The Coronavirus that WHO declared as a worldwide pandemic on 12 March 2020, has surpassed national barriers in weeks and pressed hard on the livelihood of millions of people. However, the implications of the pandemic are not rightly reported and treated in low and middle-income countries due to the absence of a strong healthcare system, ICU beds, and personnel trained in critical care, among other reasons. According to the World Bank, Lebanon is a high middle- income middle-eastern country with a population of around 6 million. The shut-down of businesses announced in order to limit the spread of COVID-19 coupled with the looming economic crisis has taken a hard turn for the inhabitants of Lebanon. The estimates of the World Bank show that 45% of the population will end up in poverty while 22% in extreme poverty, as they head towards a famine.
The spark of an economic crisis in Lebanon started when politicians and successive governments borrowed excessively from domestic and foreign lenders. The usage of debt to fund the government budget along with the Central Bank maintaining high interest rates in order to make it easier for the gGovernment to borrow money hasve not proven to be pragmatic steps. The banks in Lebanon also profited fromwith the high interest rates for loans. These profits were split with shareholder politicians which eventually gave rise to corruption and national debt corroborating Lebanon as World’s third most indebted nation after Japan and Greece. The Lebanese government used half of its spending in servicing debt in 2019 and has a 152% debt-to-GDP ratio. A hHigh unemployment rate of 30% (more than 60% of the country’s youth was unemployed), inflation rate, and corruption among political elite members accumulated in the nation over many years.
On 17 October 2019, the Lebanese people took to the streets of Beirut to protest after the Government announced new tax reforms in order to pay off its burgeoning expenses. Protesters accused the political leadership of corruption and called for social and economic reforms. They also firebombed a dozen of branches of different banks. The inability of the Government to provide electricity and water and its failure to manage the country’s waste and economic crisis were pointed out. On the 13th day of the protest, the Prime Minister of Lebanon Saad Hariri announced his resignation. The collapse of small and medium enterprises, loss of jobs, and an increase in poverty and food insecurity placed the Lebanese people in a very tough situation. With an 80% loss in the value of Lebanese pound to a U.S dollar and an increase in prices of food by 56% since October, it turned out to be the worst economic turmoil since 1975-1990 civil war. The outbreak of the pandemic added to the misery of the people.
The first Coronavirus case in Lebanon was reported on 21 February 2020. The Lebanese government did a rather good job containing the virus in the initial few days. It responded quickly and in just 8 days after the first case, schools, bars, restaurants, domestic airports and, the only international airport in Beirut were closed. According to an article by BBC, the government executed a five- phased plan to reopen the economy starting from mid-March in order to balance risk with with the socio-economic necessity of the people. Lebanon has one of the most dynamic healthcare systems and is a regional leader among middle- income countries, however, the pressure of the economic recession and the unstable political climate weakened the healthcare system. After the restrictions were eased due to a drop in the number of new cases, an unforeseen spike of 100 new cases arose. The newly appointed Prime Minister, who took over the office in January, Hassan Diab accused people of negligence and lack of responsibility for ignoring guidelines on social distancing. Therefore, a 4- day nationwide lockdown was announced although supermarkets were open and the agricultural and industrial sectors were functioning. There was a fear of the spread of the virus in overcrowded refugee camps where Palestinian, Lebanese, and Syrian refugees live in a shortage of water for washing hands and no option of social distancing.
Even though the number of cases were increasing rapidly thereafter, the worst threat for the Lebanese people at the time was not the Coronavirus but the condition of hunger, poverty, and desperation they will be succumbed to with the continuation of lockdown and the economic crisis in the background. By the end of April, with no income and high prices that consumed large parts of their savings, 50% of the population had a hard time getting food. For the first time in a decade, bread prices increased by 33%. Prices of other subsidies like medicines and gas also spiked. An article by DW reported the incident of Ethiopian maids dumped outside the Ethiopian embassy in Beirut as their employers could not afford to pay them. Lebanon tried negotiating with the International Monetary Fund for relief funds, but with a record of unpaid debt, it could not get much monetary help.
The Lebanese government must start acting appropriately and stabilise their financial situation by reducing debt borrowing. Stringent regulations for banks must be executed and the demonstrations against the sectarian- based political system must be addressed. These steps can go a long way in pacifying the protestors during these uncertain times. The capability of the newly appointed Prime Minister Hassan Dian and his government is examined as they face the civil unrest in their country. Medical wards that treat Corona positive patients must be strengthened in capacity to restrict the spread of the virus and to be able to reopen small and medium businesses for the people at the earliest. A relief can be taken in the fact that non-government organizations like CARE International and AID Foundation have decided to resolve the situation and tend to the physiological, financial, and employment issues of people in Lebanon especially in the backward areas.
Written by: Ritu Jacob
- Sarah Al-Arshani, A massive economic crisis and the coronavirus pandemic are pushing Lebanon towards a famine (July 3, 2020). Available at https://www.businessinsider.in/international/news/a-massive-economic-crisis-and-the-coronavirus-pandemic-are-pushing-lebanon-towards-a-famine/articleshow/76767299.cms
- Coronavirus: Lebanon begins total ‘shutdown’ as cases increase (13 May 2020). Available at https://www.bbc.com/news/world-middle-east-52637725
- Kersten Knipp, Alla Juma, Lebanon faces coronavirus, poverty, hunger(28 April 2020). Available at https://www.dw.com/en/lebanon-faces-coronavirus-poverty-hunger/a-53270955