Amid unprecedented economic crisis, many Lebanese despair

Lebanon is hurting. And this time, say many Lebanese, who are no strangers to fortunes reversed, it's different.

"I have never seen people killing themselves because of the economic situation," said Elias Khalil, operations manager for a charity called Beit el Baraka where the number and profile of people seeking help has shifted dramatically in recent months.

Lebanon is in the midst of an unprecedented economic crisis rooted in corruption and mismanagement that is redrawing the middle class and sending many tumbling below the poverty line.

"You can see moms, dads, who are educated, who used to have jobs, who never begged for anything," said Khalil. "They are begging for a pot of milk or for the bag of rice just to feed their children, which is honestly devastating."

One of Beit el Baraka's projects is a "free supermarket" in Beirut that uses a voucher system in an effort to offer people the dignity of still being able to make choices when shopping for their food.

'There is nothing in this country'

Fadia Marji is one of them, a well-dressed woman who looks to be in her 60s, waiting for a bag of carrots. She says that all four members of her household, including two siblings, have recently lost their jobs.

"There is nothing in this country," she said. "No water, electricity or food. And with such crazy prices, living here is bad."

The World Bank estimated in November that about a third of Lebanese people live in poverty, and warned that could climb to 50 per cent with a further decline in the economic situation.

Khalil says the number of people seeking help from the charity has more than doubled since Lebanon started its slide into crisis last fall, followed by COVID-19 and the lockdown that came with it this year.

Lebanon has always been a country of extremes of vast wealth and great poverty, and of deep sectarian divides that have also at times allowed lines of compromise, making it possible for conservative and liberal cultures to co-exist in some fashion.

It's endured its own long civil war, regional conflicts including a 2006 war with Israel and the terrible blood-letting that has taken place next door in Syria and sent hundreds of thousands of refugees across the border over the past decade.

Somehow Lebanon has always seemed to find its way through to the other side. This time, people aren't so sure that will happen.

"Lebanon cannot muddle through this one," said Maha Yahya, of the Carnegie Middle East Center think-tank in Beirut. "This country is in an exponential economic collapse which is happening at a very accelerated pace right now."

Shortage of cash, electricity

Lockdown measures due to the pandemic have added to Lebanon's woes, but the seeds of the current crisis were planted long before, in complicated sectarian power-sharing agreements, endemic corruption and a government spending beyond its means.

A shortage of foreign cash reserves last October exposed what critics describe as a state-sponsored Ponzi scheme, with banks offering inflated interest rates to draw investment needed to pay off earlier investors.

WATCH | Pandemic pushes Lebanon further into financial crisis:

Pandemic pushes Lebanon further into financial crisis

4 years ago

Duration 5:02

Lebanon was in a financial crisis before the COVID-19 pandemic hit, but fresh lockdowns are pushing the country closer to economic collapse.

"It's the bankers, the central bank and the politicians who, to my mind, were all in bed together and played the game together," said Yahya.

"They played a very high-risk-stakes game with the money of ordinary Lebanese."

The Lebanese pound has lost nearly 80 per cent of its value against the U.S. dollar since October a disaster in a country that relies heavily on imports.

Government-imposed capital controls mean people can't access their savings except by dribs and drabs, and inflation has soared. The price of sugar has tripled. Even baby diapers have become unaffordable for some.

"Even the people that have money don't have access to get their money from the banks," said Soha Zaaiter, executive manager of the Lebanese Food Bank, which supplies NGOs like Beit el Baraka across the country.

"So now we are depending on people abroad to help us or to send us donations."

It doesn't end there. Lebanon's chronic power cuts have become even more chronic, with electricity sometimes out for 20 hours at a time, according to newspaper reports citing eyewitness accounts.

A popular cooking show has taken to tackling questions about how to preserve food when the fridge keeps going off.

And private hospitals are threatening to close their doors because they don't have the dollars needed to buy medicine or fuel to keep generators running.

"We have a huge problem of cash flow," said Suleiman Haroun, president of the Syndicate of Private Hospitals in Lebanon."We don't have enough money in our hands to run the day-to-day operations, and this has to be resolved otherwise, as we said previously, the hospitals are reaching a point where they will not be able to admit patients, only critical patients."

