Lebanon has recently joined the list of countries facing the worst economic crisis in the world. We can partially guess what the next country will be. When I was in Lebanon last year, I witnessed first-hand the suffering of the people caused by the economic crisis. Within six months, a middle class population had been completely wiped out. Only two wealth groups survive during such economic crises. One is rich and the other is poor.
Besides, another change in such an extraordinary environment would happen without our knowledge. Rich will become richer. Poor will become poorer. A race called the middle class will become extinct by itself. There are two main reasons for Lebanon’s economic crisis. One is Fiscal crisis and the other one is political instability, besides, devaluation of local currency and USD liquidity. Everything that happened in the first three months was a catastrophe invisible to the public. About 5,000 private & medium enterprises were closed.
One million people lost their jobs. Inflation increased by 250%. While the monthly income is unchanged, its value is drastically reduced. The monthly salary, which was previously enough for a family of five to eat three meals a day, is now enough for two meals a day. Essential imports were low due to the informal sector was somehow stable (black money – USD).
The government, on the other hand, was fighting among itself without trying to reach any ‘good’ or ‘urgent’solutions.
On the other hand, people were upset that they could not widthraw their money from the banks. Banks kept a ceiling and controlled people’s withdrawals. Banks have also stopped withdrawing USD. People who did not know the root cause of the problem, smashed the banks.
The oil companies raised the prices of all fuels in a single day – which has increased many times before.
Rising fuel prices will always have a snowball effect. Accordingly the Lebanese capital began to change. The price of bread, Lebanese’s staple food, public transport, taxi, vegetable & pharmaceutical have skyrocketed.
Prices of all goods / services as well as other food items have gone up. The price of drinking water has skyrocketed. Electricity is expensive. Thus the lives of the poor came to the streets. The number of street beggars increased.
Crime increased. Lebanon which was Known as the ‘Little Paris of the Middle East’, was slowly becoming a nation difficult for humans to live in.
The national crisis reached its peak after two months. Fuel shortages paralyze Lebanon completely. When there was a shortage of fuel in Lebanon despite the money, people began to stand & cry along the streets. The basic reason for this restriction is that petroleum companies will no longer be able to import fuel from abroad.
Neither Lebanese nor the country as a whole have the dollars needed to import. Not even a single candy dessert can be bought overseas for the Lebanese pound. A country that relies on imports cannot survive without the dollar.
Every day thousands of vehicles wait in front of gas stations. Some brought their vehicles at two in the morning and left the queue in front of the gas station and waited all day. Even though only 20 liters of fuel were provided per vehicle per day.
Severe fuel shortages led to many more massive problems. The most important issue is the power outage. Within two weeks, one of Lebanon’s two major power plants closed its doors, saying it could never operate again.
It reduced Lebanon’s overall electricity supply by 40%. On the other hand, since the private companies were the backbone of the Lebanese power supply, they also cut off power supply, making it impossible for them to operate their power generators all day.
So, at the end of six months, the whole of Lebanon had to face a 14-18 hour blackout. The people were plunged into darkness little by little.
In the meanwhile another ‘miracle’ happened. When the economic crisis reaches a critical level, the only way to recover is to fall at the feet of the International Monetary Fund (IMF) but Lebanon does not want to go to IMF. The reason is the ego of those in power. (Remember the recent interviews with the Governor of the Central Bank of Sri Lanka?). Thus, the IMF, the last hope, abandoned Lebanon.
Lebanon’s economic crisis is not over. (It will take 10-15 years to fix a massive economic downturn).
There is no progress. The contrary situation is getting worse day by day. Lebanon could not find any solution. They have not yet been able to reach any conclusions regarding the political & fiscal reforms.
The IMF says the situation is out of control and they describe it as one of the worst economic crises in history.
As I had a racial fear in me at the time of writing this, the same feeling must have occurred to you too while you read this.
The path, we are on is not the right one. Only God can save us.
Amalraj Francis
