The Lebanese scene is becoming increasingly complex with the escalation of political and economic indicators that predict the heat of the next stage, but the scene is not without contradictions that raise questions about the nature of the unprecedented crisis in Lebanon’s history, especially with the approach of the summer season, which formally suggests that the country is recovering with the recovery of the tourism and services sector.
After the official procedures related to the spread of the Corona virus were lifted, the scene of overcrowding returned to restaurants, markets and tourist facilities, and hotel and resort reservations reached their peak despite the exorbitant rise in the cost of their bill for those who receive their salaries in Lebanese pounds. Read also The Central Bank of Lebanon is studying a mechanism for repaying frozen account funds Bale is not for all the poor… How did the collapse reverse the consumption pattern of the Lebanese?Lebanon.. Exacerbation of the crisis in the pharmaceutical and fuel sectors in the country Infringements on public marine property in Lebanon.. How do they reflect the obstacles to recovering looted funds?
In an intuitive conclusion, observers link this recovery to what is known as the “expatriate dollar.” On the one hand, expatriates continue to send remittances at a monthly rate to their families, and on the other hand, Lebanon’s airport is witnessing in the late spring (2021) the influx of expatriates – who carry hard currencies – in double numbers compared to last year.
Thus, every $100 of expatriates and foreign tourists makes a difference in consumption and tourism. Before the crisis it was equal to 150,000 liras (according to the official exchange rate of 1500 liras), today it is equivalent to 1.3 million liras (according to the black market exchange rate, about 13,000 pounds), That is, about twice the minimum wage of 650,000 liras (about $50).
However, the treasurer of the Syndicate of Restaurants and Cafes in Lebanon, Aref Saadeh, considers that there is an exaggeration to talk about the recovery of the tourism sector facilities after nearly two years of accumulating losses.
He said that people’s high demand for weeks at restaurants and cafes does not express “the prosperity of the sector, which is resisting with its last breath,” as he put it to Al Jazeera Net.
Saadeh considers that the restaurant bill – which includes the cost of food, workers’ wages, shop and maintenance fees – “has lost its value due to the deterioration of the lira, and is no longer sufficient despite its high price to meet all needs or achieve profits.”
The evidence for this – according to Saadeh – is that among the 12,000 tourist establishments in Lebanon (including about 8,000 restaurants and cafes), only 30% of them remain after hundreds of establishments closed their doors successively, or were damaged by the explosion of Beirut Port on August 4, 2020. And what followed was the layoffs of thousands of young male and female workers, and “most of the rest of them are looking for opportunities to emigrate, even for only $500.”
Saadeh added that the financial and political authorities did not extend a helping hand to those in charge of the tourism sector, and that “the manifestations of recovery for days due to the movement of expatriates do not compensate for the state of paralysis throughout the year, but rather reflect the height of the economic crisis.”
Contradictions and facts
This contradictory reality, both in form and content, was addressed by the “Information International” in a study it published on May 31, 2021 under the title “Lebanon between numbers, appearances and facts.. Where is the truth?”
Based on numerical data, Information International concluded that the scenes of welfare that emerged at the gates of the summer do not reflect the realities of the Lebanese reality, which was dominated by manifestations of poverty and destitution in the suburbs of Beirut and in the outskirts to the north and south and in Mount Lebanon.
The study considers that the manifestations of recovery in tourist facilities are caused by 5% of the wealthy in Lebanon, or about 215,000 individuals out of the number of Lebanese residing among about 4.3 million people, in addition to about 200,000 families, or about 850,000 individuals who receive remittances from abroad from their families. and their relatives, and the remittance value ranges between 200 and 2,000 dollars per month, which gives this category a high purchasing power.
Information International concludes that the presence of about one million Lebanese with high purchasing power and high income in dollars (the 5% of the wealthy Lebanese, in addition to 850,000 Lebanese receiving foreign currency transfers from abroad) gives unrealistic aspects of well-being, and “does not cancel the fact that there are About 3 million resident Lebanese live in difficult economic and living conditions.
What reinforces the persistence of the great contradiction is that more than 95% of workers in Lebanon receive their salaries in Lebanese pounds, which has lost more than 85% of its value.
