The writer is a Research Fellow at the Institute of Strategic Studies Islamabad. She is a LUMS and Warwick alumnus

A hunger revolution in the offing

Lebanon can ill afford not to change. After all, crises alone do not change the world

Arhama Siddiqa May 18, 2020
On April 29, a video clip from protests in Lebanon went viral. It showed a fraught-eyed protester screaming at the soldiers that he was starving. One of the officers responds in equal dejection: “I am hungrier than you.”

Covid-19 has uncovered the fragility of the social security net across the Middle East. An increasingly redundant and hungry population in conjunction with opposing anti-elitist rhetoric and government negligence has all the dressings of a volatile situation. The situation in Lebanon has become so devastating that it is commonplace to see people searching for food in the trash.

Even before the pandemic, Lebanon had been immersed in multifaceted, interrelated challenges in the form of monetary, economic and fiscal trials. The arrival of Covid-19 further compounded the already faltering economic situation to a point where notwithstanding orders for a complete lockdown, shopkeepers kept their outlets open in a desperate bid to keep their businesses running. In the first week of March, the government notified the public that it would be defaulting on its debts.

On April 21, time hallowed grievances, worsened by the pandemic, forced people onto the streets in remonstration as parliament met for the first time in months. Since then, innumerable banks and central bank offices have been burnt down. In response, the Lebanese Armed Forces (LAF) have used what has been called out as “unjustifiable, excessive force”.

National debt is almost 170% of GDP. Liquidity deficit in the banking sector is mounting and the Lebanese pound is on the brink of collapse. More than 30% of the population is unemployed. Out of this figure, 60% comprises the Lebanese youth.

In Lebanon, factors such as regional conflicts, over-reliance on imports, decline in tourism, failed Ponzi schemes and large withdrawals of US dollars, all besmirched with mistrust in the banking system, caused the situation to reach the present crisis point. The resulting dollar shortage meant that the Lebanese pound plunged to half its value, rendering the official exchange rate of 1,500 pounds to a dollar, worthless. Presently, on the black market, one US dollar is being traded for 4,200 pounds.

On April 30, the government decided on a five-year plan which calls for drastic budgetary measures, including devaluing the official exchange rate along with reorganising the banking sector at the cost of shareholders and large depositors. Moreover, it envisions procurement of funds from international organisations. On May 1, the Lebanese government entreated the IMF for assistance. Detailed talks with the IMF team commenced from May 13.

In the background of the government’s proposed plan, fracases erupted between various parties specifically between Prime Minister Hassan Diab Hezbollah and the Governor of the Central Bank, Riad Salameh. On May 15, Lebanon’s financial prosecutor issued orders for the arrest of a director at Banque du Liban for suspected currency manipulation.

In Lebanon, the absence of a unified leadership and political will remain major impediments to taking any necessary reforms to stabilise the country’s future. Any assistance from the IMF will come with its own set of pre-conditions before any plan is formalised. What is needed is a comprehensive approach encompassing robust economic and fiscal measures in order to kickstart the economy. Given the present dearth of funds, foreign donors can help by extending technical advice on how Lebanon can expand its social protection programmes keeping in line with the fiscal measures it will take.

More important is that the government must keep the public informed. Failure to do so will only increase the existing trust deficit and herald the next wave of anger. Anger which could turn into an irrepressible hunger revolution. Hence, at this point, Lebanon can ill afford not to change. After all, crises alone do not change the world. What matters is how people respond to them.

Published in The Express Tribune, May 18th, 2020.

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