IGone are the days when Lebanon was nicknamed “the Switzerland of the Middle East”. Today, nearly 80% of the five million Lebanese live below the poverty line. In the space of two years, the number of poor people has doubled, the middle classes have practically disappeared. The unemployment rate reached 30%. And again, we are only talking about official statistics. At least 60% of jobs depend on the informal sector, which means in particular no social security coverage.
Living on a daily basis is a challenge: prices have skyrocketed. 150% inflation, 1000% on certain food products. Imagine that the baguette, at your bakery, goes from 1€ to 11€! Electricity cuts are daily, gasoline is a rare commodity. Many Lebanese survive only thanks to transfers sent by the diaspora living abroad: 14 million people, almost three times more than the population remaining in the country! The only ones to come out of it are the very rich, an oligarchy linked to political parties. They continue to get rich, especially because they have foreign currency.
The macro-economic situation is catastrophic according to the World Bank: it describes the situation in Lebanon as “worst economic crisis in the world since 1850”. The words are strong. Needless to say, the numbers are staggering. Debt reaches 200% of gross domestic product (GDP), while GDP continues to decline. For two years, the country has been in default of payment. The currency, the Lebanese pound, has lost 90% of its value. The banks are idling, authorized withdrawals are strictly regulated, there is no more money in the distributors. We could continue the inventory for a long time: all the indicators are red. L’Etat has become totally faulty. And the political parties are largely responsible for this situation. For decades, they have been taking advantage of the system, dividing up positions of power. And practice clientelism, largely on clan and religious bases, between Christians, Sunnis, and Shiites. It is therefore not surprising that disillusion prevails in the country. A high abstention rate is to be expected.
There is still a little hope thanks to an agreement in principle reached on April 7 with the International Monetary Fund (IMF). It provides for the release of an IMF loan of 3 billion dollars over four years. But this is only a theoretical agreement for now. The sums have not been paid. The IMF, as always, asks in return for structural reforms: currency fluctuation, tax reform, bank restructuring, capital control, reforms that are undoubtedly necessary in Lebanon. But the political parties still have to accept them. And still it is necessary that they do not worsen the situation, a reproach often made with the reforms imposed by the IMF in the indebted countries. In short, there is nothing to be optimistic about the near future of Lebanon.