A few months back, Lebanon made international headlines with the tragedy that took place in its capital port. Beirut’s port explosion was one of the countless consequences of the rotten corruption that has been plaguing the country for decades. However, the expulsion marked neither the beginning nor the ending of Lebanon’s suffering. The country is still going through an economical crisis while undergoing a deliberate form of depression, according to the World Bank analysis.
The world bank’s economists have announced that Lebanon’s economy shrunk by a huge 19.2 percent in 2020. They also expect it to decrease further by 13.2 percent next year. Moreover, experts project the country’s debt to GDP ratio to reach a jaw-dropping 194 percent by the end of 2020. Thus, they are fearing that more than half the population will fall into poverty by next year.
“Lebanon is in a deliberate depression with unprecedented consequences for its human capital, stability, and prosperity” the World Bank economists warned in their Lebanon Economic Monitor report “The Deliberate Depression”. “As things stand, Lebanon’s economic crisis is likely to be both deeper and longer than most economic crises”.
A full-blown crisis
All of the corruption, neglect, and financial mismanagement, as well as the war next door in Syria, have piled up over the years to create this full-blown crisis. Thus, hoping for a positive change, citizens started protesting in the streets to project their anger and desperation. However, despite their best efforts, nothing changed.
Then the Beirut explosion served to fire up the citizens’ rage once again, only to be met with empty promises from their leaders. Thus, for the past years, Lebanese citizens continue to suffer from chronic electricity shortages, the increasingly scarce foreign exchange, and the informal currency controlled by banks. All while the Lebanese pound continues to collapse further, losing more than 80 percent of its initial value. Furthermore, during the first 8 eight months of 2020, imports of merchandise shrank by 50 percent.
As for employment, the rates continue to decrease at alarming rates. The World Bank also stated that 40 percent of Lebanese youth are neither in employment nor in education or training. These facts dimming any hopes for a better future.
Desperate need of a plan
The “Lack of political consensus on national priorities severely impedes Lebanon’s ability to implement long-term and visionary development policies”, said Saroj Kumar Jha, World Bank Mashreq Regional Director. “A new Government needs to quickly implement a credible macroeconomic stabilization strategy with short-term measures to contain the crisis, as well as medium- to long-term measures to address structural challenges. This is imperative to restore the confidence of the people of Lebanon—particularly the youth—who have, time and again, shown resilience in the face of hardship, but who are currently suffering from the regressive burden of financial adjustments.”
Lebanon is bearing the consequence of its leader’s uncoordinated, non-comprehensive, and insufficient policy measures. Moreover, despite the unprecedented inflammation, monetary authorities have failed to address the exchange rate crisis. Their failure has only served to make the rich richer while having the country’s population collapse into poverty.
Moreover, since only the vulnerable citizens are suffering the consequences of the dire situation, it is safe to conclude that this depression is more of a deliberate nature.“Lebanon’s recession is likely to be arduous and prolonged given the lack of necessary policymaking,” said the World Bank.
In brief, Lebanon is in dire need of a plan to stand against this crisis. Though the path will be hard, leaders must start collaborating, or else the country will hit rock bottom.
Al Jazeera. (2020, December 1). ‘Deliberate depression’: World Bank’s dire warning on Lebanon. Business and Economy News | Al Jazeera. https://www.aljazeera.com/economy/2020/12/1/deliberate-depression-world-banks-dire-warning-on-lebanonLebanon | HumanitarianResponse. (2020). Humanitarian response. https://www.humanitarianresponse.info/es/operations/lebanonLebanon Economic Monitor, Fall 2020: The Deliberate Depression. (2020). World Bank. https://www.worldbank.org/en/country/lebanon/publication/lebanon-economic-monitor-fall-2020#:%7E:text=Lebanon%20is%20in%20a%20deliberate,at%20the%20Port%20of%20Beirut.Lebanon is in a Deliberate Depression with Unprecedented Consequences for its Human Capital, Stability, and Prosperity. (2020, November 30). World Bank. https://www.worldbank.org/en/news/press-release/2020/11/30/lebanon-is-in-a-deliberate-depression-with-unprecedented-consequences-for-its-human-capital-stability-and-prosperity