Conflict Alerts # 142, 12 August 2020
In the news
On 4 August, a deadly explosion at Beirut port claimed 200 lives and left around 300,000 homeless along with causing billions of dollars in damage to property. A day later the Lebanese PM declared Beirut a disaster-stricken city and announced a state of emergency for two weeks. As it became clear that 3000 tonnes of ammonium nitrate in storage for the last six years was the cause for the blast, thousands of protestors took to the streets in central Beirut demanding justice. Protestors stormed into various government ministries and banks demanding political change and an end to corruption.
On 10 August, barely two days after calling for early elections, PM Hasan Diab announced his resignation from office blaming the blast on decades of corruption by the ruling elites.
Issues at large
First, the blast has caused a humanitarian and food crisis for an economy already in free fall. Apart from Venezuela, Lebanon is the only other country that is reeling under hyperinflation. According to official figures, food and clothing costs had earlier surged by 190 per cent and 172 per cent as minimum wages shrank. About 120,000 metric tonnes of staple food imports perished in the blast as the FAO chief warned that Lebanon had bread supplies only for another two and a half weeks.
Lebanon has the world's third-highest debt to GDP ratio at 170 per cent as the value of the currency against the dollar has reduced by 80 per cent. With unsustainable fiscal and current account deficits, IMF projects that the economy will shrink by 12 per cent in 2020. Having already defaulted on its debt repayment in March and subsequently failing to secure an economic rescue package from the IMF, the Lebanese economy is completely incapable of footing the $15 billion bill of the damage caused by the blast. On 6 August, President Emmanuel Macron visited Beirut and promised to head an international effort to mobilize humanitarian aid for the country. However, despite foreign donations of up to $300 billion, it won't be enough to deal with all the crises at once.
Second, the absence of governance. The state has been regularly defaulting on delivering public goods and services. In the wake of the blast, it is the civilian volunteers that have largely undertaken the clean-up of Beirut with the state agencies conspicuously absent from the scene. Regular and prolonged power cuts, a dismal state of public sanitation, hospitals at the verge of closure, long queues at the gas stations and empty groceries have exasperated the public.
Third, sectarian politics and the ruling elite. Lebanon has 18 recognized religious sects that have led to a highly sectarian political system. Militias at the end of the civil war negotiated a power-sharing agreement in the Lebanese legislature that is prone to infighting. Every sect has its respective voter base that it caters to while also drawing money from specific sections of the economy. Protestors in Beirut therefore, do not want international donors to deliver assistance through government channels as they fear it might either be sold or funnelled to sectarian loyalists and the ruling elites.
As the blame game for assigning culpability for the blasts is underway, Lebanon is yearning for change. As the political elite stand discredited, scheduling early elections will not solve the structural and economic problems that are at the root of the public anger spilling on the streets. Switching governments does not solve the problem of governance absenteeism nor does it improve the standard of living. For Lebanon, this moment in history is as much about the survival of the vanishing middle class as it is about resuscitating the country.