Lebanon: Impact on civil conflict as economic downturn triggers violence

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The lower scenes threaten to turn for the worse.

Increasingly, Lebanese officials and politicians are raising the profile of internal conflict. This comes just 31 years after the end of the grim 15-year civil war. That black chapter was brought to an end by a modus vivendi that critics say is organized government corruption, ending with a financial downturn that once again led Lebanon to extinction.

In a statement to CNN this week, Lebanon caretaker interior minister Mohammed Fahmi said there was a higher likelihood of “security breaches such as explosions and assassination attempts” in the country.

That fear is raised by many high-profile politicians who announce talks with intelligence representatives. In a televised speech on Wednesday, Hezbollah’s Iranian-backed general secretary Hassan Nasrallah also warned of civil war, drawing a bleak prognosis of the security situation, and calling on the country’s broken political class to come together to push the financial tailspin.

But on the streets of Lebanon, that one political elite is largely neutral. Even strong supporters of the mainstream parties will want to rethink the country’s confessional power-sharing system, which allocates seats according to a sectarian group. MPs publicly admit they are failing, and some say they should, too, resign. Leftist groups, such as the communist party, have called for a “rise” in the country’s popular uprising, which began in October 2019 with the aim of abolishing the ruling class.

President Michel Aoun (L) will meet with Prime Minister-Designate Saad Hariri at the main palace on March 18.
But there is little disagreement about the future of governance in the country. The cabinet creation process has been closed for four months over disputes between Prime Minister-designate Saad Hariri and President Michel Aoun. Hariri has vowed that his future government would stop the collapse of Lebanon and go back with the International Monetary Fund (IMF), which last year suspended talks with the government about aid.
But Hariri has worked hard to bring about economic reforms at a time when his popular command has dwindled dramatically. It also seems that the political parties that have emerged in recent years are not in an effort to replace the elite with the action to disperse the status quo.
That leadership crisis has disrupted Lebanon’s financial sentiment at an astonishing rate. In their Fall 2020 report, the World Bank described Lebanon’s economic downturn as “deliberate.”

The report gives a detailed account of what that means: Rapid increase in economic growth, tank money, small investors with the lion’s share of economic losses, a dramatic decline in the country’s resources including its human capital, with a poverty rate exceeding 50% in 2021.

Woman and daughter begging on Beirut commercial Hamra Street on March 16th. Tuesday, March 16, 2021. More than half the population now lives in poverty.
An army officer pushes back protesters who were trying to break down a bank door in a protest calling on local banks to allow people to withdraw their money on 26 February.

The crash could have been largely avoided, the World Bank says. Lebanese leaders – to the dismay of even some of the most senior observers – have refrained from implementing policies that could alleviate the recession.

The state has done little to reduce poverty. No formal capital controls were imposed, nearly a year and a half after banks began restricting cash withdrawals to investors on a discretionary basis. It is this practice that prompted the capital travel of the wealthy, while the working and middle classes looked helpless losing their investments losing most of their true value.

The country also lacks an official exchange rate platform, leaving the lira plummeting at the mercy of black markets and the ever-present ability to handle money.

Buildings weave in darkness during a blackout in Beirut on 5 July 2020.

The economic outlook is calming almost every day. The country’s black market currency has now lost 90% of its value in October 2019. As Lebanon burns through its foreign sources, caretaker energy minister Raymond Ghajar has raised the potential for 24/7 power cuts at press time this month, immersing the country in “total darkness . ”

The country’s lifeboat subsidies, food and medicine, could soon disappear. This week, care prime minister Hassan Diab said Lebanon would suspend these subsidies and said most of them could only be held until June.

Loss of subsidies could be the real time that Lebanon threatens to take over to Venezuela – like conditions, exacerbating food, fuel and medical shortages.

Families living on a minimum wage – now less than $ 50 a month – will not be able to afford basic food staples like inflation skyrockets. Existing tight security forces, which have to deal with the harassment of their status and new file, need to deal with rising crime rates and the potential for long-simmering political tensions to coming to an end.

The only hope is that a near political solution is possible that will result in effective and efficient government. But for most who are familiar with the political history of the political elite, this is like a dream on a pipe. Without leadership, the economy could continue to move towards the unknown.

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