Tag: Lebanon

In Lebanon, it is difficult to know what rock bottom is

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It is a humanitarian duty for the Council of the European Union to support the people of Lebanon and issue targeted sanctions against those who continue to promote their own interests to the detriment of the population, Zena Wakim writes.

Beirut’s celebrated nightlife has long had a rebellious air: a subversive challenge to conservative dogma, an antidote to rotten politics and a hedonistic emancipation from sectarian street battles. 

But now even the night has been stolen, increasingly affordable only to the rich. Rolling power outages ensure that the city is bathed in darkness. 

Meanwhile, the tourism ministry excitedly predicted 2.2 million visitors this summer. Most will be Lebanese who long since fled, briefly seeing family and friends still trapped in a quagmire.

In Lebanon, it is difficult to know what rock bottom is, perhaps that’s why EU policymakers fail to treat it as a priority. 

Fifteen years of civil war, an Israeli invasion, a Syrian occupation, over 250 unsolved political assassinations, an unparalleled refugee crisis, the world’s worst economic collapse since the 19th century and one of the biggest non-nuclear explosions in history.

The country is an unaccountable mafia state where over 80% of the citizens now live in multidimensional poverty and where ex-warlords turned politicians turned the state into a host they could feed on. 

Or, to quote the World Bank, the government has “consistently and acutely departed from orderly and disciplined fiscal policy to serve the larger purpose of cementing political economy interests.”

Dystopian scenes and parallel realities

Years of financial misconduct by the government culminated in 2019 when Lebanese citizens found their bank accounts effectively frozen, blocked from withdrawing US dollars and only allowed derisory amounts of Lebanese pounds — a currency that has now lost more than 98% of its value in four years. 

The pandemic and the Russian invasion of Ukraine compounded the financial misery prompting more power outages, medicine shortages and mass emigration. 

Some took to refugee boats across the Mediterranean. Some scavenged for food in dumpsters. 

Others conducted armed heists on banks to demand their own savings, becoming folk heroes in the process.

But amid these dystopian scenes, under cover of banking secrecy laws, the country’s politically connected were living in a parallel reality. 

While ordinary people, those not politically connected, were unable to access their funds, political elites transferred over $10 billion (€9.06bn) out of the country siphoning the pot of liquidities collectively owned by all depositors. 

It wasn’t too complicated since 18 of the 20 largest Lebanese banks are owned by politically exposed individuals.

A whole country running on cash is a win-win for kleptocrats

In lieu of a banking system, Lebanon now runs on cash. In lieu of people to form a thriving economy, Lebanon survives on remittances from abroad (accounting for 38% of GDP).

Using central bank-issued licenses, a few privileged firms in the country are allowed to process these money transfers, conveniently located in areas run by ruling parties. 

One of them is BOB Finance whose chairman is a long-standing ally of the Governor of the Central Bank and the head of the Banking Association. 

The worse the economy, the more urgent the need for remittances. More remittances mean higher profits for the elite’s crony companies.

It is just one of many schemes in Lebanon’s Ponzi economy, and another example of why the banking sector remains a quagmire. 

The cash economy creates a win-win situation for the kleptocrats. The longer Lebanon goes without an IMF plan, the more cash they make. 

And when, or if, said plan should come to fruition and the banking sector gets restructured, they will be the first to show up with the cash to acquire what remains of the economy, including its ailing banks. 

Their industrial-scale looting will go unpunished, and the parasitic networks will continue to strangle the country to destitution.

That is, unless Europe decides to get serious and punish the wrongdoers with travel bans, asset freezes and seizures.

Is there anything left to destabilise?

It is regularly heard in Brussels circles that Syria and Iran are much more of a priority than Lebanon and that sanctions should focus first on Damascus and Teheran. 

The reality is that handling Lebanon as an unrelated matter is an intellectual construct which can only be entertained by bureaucrats who do not grasp the extent of state capture in Beirut.

It has also been a long rhetoric that one shouldn’t rock the boat in Lebanon as long as the refugees are “there” and that any targeted sanctions on the Lebanese political elite might destabilise the country and the region. But is there anything left to destabilise?

In July 2021, the Council of the EU announced a framework for sanctions against Lebanese figures “undermining democracy or the rule of law in Lebanon” while assuming that the threat of sanctions would be deterring for the corrupt elite. 

The two years which elapsed since the framework was issued not only proved them wrong since the situation continues to deteriorate but it showed how much they underestimated the genius wit of those in power who was given a perfect window of opportunity to put their assets in safe heavens.

The cost of this poor bet is borne by the population alone.

It’s time for the party to be over

On 12 July, the European Parliament adopted a draft resolution calling for sanctions on Lebanese elites obstructing presidential elections and the Beirut port blast investigation and those who have enriched themselves to the detriment of the population. 

It now behooves the Council of the European Union to take action. For those that helped impoverish the country, it is time that the party stopped.

Heading the opposite direction from Lebanese visitors this summer will be the elites, jetting out to European properties bought with money looted from the state, perhaps with bags of cash to deposit in European banks. 

They may drive past Gemmayze, the lively neighbourhood for Beirut’s “real nightlife” peppered with bars, galleries, and restaurants that many now struggle to afford. 

It is also the place where the port explosion ripped through three years ago and for which still nobody has been held accountable. Impunity has robbed Beirut of its soul.

While civil society tracks corruption and proceeds to have them restituted to Lebanon, while the victims of the Beirut port explosion gather their last resources to push for justice, while courageous journalists and intellectuals risk their lives to seek accountability, it is a humanitarian duty for the Council of the European Union to support their fight and issue targeted sanctions against those who continue to promote their own interests to the detriment of the population.

Zena Wakim is an international lawyer and President of the Board of the Swiss Foundation Accountability Now, whose mission is to support Lebanese civil society in its desire to put an end to the impunity of corrupt leaders.

