As the Lebanese economy reaches the brink of collapse, a newspaper report warns Washington Post That any war between Lebanon and Israel would have catastrophic repercussions.
The report points to a number of evidence that the Lebanese are currently experiencing, including a decline in soldiers’ wages to the point that many of them are working in side jobs such as drivers for Uber or in valet services, and angry people attacking bank headquarters to get their savings, and even ambulance and firefighter workers. They are asking for donations to continue providing services.
Lebanon has been suffering from a major economic collapse for more than four years, with most of the population now below the poverty line, according to the World Bank.
The consequences of the unprecedented economic crisis were reflected in the country’s various sectors, including the construction sector and dilapidated infrastructure.
Now many observers fear that the ongoing skirmishes between Israeli forces and Iran-backed Hezbollah along Lebanon’s southern border could slide into a broader war.
Ongoing skirmishes between Israel and Lebanese Hezbollah along the border coincide with the war in Gaza
After Lebanon survived a 15-year civil war and a conflict between Israel and Hezbollah in 2006, the Lebanese are now “exhausted,” according to Simon Naima, a professor of economics at the American University of Beirut.
The newspaper quoted him as saying, “The situation is completely different today. In 2006, during the last war with Israel, we had a fully functioning economy, we had an effective banking system that provided credit to the private sector and contributed to growth, we had a government, and we had a president.”
The current developments, whether the war or the economic repercussions, come in light of a severe political crisis represented in particular by the vacancy of the position of the President of the Republic for more than 15 months, and the presence of a caretaker government that prevents political divisions and laws from performing its duties effectively, leading to almost complete paralysis at the political level. Make decision.
The currency has lost more than 90 percent of its value since 2019, and banks do not allow depositors to withdraw their money in full.
On January 7, passengers traveling through Beirut airport saw that the arrival and departure screens switched to displaying a message addressed to Hezbollah leader Hassan Nasrallah, accusing him of putting the country at risk of all-out war with Israel.
The letter stressed the deep fear that the current confrontation between Hezbollah and Israel could explode into a new war, and demonstrated how easily vital transportation systems could be compromised.
A message to Hezbollah… hacking the screens of Beirut International Airport
Information displays at Beirut International Airport were hacked by local anti-Hezbollah groups on Sunday, as clashes continued to escalate between the Lebanese armed group and the Israeli army along the border.
Naima points out that in 2006, Lebanon received support from Arab countries, especially the oil-rich Arab Gulf countries, for reconstruction after the end of that war.
But the situation today is different, as relations with the Gulf states have become strained due to the growing regional presence of Hezbollah, and the tension has been exacerbated by a general lack of interest in Lebanon among young Gulf leaders.
According to Naima, what kept the Lebanese economy going without complete collapse was the support of Lebanese expatriates and their remittances. “This is the main source of foreign currency today, in addition to meager tourism revenues.”
A United Nations study released in 2023 estimated that remittances from expatriates, which average $6.5 billion annually, represent more than a third of the gross domestic product.
But if an all-out war breaks out, “it will become very difficult for Lebanese expatriates to continue sending remittances from abroad,” according to Naima.
The head of civil defense in the south, Hassan Fakih, complains of the lack of equipment necessary to rescue anyone from under the rubble, in addition to the fact that under the financial burden, salaries have become worthless after the local currency has lost most of its value, stressing that any large-scale war “will certainly affect… We worked with our limited capabilities.”
“Even if war does not eventually break out, economic and financial collapse is still possible,” Naima said.
He adds: “In addition to what is happening in the south in terms of clashes between Israel and Hezbollah, no reforms have been implemented since the outbreak of the financial crisis in 2019 and nothing has been done to deal with the crisis, so the economy is still on the path to complete collapse.”
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2024-02-25 23:00:54
