There is no simple explanation for the economic disaster Lebanon has found itself in. It is so multifaceted that no one has the answer to how the country will get back on its feet, at a time when the banks have stopped working, 75 percent of the population lives below the UN poverty line of 2 dollars a day and where the value of a Lebanese pound has fallen by 95 percent in one year.
There are no figures for the size of unemployment, but property prices have fallen by 75 per cent. About the same as the salaries.
The historical background is that the expenditure after the civil war from 1975 to 1990 ran completely wild, at the same time as the Gulf states withdrew their support after increased Iranian influence, political conflicts and general unrest in the Middle East.
Then came the Syrian refugee crisis in 2012, the pandemic in 2020 and the gigantic explosion in Beirut’s port area in the same year, with 218 dead, over 7,000 injured and destruction up to 70 kilometers from the accident site.
The banks are paralyzed and non-functioning. The customers have been banned from all dollar accounts and their savings in Lebanese currency have been reduced to a fraction.
Lebanon’s economic collapse has thus become the story of how the vision of rebuilding a nation known as the Switzerland of the Middle East was replaced by a misrule in which a political and economic elite borrowed from the community without real limits.
In this chaotic landscape, Base Aid has been carrying out aid work among refugees along the border with Syria for six years. We have been there 25 times, but also contributed with a number of financial transfers. This will be difficult to maintain in the future. It is no longer possible to pay for goods and services involving the banking system, accounts have been blocked and all payment terminals have been moved upstairs. Anchoring this commitment to a cash economy with the Lebanese pound (LBP), also called the lira, raises the biggest red flag to be raised. In 2016, 1500 LBP was worth 1 dollar, today we have to come up with 39,000 LBP for 1 dollar. Some predict that the 50s will be reached before Christmas. This could have been feasible if the dollar was still the gang’s currency on par with LBP, but dollars can now only be exchanged for local currency on the street corner black market – contrary to all ethical and legal considerations.
For the 1.5 million Syrian refugees still in the country, many say far more, all news is bad news. And in the last year, the attitude of the government and politicians has changed. The news picture is characterized more and more by plots that want the Syrians out of Lebanon, that they should go back. Plays that, in the current situation, go down well with the voters. It is not too difficult to understand either, but the refugees are not in Lebanon because they are enjoying themselves so well. They are there because they fear for their lives if they return home.
This week we met 16-year-old Aya, who has been in a tent camp in the Bekaa Valley since 2013, since she was four years old. The first time we met her she was 10, went to school in a neighboring town and was particularly proud of her English skills. She wanted to share them with the other children in the camp. After the authorities introduced payment for the school bus, she had to stop, and gradually the important lesson she had established has disappeared. Aya’s parents claim that it is anything but safe to return home to the part of Syria they come from, moreover, the vast majority of those who fled are declared unwanted in their home country.
There are many such stories from the Bekaadalen, and there will be no fewer of them in the future.
Assisting families like Aya’s has been a priority task for Base Aid, along with assistance for medical treatment. Operations and follow-up have saved many lives in the six years we have been in the country.
In the streets of the metropolis of Beirut, the Paris of the Middle East, all the street lights are switched off. Many restaurants have closed. In some places they have simply switched off the electricity until further notice, in other places they have been stripped of fixtures and logos. All lifts in public buildings have stopped, the judiciary has collapsed as a result of a lack of funding and the security situation may quickly become more demanding in the future. There are few police officers to be seen on the streets, their wages have become so low that they rather work part of the week elsewhere, without anyone blaming them for it. Now there is no imminent danger that the people will resort to the streets beyond the usual demonstrations, but the combination of poverty and lower security is a known recipe for increased crime.
Lebanon is a country that is described as a “player” in the Middle East, there are many who would like to exploit the situation for increased influence. The country is sectarian, where Christians (with a predominance of Maronites), Sunnis and Shiites share the top positions of power, president, prime minister and head of parliament. The seats in the National Assembly are also divided in this way. The Shia are supported by Iran and Syria, the Sunnis primarily by Saudi Arabia and Qatar.
The man in the street knows that all the savings as of today are gone, but still has hope that a giant refinancing can give them some of it back. How long this hope can be kept alive no one knows, but the Lebanese people have a very special ability to survive. The barter economy is flourishing, people take care of each other, but the situation cannot continue.
During the autumn, we will make a final decision on further involvement in Lebanon, paradoxically at a time when the need for the presence of aid organizations has never been greater.