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Thousands in Iraq, Iran, Lebanon protest Koran desecration in Sweden

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Thousands of people took to the streets in a handful of Muslim-majority countries Friday to express their outrage at the desecration of a copy of the Koran in Sweden, a day after protesters stormed the country’s embassy in Iraq.

The protests in Iraq, Lebanon and Iran that followed weekly prayers were controlled and peaceful, in contrast to scenes in Baghdad on Thursday, when demonstrators occupied the Swedish Embassy compound for several hours and set a small fire.

The embassy staff had been evacuated before the storming, and Swedish news agency TT reported that they were relocated to Stockholm for security reasons.

For Muslims, any desecration of the Koran, their holy text, is abhorrent. 

Under scorching heat Friday, thousands gathered in Baghdad’s Sadr City, a stronghold of influential Iraqi Shiite cleric and political leader Moqtada al-Sadr, some of whose followers took part in the attack on the Swedish Embassy. They brandished Korans, burned the Swedish flag and the LGBTQ rainbow flag and chanted, “Yes, yes to the Koran, no, no to Israel.”

Iraqi Prime Minister Mohammed Shia al-Sudani had called on protesters and security forces to ensure that the demonstrations remained peaceful.

Read moreSwedish embassy in Iraq stormed

In the southern suburbs of Beirut, thousands more gathered at a protest called by the Iran-backed militia and political party Hezbollah, also brandishing copies of the holy book and chanting “with our blood, we protect the Koran.” Some burned Swedish flags.

Hezbollah leader Hassan Nasrallah in a video address Thursday night called on Muslims to demand their governments expel Sweden’s ambassadors. Iraq cut diplomatic ties with Sweden earlier that day.

“I invite brothers and sisters in all neighbourhoods and villages to attend all mosques, carrying their Korans and sit in them, calling on the state to take a stance toward Sweden,” Nasrallah said in the address, according to Lebanon’s state-run National News Agency.

In Iran, thousands marched in Tehran and other cities across the country, demonstrations that were aired on state television. In the capital, protesters gathered in the city center, shouting: “Death to the Americanised Sweden! Death to Israel! Death to enemies of the supreme leader!”

Student protesters pelted the Swedish Embassy building that was closed for the weekend, which in Iran is Friday and Saturday, with eggs and demanded the expulsion of the Swedish ambassador.

“The Koran talks to humans all the time, and its voice will never be stopped,” protester Fatemeh Jafari said. “They can never destroy the Koran! Even if they burn it, we will stand by it!”

The demonstrations come after Swedish police permitted a protest Thursday in which an Iraqi of Christian origin living in Stockholm – now a self-described atheist – threatened to burn a copy of the Koran. In the end, the man kicked and stood on the holy book outside of the Iraqi Embassy. He gave similar treatment to an Iraqi flag and to photos of Sadr and of Iran’s supreme leader Ayatollah Ali Khamenei.

The right to hold public demonstrations is protected by the constitution in Sweden, and blasphemy laws were abandoned in the 1970s. Police generally give permission based on whether they believe a public gathering can be held without major disruptions or safety risks. 

The reaction in Iraq was particularly virulent, although no embassy staff were injured since none were present. After protesters left the embassy, diplomats closed it to visitors without specifying when it would reopen. 

The state-run Iraqi News Agency reported that some 20 people were arrested in connection with the storming of the embassy. Among those arrested were an Associated Press photographer and two Reuters staff who were covering the protests. The detained journalists were released hours later without charges, following an order from the prime minister’s office.

Sudani, the Iraqi prime minister, ordered the expulsion of the Swedish ambassador and the withdrawal of the Iraqi charge d’affaires from Sweden.

Leaders in several Muslim-majority countries condemned the desecration of the Koran and summoned diplomats from Sweden to express their outrage. Iranian Foreign Minister Hossein Amirabdollahian wrote a letter to the UN secretary-general in protest. On Friday, the minister told state television that he wouldn’t accept a new Swedish ambassador to replace the previous envoy, whose term has expired until Stockholm takes a “strong” stance against the man who desecrated the Koran.

Pakistani Prime Minister Shehbaz Sharif called on the 57-nation Organisation of Islamic Cooperation to play a “historic role in expressing the sentiments of Muslims and stopping this demonisation.” 

Meanwhile, the Swedish Foreign Ministry conveyed to the Iraqi charge d’affaires that the storming of the embassy was “completely unacceptable,” according to the TT agency.

Thursday’s Koran desecration was the second to involve the Iraqi man in Sweden, identified as Salwan Momika. Last month, a man identified by local media and on his social media as Momika burned a Koran outside a Stockholm mosque during the major Muslim holiday of Eid al-Adha, triggering widespread condemnation in the Islamic world.

Read moreFrom militia leader to refugee: The backstory of the man who burned a Koran in Sweden

Koran burnings in the past have sparked protests across the Muslim world, some turning violent. In Afghanistan, the Taliban suspended all the activities of Swedish organisations in the country in response to the recent Koran burning.

A similar protest by a far-right activist was held outside Turkey’s Embassy in Stockholm earlier this year, complicating Sweden’s efforts to persuade Turkey to let it join NATO.

In June, protesters who support al-Sadr stormed the Swedish embassy in Baghdad over that Koran burning. 

Worshippers gathering for Friday prayers at the Stockholm mosque outside which last month’s Koran-burning took place expressed frustration that Swedish authorities allowed such actions. Imam Mahmoud Khalfi told the AP the situation made him feel “powerless.”

“You expect politicians and decisionmakers and police to show understanding … and try to find a solution. But it hasn’t happened, unfortunately,” he said.

He noted that other countries, such as neighbouring Finland, had found a way to combine freedom of speech with respect for religion. Unlike Sweden, Finland still has blasphemy laws.

