BEIRUT – Mohammad Kekhia looks at his nearly empty refrigerator. His 14-year-old son Hassan is by his side, looking with hope.
To Hassan’s disappointment, his father closes the door without retrieving any food. There is not enough. Not if they want something left for tomorrow.
“We are eating once every two days if we are lucky,” says Kekhia.
Lebanon is dealing with its most severe economic crisis in modern history. The lira has lost more than 80 percent of its value since October. Unemployment is on the rise. Prices are skyrocketing. Hunger is spreading in this small Mediterranean country, known worldwide for its cuisine.
The collapse of the Lebanese currency has had repercussions in neighboring Syria, which has long used Lebanon as a route to avoid sanctions. And the crisis has left Lebanon, a strategic country at the regional level, open to intervention by other countries as the rescue of the International Monetary Fund becomes more unlikely.
Relations have been further fractured with the United States, which supports the military and some parties in Lebanon, as well as the IMF’s largest donor. Hezbollah, an Iranian representative officially designated as a terrorist organization by the US, and a political group with an unmatched influence on the government, has claimed that the overwhelming shortage of Lebanese dollars is due to an American conspiracy.
Hezbollah leader Hassan Nasrallah calls for Lebanon to “look east” rather than west to get out of its economic quagmire, targeting China’s investments.
Within Lebanon, the problems involve not the East or the West, but the daily struggle to survive.
In the northern city of Tripoli, Kekhia had been living a basic life with his wife and three children. They have lived for the past seven years in a single room with a tin roof.
But now they are fighting against hunger and extreme poverty.
“Yesterday, our neighbors gave us a bag of bread. … We can’t even handle that ourselves, “said Kekhia, who used to work in construction.” Every other day, I go out and try to pick up some olives or some labneh. [thick yoghurt] so the kids can eat a little bit. “
Three months behind on rent, out of gas, stealing electricity from a neighbor to power his only light bulb and refrigerator, he and his family are desperate. They can no longer afford Hassan’s epilepsy medication.
The collapse of Lebanon’s economy has accelerated since anti-government protests began in October. With chants of “Revolution!” Hundreds of thousands took to the streets trying to topple decades of corrupt leadership that relies on sectarian politics and entrenched patronage networks to enrich themselves while creating great inequality.
The impact of the coronavirus pandemic closed businesses and left tens of thousands of unemployed. In March, the government defaulted on a $ 90 billion debt, revealing the extent to which all of the post-civil war economic infrastructure was built on what critics call a “ponzi scheme.”
Long time to come
For years, the central bank had been borrowing from private banks to maintain a fixed exchange rate of 1.507 Lebanese lira to the US dollar. This kept import prices low. But loans from private banks did indeed come from the deposits of ordinary Lebanese, who had been encouraged to deposit their money with promises of interest rates of up to 15 percent.
This expensive artificial 30-year-old peg to the dollar caused the house of cards to collapse as trust declined over the years, corruption grew, remittances from the diaspora declined, and Saudi Arabia’s support declined.
Eventually the government, banks, and people ran out of money.
In just over a month, the coin has lost 60 percent of its value. Kekhia has not found a job in eight months.
He used to earn between 25,000 ($ 16.50) and 50,000 liras ($ 33.17) per day. Today, that would be worth only between $ 2.70 and $ 5.55.
Food inflation has reached almost 200 percent. The prices of many items in the supermarket have tripled.
“We used to eat with this money,” said Kekhia. “Now there is no food. No work. Without medication.
Today, at the price of a kilo (2.2 pounds) of meat equivalent to $ 33, even the army no longer gives it to soldiers.
The disparity of wealth manifested itself before the crisis. Sports cars toured Beirut in areas full of tourists.
At the same time, the World Bank estimated that all other people in Lebanon’s 6 million people would live below the poverty line by the end of this year. Food security experts now estimate that three-quarters of the population will receive food by the end of the year.
Wages are worth nothing and decades of savings have disappeared. Middle-income workers, who make up the majority of the population, have become poor.
Facebook is awash with people trying to trade clothes, furniture, and other items so they can get baby formula, cooking oil, and other basics.
“All my life has been my work and my house, sacrificing myself for my children. I used to dream of giving them a good future, but that dream is dead now, ”said Mohammad Ghannoum, 42, as he picked up a box of food from a charity in Beirut.
Ghannoum has worked in a stainless steel refrigerator factory in Beirut since 1991, until reaching management.
“My life was excellent before, but now it seems to be going in reverse. It’s like I go to bed with my income of $ 1,200 a month and wake up with a value of around $ 100-150, “she said.
Like many here, he went from living comfortably to receiving food aid. His life savings are gone.
“My son is supposed to go to college next year,” he said. “I saved for years and had the money set aside specifically for that. I don’t even dream of being able to send it now.
Opportunities for the youth of Lebanon were already scarce. Last year, the unemployment rate was 11.4 percent. Last week, Labor Minister Lamia Yammine Douaihy announced that the unemployment rate had increased more than 30 percent.
NO END IN SIGHT
Foreign intervention is unlikely without government reform. With traditional donors like Iran, the United States, the United Kingdom, and the Persian Gulf nations, both hesitant to push money into a corrupt system and also grapple with their own economic problems, Lebanon pinned its hopes on a bailout from the International Monetary Fund.
But after weeks of discussions, there is no agreement in sight to even start negotiations.
The United States, the IMF’s largest donor, wants a bailout to be carried out on the condition that Hezbollah’s power be diminished.
The United States is also the largest donor to the Lebanese army, which is a delicate balancing act.
“We support Lebanon as long as they do the reforms right and are not a substitute state for Iran,” Secretary of State Mike Pompeo said last week.
In an unusual move, Hezbollah leader Hassan Nasrallah said last week that Hezbollah would be open to receiving aid from the United States despite calling him “an enemy” of Lebanon.
Pompeo’s comments followed Nasrallah’s comments that Lebanon had the opportunity to buy fuel from “a friend named Iran in exchange for Lebanese pounds.”
The secretary of state dismissed the claims as “unacceptable,” adding that the United States will do whatever is necessary to prevent Iran from sending crude oil anywhere.
There is little optimism for the future of the IMF talks, which have not even agreed on the balance of losses, let alone the negotiations, and have now stalled.
“The government refuses to implement any reform, any prerequisites the IMF had to continue the talks,” said Jad Chaaban, an economist at the American University of Beirut.
While the political elite is arguing without much consensus, the refusal to reform is crushing the Lebanese people.
The national power company no longer has the US dollars needed to buy fuel. Power outages across the country have increased up to 20 hours per day.
The country’s sectarian divisions, which tore it apart in the civil war, are reemerging in fear that the continuation of the economic collapse may fuel the violence again.
“The IMF negotiations will probably be canceled,” said Chaaban.
“Either we will have a locally brokered solution, which seems highly unlikely, or we will have a complete explosion [if Lebanon stays on this route] where we will see social unrest and violence, “he said.
“We are on the road to collapse.”
Additional reports from Christina Cavalcanti.