'Lebanon is finished'

Not surprisingly, those who can are trying to leave, prompting fears of an exodus of people who just last fall were out on the streets demonstrating for change and reform.

Micheline Aoun and her husband Bruno Melki were among them.

They live in an apartment with spectacular views over the Beirut skyline and are well aware of their privilege, saying they are still able to manage. But they've made a decision to move to Canada if they can.

They started the immigration application process last year as an option for the future. Now it's a firm decision and they'll leave as soon as they're approved.

"I don't see any hopes in the near term, honestly," said Aoun, a former foreign exchange trader. "Otherwise I would have stayed."

Melki, a dentist with his own practice, calls Lebanon a failed state.

"We've been on this way for more than 30 years. Since I was a child, I always listen to my grandfather say 'Tomorrow it will be better.' My father used to say, 'You will see, tomorrow is going to be better.'"

It's a promise they'd like to make to their own two children and keep. For them, that means leaving Lebanon.

"Everyone is thinking of emigrating," said Wissam Harb, an out-of-work musician who used to play at Beirut bars and restaurants that simply haven't been able to reopen amid coronavirus lockdownrestrictions.

Now he busks on the street for his dinner.

"Lebanon is finished," he said."It is impossible that anything [will] change."

Resistance to reforms

The International Monetary Fund has been in negotiations with the Lebanese government for weeks now, but insists that there can be no cash injection to help Lebanon without a tangible effort to root out corruption.

The European Union has delivered the same message.

"Unfortunately, the current political class is showing every resistance to carrying out the reforms needed," said Yahya. "What they're doing to Lebanon is just criminal."

Lebanon's post-war construct is based on an entrenched sectarianism often dynastic in nature with political positions and patronage power-shared between various religious sects including Christian groups, Druze and Shia and Sunni Muslims.

The offices of the president, prime minister and parliamentary speaker are traditionally held by a Maronite Christian,a Sunni Muslim and a Shia Muslim, in that order.

Complicating matters for Lebanon is the role of Hezbollah, the powerful Shia militant and political group backed by Iran, and on the list of proscribed terrorist organizations in a number of countries including Canada and the U.S.

Political analyst Makram Rabah has described Hezbollah and its leader Hassan Nasrallah as having an "ironclad grip" over Lebanon that makes "even the simplest matters overly complicated."

But he also says that plays into the hands of Lebanon's sectarian leaders by giving them an argument in favour of maintaining the status quo in order to preserve a fragile stability.

"Lebanon's current predicament can be partially credited to Hezbollah's hijacking of the Lebanese state and its spearheading of Iran's expansionist project in the region," he wrote in a recent article.

"But the crux of the problem lies in Lebanon's archaic political class that uses Hezbollah's weapons as a pretext to prevent and delay reforms that, if implemented, would strip the group of power."

But if things continue on their current course toward a complete economic collapse, some worry that an even harder sectarianism will introduce itself, paving the way for further conflict.

"The [government leadership] fall-back option is 'Yeah, OK, we go back to our little sectarian enclaves,'" said Yahya. "So every kind of political party's kind of saying it would provide for its own people, and they are all building up stocks of food."

Another worrying trend, she says, is a real clampdown on freedom of speech, with more journalists and activists being taken into custody over things published on social media.

Both Yahya and Zaaiter, of the Lebanese Food Bank, say they have been heartened by the activism of many people reaching out to help others in need during the crisis.

"A lot of small initiatives from university students, school students have contacted us to help, to offer their time to volunteer with us, and this is what made us proud," said Zaaiter.

But despite the sense of growing panic in the population and the force of those earlier anti-government protests, there is still a large absence in terms of a unifying force capable of lifting Lebanon out of its quagmire.

That leaves the leaders at the heart of the problem to resolve it.

"I think the leadership has a decision to make today," said Yahya.

"Either they privilege Lebanon over their own particular interests and recognize that they can only survive if Lebanon survives, or they continue what they're doing which is pulling the country down the drain, pushing it off the precipice."

For now, Lebanon remains a cry in the dark.