“To let these extremists and criminals abuse the law and jeopardise peace in society and national security and Sweden’s reputation in the world, that is unsustainable,” he said. “We cannot understand why these lunatics are allowed to run wild.”

At the same time he added, “We are against all violent reactions and we have called on our members, to Muslims in Sweden, to react and act … in a peaceful way.”

(AP)

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Israel stages strikes in Lebanon, blasts reported in Tyre

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The Israeli military said it launched strikes in Lebanon early Friday, and a Lebanese TV station reported explosions in the southern port city of Tyre. The military did not not provide immediate details.

The announcement of the strikes came hours after militants from Lebanon fired nearly three dozen rockets at Israel, marking a further escalation in the region following violence at Jerusalem’s most sensitive holy site.

The Israeli military also struck targets in the Gaza Strip while Palestinian militants fired barrages of rockets into southern Israel early Friday, with the region edging closer toward war following two days of unrest at Jerusalem’s most sensitive holy site and a rare rocket attack from neighbouring Lebanon.

The fighting comes during a delicate time — when Jews are celebrating the Passover holiday and Muslims are marking the Ramadan holy month. Similar tensions spilled over into an 11-day war between Israel and Gaza’s Hamas rulers in 2021.

The current round of violence began Wednesday after Israeli police twice raided the Al-Aqsa Mosque in Jerusalem’s Old City. That led Thursday to rocket fire from Gaza and, in a significant escalation, an unusual barrage of nearly three dozen rockets from Lebanon into northern Israel.

As Israeli Prime Minister Benjamin Netanyahu convened his Security Cabinet late Thursday, the military struck what it said were four sites in Gaza belonging to Hamas.

Following the nearly three-hour meeting, Netanyahu’s office put out a short statement saying a series of decisions had been made.

“Israel’s response, tonight and beyond, will extract a heavy price from our enemies,” Netanyahu said in the statement. It did not elaborate.

Smoke rises from a fire after rockets fired from Lebanon struck Bezet, northern Israel, on April 6, 2023. Militants in Lebanon fired a heavy barrage of rockets at Israel, forcing people across Israel’s northern frontier into bomb shelters.
| Photo Credit:
AP

But almost immediately, Palestinian militants in Gaza began firing rockets into southern Israel, setting off air raid sirens across the region. Loud explosions could be heard in Gaza from the Israeli strikes, as outgoing rockets whooshed into the skies toward Israel.

The airstrikes came after militants in Lebanon fired some 34 rockets into Israel, forcing people across Israel’s northern frontier into bomb shelters and wounding at least two people.

The Israeli military said the rocket fire on its northern and southern fronts was carried out by Palestinian militants in connection to this week’s violence at the Al-Aqsa Mosque, where Israeli police stormed into the building with tear gas and stun grenades to confront Palestinians barricaded inside on two straight days. The violent scenes from the mosque ratcheted up tensions across the region.

There was no immediate Israeli action in Lebanon. The military said some 25 of the rockets were intercepted. But two people were wounded and property was damaged in several communities in northern Israel.

The rare attack from Lebanon raised fears of a wider conflagration as Israel’s bitter enemy, the Iran-backed militant group Hezbollah, holds sway over much of southern Lebanon.

In a briefing with reporters, Lt. Col. Richard Hecht, an Israeli military spokesman, said the army drew a clear connection between the Lebanese rocket fire and the recent unrest in Jerusalem.

“It’s a Palestinian-oriented event,” he said, adding that either the Hamas or Islamic Jihad militant groups, which are based in Gaza but also operate in Lebanon, could be involved. But he said the army believed that Hezbollah and the Lebanese government were aware of what happened and also held responsibility.

The mosque — the third-holiest site in Islam — stands on a hilltop revered by Jews as the Temple Mount, the holiest site in Judaism. The competing claims to the site have repeatedly spilled over into violence over the years.

No faction in Lebanon claimed responsibility for the salvo of rockets. A Lebanese security official, who spoke on the condition of anonymity because he was not authorized to speak to media, said the country’s security forces believed the rockets were launched by a Lebanon-based Palestinian militant group, not by Hezbollah.

Lebanon’s caretaker prime minister, Najib Mikati, condemned the firing of rockets from Lebanon, adding that Lebanese troops and U.N. peacekeepers were investigating and trying to find the perpetrators. Mikati said his government “categorically rejects any military escalation” and the use of Lebanese territories to stage acts that threaten stability.

Hezbollah, which has condemned the Israeli police raids in Jerusalem, did not respond for a request for comment on the rocket fire. Both Israel and Hezbollah have avoided an all-out conflict since a 34-day war in 2006 ended in a draw.

Netanyahu could be constrained by his own domestic problems. For the past three months, hundreds of thousands of Israelis have been demonstrating against his plans to overhaul the country’s judicial system, claiming it will lead the country toward authoritarianism.

Key military units, including fighter pilots, have threatened to stop reporting for duty if the overhaul is passed, drawing a warning from Defense Minister Yoav Gallant that Israel’s national security could be harmed by the divisive plan. Netanyahu said he was firing Gallant, but then backtracked as he put the overhaul on hold for several weeks. Critics could also accuse him of trying to use the crisis to divert attention from his domestic woes.

Netanyahu said that the domestic divisions had no impact on national security and that the country would remain united in the face of external threats.

Tensions have simmered along the Lebanese border as Israel appears to have ratcheted up its shadow war against Iranian-linked targets in Syria, another close ally of Iran, Israel’s archenemy in the region.

Suspected Israeli airstrikes in Syria in recent weeks have killed two Iranian military advisers and temporarily put the country’s two largest airports out of service. Hecht, the military spokesman, said Thursday’s rocket fire was not believed to be connected to events in Syria.