The World Bank estimates that more than half of the Lebanese residents are poor, about 2.365 million Lebanese, of whom 25% are below the extreme poverty line.
Unemployment reached 35%, or about 480,000, and there are about 300,000 who work intermittently in non-permanent occupations that do not constitute continuity, in addition to depriving about 45% of the Lebanese people of health care, according to the “Information International”.
Lebanon is drowning
Concurrently, the “Lebanese Economic Observatory for Spring 2021” published an extensive report issued by the World Bank on May 31, titled “Lebanon is sinking… towards the 3 worst global crises.”
He considered that “the economic and financial crisis that hits Lebanon is among the ten crises and perhaps among the three most severe globally since the mid-19th century,” and blamed the ruling class for what he described as a “deliberate depression”, because there is no clear turning point on the horizon “due to deliberate catastrophic inaction. in politics”.
The World Bank report published figures that reflect the severity of the economic collapse, as the gross domestic product declined from about 55 billion dollars in 2018 to about 33 billion dollars in 2020, and the per capita GDP decreased by about 40%.
Regarding the recent “macro-economic and financial” developments, the report considered that the financial and monetary turmoil is leading the crisis conditions through the interaction between the dollar exchange rate, inflation and the monetary bloc in its narrow sense.
Real GDP growth is estimated to contract by 20.3% in 2020 after a 6.7% contraction in 2019.
He pointed out that “the severe lack of foreign currency threatens to end private sector contracts for the maintenance of electric power plants and temporary power generation.”
And he expected, based on negative data, that “the real GDP, which suffers from a severe and chronic economic depression, will shrink by 9.5% in 2021.”
wallpapers and facts
These and other numbers prompt the economic academic, George Corm, the former Minister of Finance to remind that the World Bank, which is located in Lebanon through offices and economists, has previously supervised the delineation of internal financial policies over the past decades, as did the International Monetary Fund and foreign embassies that own analytical devices for the secrets of the Lebanese economy. .
Therefore, Corm considers in a statement to Al Jazeera Net that the World Bank bears a “moral responsibility” towards Lebanon “because it has never been enthusiastic about revealing these facts known to it”, and recent reports appear to him – according to Corm – as compensation for his silence and his transient criticisms in the past.
The director of the Foundation for Research and Consulting in Lebanon, Kamal Hamdan, agrees with Corm’s opinion, recalling that the World Bank and other international institutions have previously fueled and financed the successive Lebanese governments responsible for the bulk of the collapse.
But the positive with this kind of reports – according to Hamdan – is to remind the Lebanese of the extent of their disaster, and to highlight those who caused the ruin of their future, “because this deliberate corruption is the legitimate son of the sectarian political system that made the Lebanese divided against themselves.”
For his part, economist Walid Abu Suleiman considers that the findings of the World Bank report mimic the Lebanese reality, which “has lost the elements of resilience”, and points out that the “deliberate recession” means that the authorities have passed the stage of economic stagnation to what is worse in the absence of reforms.
When is the solution?
Kamal Hamdan believes that Lebanon needs many years before it exits the tunnel after about 20 months of the crisis, without specifying the size of the losses in the “black hole”, as he put it, that is, the Bank of Lebanon, and without ensuring that the “criminal audit” will achieve effective results.
As long as there is a vacuum in the decision-making centers – according to Hamdan – no obvious measures will be achieved to stop the collapse, such as restructuring public spending, lifting banking secrecy, dropping immunities, and forming a reform government from outside the system with exceptional powers.
Abu Suleiman adds to it the necessity of achieving reforms in the public sector, starting with the Electricity of Lebanon Corporation, then combating tax evasion and smuggling networks through illegal crossings, and forming a government capable of concluding an agreement with the International Monetary Fund to obtain financial aid.
As for George Corm, he considers that the problem lies in the continuation of the same policy of corruption, and that the solution does not pass through the successive ruling class with the Governor of the Banque du Liban, and without that it is possible to get out of the crisis by about 3 years by investing in local capabilities to achieve self-sufficiency in industry, agriculture and the information sector and to achieve self-sufficiency in industry, agriculture and the information sector. Government reforms and public institutions, and “otherwise Lebanon will continue to sink.”