central bank adopted a dubious strategy to keep dollars flowing into the country. Lebanon offered generous interest rates for those that invested dollars in Lebanon. However, the only way for Lebanon to afford to pay such lucrative interest rates to initial investors was to pay them with the dollars invested by recent investors. The Lebanese central bank was running a Ponzi scheme which, like all Ponzi schemes do, would eventually implode. Following protests over a proposed tax on WhatsApp usage in 2019, investment onto Lebanon dried up and the currency collapsed.1
The following year would only further harm Lebanon’s economy. The coronavirus pandemic halted tourism-related revenue streams and the Beirut port blast scarred a large chunk of the capital city. Lebanon is facing an extended economic depression where real GDP shrunk by more than 20% in 2020, the exchange rate continued to fall, inflation is well over 80 percent, and poverty is increasing.2 The crisis has made the country nearly unlivable. Lebanese citizens must wait hours in line to buy gasoline, large proportions of family income are spent on groceries, and electricity is so sparse that Beirut experiences frequent blackouts. Many storeowners have been forced to close their shops, and emigration out of Lebanon has raised concerns of irreversible brain drain.3 According to the World Bank, the crisis could be one of the worst that the world has seen in centuries in terms of falling standards of living.4
As the situation worsens, Lebanese citizens have lost faith in the political system of sectarian power sharing. Lebanon’s political structure is guided by a power sharing agreement between several sectarian groups that do not have enough support to rule alone. According to this agreement, Lebanon’s president is expected to be a Maronite Christian, the Prime Minister must be a Sunni Muslim, the speaker of parliament is Shia, and the Prime Minister’s cabinet is meant to be half Christian and half Muslim. This system was set up so that these groups would be forced to consult with each other in order to maintain some semblance of institutional order, but such order has been noticeably absent in recent years. Several consecutive governments have failed to right the country’s economic downturn and the justice institutions in the country have failed to find a culprit for the port blast that occurred last year.
Familiar faces seem to rotate in and out of positions of power, but the Lebanese people do not see much positive change for all the movement in the country’s top offices. The ruling elites are believed to be corrupt, controlling state institutions for their own enrichment and not for the good of the people.5 This perspective is not outlandish. In just the past year, President Michel Aoun blocked then-Prime Minister Saad Hariri’s proposed cabinet eighteen times in order to ensure that Lebanon’s Christians could have veto power over any government decision.6 This move was made to consolidate Aoun’s support among his Lebanese Christian supporters, at the cost of further delaying the formation of a functional government that could pull Lebanon out of its downward spiral. Such arguments over cabinet positions seem trivial at a time when many Lebanese citizens are struggling to maintain their livelihoods.
Many people have taken to the street to protest their disconnected political leadership. One such protest occurred on the anniversary of the Beirut port explosion, driven by anger that the government had failed to find anyone responsible for the blast.7 Further protests in October resulted in a flareup of violence between armed members of Hezbollah and another unknown armed group, leaving at least seven people dead in downtown Beirut.8
At this stage, the Lebanese people ought to be careful how they direct their energy and justified frustration. Focusing on the punishment of whichever apparatus of the sectarian system caused the Beirut port explosion would likely lead to more outbursts of violence similar to the one seen at the October protests. Instead, the Lebanese people should support civil society groups that could eventually build a political consensus outside of the system of sectarian power sharing that has led the nation into its current dysfunctional state.
There are several existing cross-sect organizations that are already pushing for reform, including groups such as the Civil Campaign for Electoral Reform and the University Initiative for Electoral Reform, which pressure the Lebanese government to change the current sectarian centered structure of government.9 Other organizations have aimed to seat representatives in the Lebanese parliament to displace the sectarian elites. Beirut Madinati (literally “Beirut is My City”) has worked to elect reformists in the capital city and has partnered with the organization LiBaladi (“For My Country”), which supports independent parliamentary candidates across Lebanon.10
Both the Lebanese people and international stakeholders ought to dedicate serious attention to strengthening these civil society groups, as they could eventually support a sizeable body of independent politicians that challenge the dominance of the elite class. This process would take time and could do little to resolve the current crisis. Nonetheless, Lebanon’s civil society is one of the only drivers that can push the country to adopt a competent and accountable system of governance. As the Lebanese people can attest, this would be a desperately necessary transition.
Blair, Edmund. 2020. “Explainer: Lebanon’s Financial Meltdown and How It Happened | Reuters.” https://www.reuters.com/article/uk-lebanon-crisis-financial-explainer/explainer lebanons-financial-meltdown-and-how-it-happened-idUKKBN268223 (November 9, 2021).
Enders, David. “Lebanese Mark One-Year Anniversary of Blast With Protests, Rage, and Remembrance.” Foreign Policy. https://foreignpolicy.com/2021/08/05/lebanon-beirut-blast anniversary-protests-economic-crisis/ (November 9, 2021).
Hubbard, Ben, and Bryan Denton. 2021. “Collapse: Inside Lebanon’s Worst Economic Meltdown in More Than a Century.” The New York Times. https://www.nytimes.com/2021/08/04/world/lebanon-crisis.html (November 11, 2021).
Karam, Jeffrey G. 2018. “Lebanon’s Civil Society as an Anchor of Stability.” Brandeis University Middle East Brief (117): 10. https://www.brandeis.edu/crown/publications/middle east-briefs/pdfs/101-200/meb117.pdf (November 11, 2021).
McKelvey, Robert. 2021. “Lebanese Voice Concerns and Mixed Emotions on New Government | Humanitarian Crises News | Al Jazeera.” https://www.aljazeera.com/news/2021/9/26/lebanese-voice-concerns-and-mixed-emotions-on new-government (November 9, 2021).
Vohra, Anchal. “Lebanon Is in Terminal Brain Drain.” Foreign Policy. https://foreignpolicy.com/2021/08/09/lebanon-terminal-brain-drain-migration/ (November 9, 2021a).
———. “No Prime Minister—and No More Hope—for Lebanon.” Foreign Policy. https://foreignpolicy.com/2021/07/16/no-prime-minister-and-no-more-hope-for-lebanon/ (November 9, 2021b).
———. “Sectarian Violence Is Lebanese Elites’ Comfort Zone.” https://foreignpolicy.com/2021/10/16/sectarian-violence-is-lebanese-elites-comfort zone/?utm_source=PostUp&utm_medium=email&utm_campaign=37004&utm_term=Editors%2 0Picks%20OC&tpcc=37004(November 9, 2021c).
World Bank. “The World Bank in Lebanon.” World Bank. https://www.worldbank.org/en/country/lebanon/overview(November 9, 2021).