In Washington, the principal deputy State Department spokesman, Vedant Patel, said, “Israel has legitimate security concerns and has every right to defend themselves.”

But he also urged calm in Jerusalem, saying that “any unilateral action that jeopardises the status quo to us is unacceptable,” he said.

In Jerusalem, the situation remained tense at Al-Aqsa. For the previous two nights, Palestinians barricaded themselves in the mosque with stones and firecrackers.

Worshippers have been demanding the right to pray overnight inside the mosque — which authorities typically only permit during the last 10 days of the monthlong Ramadan holiday. They also have stayed in the mosque in protest over threats by religious Jews to carry out a ritual animal slaughter at the sacred site for Passover.

Israel did not try to prevent people from spending the night in the mosque early Friday — apparently because it was the weekend, when Jews do not visit the compound. But tensions could re-ignite Sunday when Jewish visits resume.

Israel bars ritual slaughter on the site, but calls by Jewish extremists to revive the practice, including offers of cash rewards to anyone who even attempts to bring an animal into the compound, have amplified fears among Muslims that Israel is plotting to take over the site

In this week’s violence, Israeli police fired stun grenades and rubber bullets to evict worshippers who had locked the doors of the building. Palestinians hurled stones and fireworks at officers. After a few hours of scuffles that left a trail of damage, police managed to drag everyone out of the compound.

Police fiercely beat Palestinians and arrested over 400 people. Israeli authorities control access to the area but the compound is administered by Islamic and Jordanian officials.

The violence at the site has resonated across the region, with condemnations pouring in from Muslim leaders.

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Israel bombs Lebanon and Gaza as Netanyahu promises enemies ‘will pay’

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Israeli military struck targets located in southern Lebanon and the Gaza Strip as its Prime Minister says it will ‘extract a heavy price from our enemies’. The country blames Hamas militants for rocket attacks on Israel.

Israel’s military hit sites in Lebanon and Gaza early on Friday, in retaliation for rocket attacks it blamed on the Islamist group Hamas, as tensions following police raids this week on the Al-Aqsa mosque in Jerusalem threatened to spiral out of control.

Loud blasts rocked different areas of Gaza, as Israel said its jets hit targets including tunnels and weapons manufacturing sites of Hamas, which controls the blockaded southern coastal strip, as well as a heavy machine gun used for anti-aircraft fire.

As daybreak neared, the military said it had also struck Hamas targets in southern Lebanon, where residents around the area of the Rashidiyeh refugee camp reported three loud blasts.

Two Lebanese security sources said the strike hit a small structure on farmland near the area from which the rockets had been launched earlier. They had no reports of casualties.

The strikes came in response to rocket attacks from Lebanon towards northern Israeli areas, which Israeli officials blamed on Hamas. The military said 34 rockets were launched from Lebanon, of which 25 were intercepted by air defence systems. It was the biggest such attack since 2006, when Israel fought a war with the heavily armed Hezbollah movement.

“Israel’s response, tonight and later, will exact a significant price from our enemies,” Prime Minister Benjamin Netanyahu said following a security cabinet meeting.

As the Israeli jets struck in Gaza, salvoes of rockets were fired in response and sirens sounded in Israeli towns and cities in bordering areas, however there were no reports of serious casualties.

The crossborder strikes came amid an escalating confrontation over Israeli police raids at the Al-Aqsa mosque compound in Jerusalem during the Muslim holy month of Ramadan, which this year coincides with the Jewish Passover holiday.

“We hold the Zionist occupation fully responsible for the grave escalation and the flagrant aggression against the Gaza Strip and for the consequences that will bring onto the region,” Hamas said in a statement.

Although Israel blamed Hamas for Thursday’s attack, which took place as Hamas head Ismail Haniyeh was visiting Lebanon, security experts said Hezbollah, the powerful Shi’ite group which helps Israel’s main enemy Iran project its power across the region, must have given its permission.

“It’s not Hezbollah shooting, but it’s hard to believe that Hezbollah didn’t know about it,” Tamir Hayman, a former head of Israeli military intelligence, said on Twitter.

Lebanon’s Prime Minister Najib Mikati issued a statement condemning any military operations from its territory that threatened stability but there was no immediate comment from Hezbollah. Earlier on Thursday, before the rockets were fired, senior Hezbollah official Hashem Safieddine said any infringement on Al-Aqsa “will inflame the entire region”.

UNIFIL, the UN. peacekeeping mission in Lebanon, said it had been in contact with the parties and said both sides had said they did not seek war but it said the situation risked escalation.

“We urge all parties to cease all actions across the Blue Line now,” it said, referring to the frontier demarcation between the two countries.

US condemns rocket attacks and mosque storming

Palestinian factions in Lebanon, which have a presence in the refugee camps, have fired sporadically on Israel in the past. But the border area has been largely quiet since the 2006 war with Hezbollah.

The US State Department condemned the launch of rockets from Lebanon and earlier strikes from Gaza and said Israel had the right to defend itself.

But it also expressed concern at the scenes in the Al-Aqsa mosque, where Israeli police were filmed beating worshippers during raids that officials said were to dislodge groups of young men who had barricaded themselves inside the mosque.

The Al-Aqsa compound in Jerusalem’s Old City is Islam’s third holiest site, where hundreds of thousands pray during Ramadan. Known to Jews as Temple Mount, the location of the two biblical Jewish temples, it is also Judaism’s most sacred site, although non-Muslims are not allowed to pray there.

It has long been a flashpoint for tensions. Clashes there in 2021 helped to trigger a 10-day war between Israel and Gaza.

There has been widespread anger among Palestinians in the occupied West Bank and Gaza over the police actions as well as condemnation from across the Arab world.

Late on Thursday, police said there were also disturbances in a number of Arab cities in Israel itself, including Umm el-Fahem, Sakhnin and Nazareth.

Plumes of smoke

The worsening security situation adds a further complication for Netanyahu’s religious-nationalist government, which has faced mass protests over its now-suspended plans to curb the powers of the Supreme Court.

However, opposition leader Yair Lapid said the government could count on cross-party support following the rocket attack and Netanyahu said Israelis stood behind the security forces.

“The internal debate in Israel will not prevent us from taking action against them wherever and whenever necessary. All of us, without exception, are united on this,” Netanyahu said.

In the aftermath of Thursday’s rocket attack, TV footage showed large plumes of smoke rising above the northern Israeli border town of Shlomi, with wrecked cars in the streets. Israel Airports Authority said it had closed the northern airports in Haifa and Rosh Pina.

“I’m shaking, I’m in shock,” Liat Berkovitch Kravitz told Israel’s Channel 12 news, speaking from a fortified room in her house in Shlomi. “I heard a boom, it was as if it exploded inside the room.”

The Israeli military said mortar shells were also fired across the border.

Amid fears that the confrontation could spiral further following a year of rising Israeli-Palestinian violence, the U.N. Security Council held a closed door meeting to discuss the crisis.

“It’s going to be important for everyone to do what they can to calm tensions,” US Deputy Ambassador to the United Nations, Robert Wood, told reporters on his way into the meeting.

Thursday’s attack followed a number of rocket launches towards Israel from Gaza, most of which were intercepted. Israel responded to the launches with airstrikes on sites linked to Hamas, which it holds responsible for any attacks from the blockaded coastal strip.

Speaking from Gaza, Mohammad Al-Braim, spokesman for the Palestinian Popular Resistance Committees, praised the rocket strikes from Lebanon, which he linked to the Al-Aqsa incidents, but did not claim responsibility.

He said “no Arab and no Muslim would keep silent while (Al-Aqsa) is being raided in such a savage and barbaric way without the enemy paying the price for its aggression.”

(Reuters)

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Small businesses in Lebanon struggle to stay afloat amid lira’s endless fall

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Lebanon’s ongoing economic crisis has left countless individuals and businesses to adapt to the harsh realities of the collapsing economy. FRANCE 24 met with Pierre, an officer in one of the state’s security agencies, and Houssam, the owner of a trendy café in Beirut, who explain the challenges to sustaining their livelihoods.

Before the crisis began in 2019, Pierre enjoyed a comfortable salary of 3 million Lebanese lira (equivalent to $2,000) per month, along with a range of social benefits. However, as the Lebanese lira dramatically collapsed from 1,500 lira to one US dollar (USD) in 2019 to more than 120,000 lira to one USD in 2023, his salary lost 98.5 percent of its value, leaving him in financial straits.

The state’s security agency reduced the working hours of its officers in response to the crisis, requiring Pierre to work only three days a week. Although the state recently tripled his salary to nine million lira, his monthly earnings now barely reach $100 — a mere five percent of his pre-crisis salary.

To make ends meet, Pierre took a second job at Houssam’s trendy café, which pays him in “fresh dollars” (i.e., strong currency, usually USD), ensuring he can sustain his wellbeing amid the country’s deteriorating economic situation and soaring inflation.

Meanwhile, Houssam El Eid, a small and medium-sized enterprise (SME) owner in Gemmayze, a trendy neighbourhood in Beirut, has faced his own set of challenges. His café is a popular spot for young Lebanese and students who flock to Gemmayze for its lively atmosphere, variety of dining options, and the fast internet service provided by Houssam’s café. 

The fast internet is especially valuable for those who need it for study or work, as it is not always available in everyone’s home. Gemmayze is known for its picturesque, narrow streets lined with historic buildings, fashionable boutiques, and vibrant nightlife, making it a must-visit destination for tourists and locals alike.

Houssam’s café in Gemmayze, Beirut, is known for its lively atmosphere, variety of dining options, and fast internet service. © Rawad Taha, FRANCE 24

The currency fluctuations forced Houssam to price his products and services in dollars, protecting his business from the volatile exchange rate. He has also had to navigate the challenges of increased expenses, such as dollarized electricity costs, and staffing difficulties, as skilled workers leave the country for better opportunities. Despite these hurdles, Houssam’s café continues to operate, serving as a lifeline for employees like Pierre who rely on the fresh dollar wages it provides.

“During the crisis, many workers moved from the city to rural areas. At some stage, businesses could not maintain their staff. However, pricing in dollars has allowed us to pay staff in dollars, even though we cannot pay the same salaries as before.”

Speaking on the impact of currency exchange and pricing on SMEs, El Eid says, “Before pricing in dollars, our business was affected negatively on an hourly basis due to the fluctuating exchange rate. The change in the exchange rate made us lose money.” 

“If I sold an item for one dollar,” El Eid explains, “I had to change the price of the exchange from 100,000 to 118,000 lira; if not, I would incur an 8,000 lira loss. However, updating the exchange rate during the day helped mitigate some of these losses.” Before this adjustment, businesses used to price every other week and wait for competitors, resulting in a poorly functioning market.

When asked about the survival of SMEs in Lebanon, El Eid says, “The survival of SMEs depends on various factors. For instance, small markets, grocery stores, and even supermarkets survive because people will always need to buy essentials, even though their spending habits may have changed. The situation differs in coastal areas compared to villages and varies across different sectors and the target audience.”

He notes that high-end and elite brands in the Food & Beverage sector retained their customer base, while smaller shops and commercial chains catering to the masses have been slightly affected. Still, those who were hit the most were businesses catering to the middle class and the youth, as thousands left the country and emigrated.

El Eid also addresses the electricity crisis and its impact on SMEs: “The electricity crisis in Lebanon has been a massive burden, with businesses now paying thousands of fresh dollars, which is not reflected in the prices they can sell at. Previously, electricity and utilities in the Food & Beverage sector should have constituted a maximum of five percent of total sales, but now these costs have risen to above 10 percent.”

He adds that SMEs suffer, and staying in the market is more challenging as a service, that used to cost $10 now costs $7 or less because people can no longer afford it, despite businesses having higher running costs.

El Eid emphasizes the need to define Lebanon’s role in the economy and its prime offerings for the region and the world, questioning what Lebanon should focus on and whether tourism and the crisis-hit banking sector should continue to play a central role or perhaps other sectors should be further developed.

He concludes, “Everything is based on the economy, and Lebanon will continue to struggle without a clear economic direction. Defining Lebanon’s economic identity and creating a strong plan, roadmap, and reforms, and a new political class will be essential for the country’s future progress.”

Pierre shares a similar vision to Houssam’s, and their stories are not unique, as many Lebanese citizens have been forced to find additional sources of income and adapt their businesses due to the economic downturn

“Although my financial situation is dire, I feel it’s my duty to continue serving my country in one of its security agencies,” Pierre said. 

“I remain hopeful that the situation will eventually improve, but deep down, I know that the ruling political elite is corrupt and that real change is desperately needed. I wish the October 17, 2019 protests had been able to bring about real change, but for now, I have no plans to leave the country and leave the rest of my family here.”

 

Lebanon's ongoing economic crisis has left countless individuals and businesses to adapt to the harsh realities of the collapsing economy.
Lebanon’s ongoing economic crisis has left countless individuals and businesses to adapt to the harsh realities of the collapsing economy. © Rawad Taha, FRANCE 24

 

This situation is particularly challenging for those who used to rely on a single, stable income from the government. The crisis has also led to a sharp increase in unemployment rates and the closure of numerous small and medium-sized enterprises (SMEs), exacerbating the financial hardships faced by the country’s population.

As Lebanon struggles to find a solution to its economic woes, individuals like Pierre and Houssam continue to adapt to the new reality, taking on extra work, seeking alternative sources of income, and finding innovative ways to keep their businesses afloat. The resilience of the Lebanese people is evident as they navigate through these challenging times. Still, a long-term solution to the country’s economic problems remains crucial to ensure a better future for all.

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Lebanon adopts ‘dollarization’ as currency, economy crumble

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When Moheidein Bazazo opened his Beirut mini-market in 1986, during some of the fiercest fighting in Lebanon’s civil war, he didn’t expect it to thrive. But several years later, he had shelves full of food and needed 12 employees to help him manage a bustling business.

Those days are over. Bazazo now mostly works alone, often in the dark to reduce his electric bill. Regular customers are struggling to make ends meet, and as they buy less so does he, leaving some shelves and refrigerators bare.

Moheidein Bazazo changes price tags from Lebanese pound to the U.S. dollar in a shop in in Beirut, Lebanon, Wednesday, March 1, 2023. Lebanon began pricing consumer goods in supermarkets in U.S. dollars Wednesday as the value of the Lebanese pound hit new lows.
| Photo Credit:
AP

With the Lebanese economy in shambles and its currency in free fall, Bazazo spends much of his time trying to keep up with a fluctuating exchange rate. Businesses like his are increasingly leaning on one of the world’s most reliable assets — the U.S. dollar — as a way to cope with the worst financial crisis in its modern history.

“I once lived a comfortable life, and now I’m left with just about $100 after covering the shop’s expenses” at the end of the month, Bazazo said, crunching numbers into a calculator. “Sometimes it feels like you’re working for free.”

The Lebanese pound has lost 95% in value since late 2019, and now most restaurants and many stores are demanding to be paid in dollars. The government recently began allowing grocery stores like Bazazo’s to start doing the same.

While this “dollarization” aims to ease inflation and stabilize the economy, it also threatens to push more people into poverty and deepen the crisis.

That’s because few in Lebanon have access to dollars to pay for food and other essentials priced that way. But endemic corruption means political and financial leaders are resisting the alternative to dollarization: long-term reforms to banks and government agencies that would end wasteful spending and jump-start the economy.

Other countries like Zimbabwe and Ecuador have turned to the dollar to beat back hyperinflation and other economic woes, with mixed success. Pakistan and Egypt also are struggling with crashing currencies but their economic crises are largely tied to an outside event — Russia’s war in Ukraine, which has caused food and energy prices to soar.

Lebanon’s woes are much of its own making.

As the country felt the impacts of the COVID-19 pandemic, a deadly Beirut port explosion in 2020 and Russia’s invasion Ukraine, its central bank simply printed more currency, eroding its value and causing inflation to soar.

Prices are seen marked in U.S. dollar instead of the Lebanese pounds in a store in Beirut, Lebanon, Wednesday, March 1, 2023. Lebanon started pricing consumer goods in supermarkets in U.S. dollars Wednesday as the value of the Lebanese pound hit new lows.

Prices are seen marked in U.S. dollar instead of the Lebanese pounds in a store in Beirut, Lebanon, Wednesday, March 1, 2023. Lebanon started pricing consumer goods in supermarkets in U.S. dollars Wednesday as the value of the Lebanese pound hit new lows.
| Photo Credit:
AP

Three-quarters of Lebanon’s 6 million people have fallen into poverty since the 2019 crisis began. Crippling power cuts and medicine shortages have paralyzed much of public life.

Currency shortages prompted banks to limit withdrawals, trapping millions of people’s savings. It’s led some in desperation to hold up banks to forcibly take back their money.

The damage of the last few years was magnified by decades of economic mismanagement that allowed the government to spend well beyond its means. The head of the country’s Central Bank was recently charged with embezzling public funds and other crimes.

The pulverized Lebanese pound fluctuates almost hourly. Though officially pegged to the dollar since 1997, the pound’s value is dictated now by an opaque black market rate that has become standard for most goods and services.

Last month, its value fell from about 64,000 pounds to the dollar to 88,000 on the black market, while the official rate is 15,000. Making things worse for a country reliant on imported food, fuel and other products priced in dollars, the government recently tripled the amount of tax — in Lebanese pounds — that importers must pay on those goods.

This will likely lead to more price hikes. For small businesses, it could means selling products at a loss just minutes after stacking them on the shelves.

Dollarization could give the impression of greater financial stability, but it also will widen already vast economic inequalities, said Sami Zoughaib, an economist and research manager at Beirut-based think tank the Policy Initiative.

“We have a class that has access to dollars … (and) you have another portion of the population that earns in Lebanese pounds that have now seen their income completely decimated,” Zoughaib said.

The shift to a more dollar-dominated economy happened not by government decree, but by companies and individuals refusing to accept payment in a currency that relentlessly loses value.

First, luxury goods and services were priced in dollars for the wealthy, tourists and owners of private generators, who have to pay for imported diesel. Then it was most restaurants. And now grocery stores.

Caretaker Economy Minister Amin Salam said the Lebanese pound was “used and abused” over the past three years and that dollarizing grocery stores will bring some stability to fluctuating exchange rates.

As more people and businesses reject the local currency, the dollar gradually becomes the de facto currency. The lack of trust in the Lebanese pound has become irreversible, said Layal Mansour, an economist specializing in financial crises in dollarized countries.

“People are fed up with the fluctuation of the dollar rate, and having to spend lots of time changing it, so practically, on a societal level, it’s better to use dollars,” Mansour said. “This is the end of the Lebanese pound as we know it.”

Without a strategy to address the economy’s underlying problems, the government “is allowing this to happen,’’ said Lawrence White, an economics professor at George Mason University.

Dollarization means the Central Bank can’t keep printing currency that fuels inflation, and having a more reliable currency might create more confidence for businesses. But many people could be further squeezed if Beirut officially adopts the greenback as its currency.

Millions in Lebanon who tolerated the dollarization of luxury items may not respond similarly to groceries, whose prices were already surging at some of the highest rates globally.

Over 90% of the population earns their income in Lebanese pounds, according to a 2022 survey by the International Labor Organizaton and the Lebanese government’s statistics agency. Families that receive money from relatives abroad spend much of it keeping the lights on and covering medical expenses.

Moheidein Bazazo changes price tags from Lebanese pound to the U.S. dollar in a shop in in Beirut, Lebanon, Wednesday, March 1, 2023. Lebanon began pricing consumer goods in supermarkets in U.S. dollars Wednesday as the value of the Lebanese pound hit new lows.

Moheidein Bazazo changes price tags from Lebanese pound to the U.S. dollar in a shop in in Beirut, Lebanon, Wednesday, March 1, 2023. Lebanon began pricing consumer goods in supermarkets in U.S. dollars Wednesday as the value of the Lebanese pound hit new lows.
| Photo Credit:
AP

They would have to be paid in dollars to adequately adjust, which most businesses and employers, especially the Lebanese state, are short on.

Public school teachers have been on strike for three months because their salaries barely cover the cost of gasoline to commute. Telecom workers are threatening walkouts because their wages have not been adjusted to the Lebanese pound’s falling value.

Lebanon is nowhere near implementing the kinds of reforms needed for an International Monetary Fund bailout, such as restructuring banks and inefficient government agencies, reducing corruption, and establishing a credible and transparent exchange-rate system.

Zoughaib, the Beirut economist, said he fears the absence of sound policy and economic reforms means that dollarization will likely only deepen poverty, making it even more difficult for families to pay for health care, education and food.

Bazazo, the market owner, acknowledges that pricing in dollars will help him manage his finances and cut a small portion of his losses but worries it will drive away some customers.

“Let’s see what happens,” Bazazo said, sighing. “They’re already complaining.”

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Families of Beirut blast victims slam infighting over investigation

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The relaunching this week of the investigation into the August 2020 Beirut port blast triggered an unprecedented impasse with the lead judicial investigator and top prosecutor slapping charges against each other. Critics called it a “farce”, but for families of the victims still seeking justice, the parody is wrenching and frustrating.

The investigation into the August 4, 2020, Beirut port blast, which killed 220 people, descended into a legal tug of war this week between Lebanon‘s prosecutor general, Ghassan Oweidat, and Judge Tarek Bitar, the investigating judge assigned to probe one of the largest non-nuclear blasts in history.

The latest twist in the long-running quest for accountability began on Monday, January 23, when Judge Bitar relaunched the investigation, which had been suspended for more than a year due to legal actions launched against him by members of the Lebanese political establishment.

Judge Bitar’s decision to relaunch the investigation was as unexpected as it was fractious since the next day, he issued summonses to several leading figures in Lebanon’s political and security establishment.

The men who were summoned for questioning from February 6 included Ali Hassan Khalil and Ghazi Zaiter, two former ministers from Amal, a Shiite political party led by longtime parliamentary speaker Nabih Beri, a powerful figure dubbed Lebanon’s “untouchable” political player.

The other heavyweights on the chargesheet included former Lebanese prime minister, Hassan Diab, Tony Saliba, head of state security and an ally of the country’s former president Michel Aoun, as well as Abbas Ibrahim, head of general security who is considered close to the Shiite power axis comprised of Hezbollah and Amal.

Attorney general files charges against judge

But it was Judge Bitar’s decision to take legal action against Oweidat, the prosecutor general, that sparked a storm that has highlighted the levels of impunity, corruption and state collapse that has plunged Lebanon into a series of devastating crises.

Oweidat had earlier recused himself from any involvement in the blast probe as Judge Bitar had issued an arrest warrant for his brother-in-law, Zaiter, the Amal politician who was once Lebanon’s public works minister.

According to a judicial official quoted by AFP, in 2019, Oweidat had supervised an investigation by the security services on cracks in the Beirut port warehouse where hundreds of tonnes of ammonium nitrate were stored without safety measures since their unloading in 2013. The explosion of the ammonium nitrate led to the August 2020 port blast.

The tragedy – which injured thousands in addition to the 220 killed and destroyed downtown Beirut – is attributed in large part to negligence, corruption and a lack of accountability among Lebanon’s ruling class.

On Wednesday, Attorney General Oweidat responded to his own indictment by ordering the release of the 17 people detained without trial since the port blast and filed charges against Judge Bitar for “rebellion against justice” and the “usurpation of power”.

The judge was also banned from leaving Lebanese territory and summoned for questioning on Thursday morning, said the Prosecutor General of the Court of Cassation in a statement to AFP.

Responding to the summons, Judge Bitar told reporters on Wednesday he had no intention of appearing for questioning. “I am still in charge of the investigation and I will not relinquish this case. The prosecutor has no authority to prosecute me,” he told reporters.

By Thursday, the crisis had escalated with demonstrators gathering outside the justice ministry in Beirut to protest Oweidat’s “coup” against Judge Bitar.

As protesters attempted to force their way into the justice ministry, police used batons and tear gas, injuring at least eight people, according to local media reports.


Opposition MPs who arrived at the ministry to hold a meeting with Justice Minister Henry Khoury said they were accosted by Khoury’s bodyguards, who tried to take their mobile phones.

Meanwhile one of the 17 detainees released under Oweidat’s orders arrived in the US on Thursday, according to Lebanese daily Naharnet.

Mohammed Ziad al-Ouf, director of the security and safety department and a dual US-Lebanese national, left the country despite travel bans on all the released detainees, the report added.

First judge fired, second faces pressure

The latest developments, slammed as a “judicial farce” by Amnesty International and Human Rights Watch, has sparked the ire of the families of the victims, who were initially delighted by the relaunching of the Beirut port blast investigation.

“Just 13 months ago, we were fighting for justice to resume its course, so to see Judge Bitar back in action was a great surprise. His courage gave us hope in the Lebanese justice system, even if we never had much confidence in this criminal regime which has, from the beginning, done everything to neutralise the judge,” said Paul Naggear, father of Alexandra, one of the youngest victims of the Beirut blast, in an interview with FRANCE 24.

More than two years after the port blast, the investigation has been stymied by political interference in the judicial process.

Shortly after the blast, the justice minister appointed Judge Fadi Sawan to lead the investigation. But Sawan was taken off the investigation in February 2021 after Oweidat’s brother-in-law Zaiter and his fellow Amal colleague, Khalil, complained that the judge had overstepped his powers.

When Judge Bitar was appointed as a replacement, he also ran into trouble when he attempted to interrogate senior political figures.  Suspects swamped Lebanon’s courts with legal cases seeking the new lead investigator’s removal over alleged bias.

In September 2021, a senior Hezbollah official even threatened to “debunk” Judge Bitar on the grounds that he was politicised, while rumours were circulating that the Shiite pro-Iranian party was involved in the storage of the ammonium nitrate which caused the port blast.

On October 14, armed clashes left six people dead in Beirut on the sidelines of a demonstration organised by Hezbollah and its ally, Amal, in front of the justice ministry to demand Judge Bitar’s removal from the probe.

‘Rule of law is dead in Lebanon’

But Judge Bitar enjoys the confidence of many Lebanese, including the families of the victims who consider him a man of integrity and courage.

“I expected a counterattack by the prosecutor [Oweidat], but not on this scale, and certainly not to put an end to the rule of law, or what was left of it,” explained Naggear. “Because that’s what it’s all about, the rule of law is dead in Lebanon. Faced with the implosion of one of the last institutions that still seemed to work, it’s no longer Judge Bitar or even the explosions of August 4 that are at stake, but everyone and all the ongoing investigations”.

Oweidat’s “offensive against the judge”, Naggear continued, “is actually aimed at those who still believe in justice in this country, and it shows that Lebanon is definitely turning into a banana republic”.

Despite all the difficulties, Naggear wants Judge Bitar to keep at the job and not throw in the towel when “he’s faced with the prosecutor who is acting as a pawn of the regime, even though he had recused himself from the case”.

Judge Bitar’s handling, so far, of a very complex and politicised investigation has won Naggear’s respect. “I have confidence in him because he has worked tenaciously since he was appointed,” explained Naggear. “He has not made any mistakes so far, and he does not hesitate to tackle the big fish. One feels that he has the support of the international judges who are following the case. I notice, for example, that he has taken action again in the last few days after the visit of French judges”.

On January 18, Judge Bitar met with a French judicial delegation that came to Lebanon to investigate the death of two French citizens during the tragedy.

‘Heading towards a direct confrontation’

The families of the victims, however, are worried about what will happen next. Will Judge Bitar be dismissed? How can he continue his work if he can’t get his decisions implemented?

“To be honest, we don’t have many cards left to play from now on except to put maximum pressure on the prosecutor to realise the scope and consequences of his actions that violate our cause and the very essence of justice in Lebanon,” confessed Naggear. “It’s really the limit to see the judge in charge of the investigation being prosecuted by those he decided to prosecute in the investigation!”

Like many families of the victims, Naggear has pegged his hopes for justice on the complaints filed outside Lebanon, where the judicial system is considered too dependent on a political class that has refused to allow an international investigation into the tragedy.

On July 13, relatives of the victims filed a $250 million lawsuit in a Texas court with the support of Accountability Now, a Swiss-based activist group, against TGS ASA, a US-Norwegian geophysical services group, for contracts it reportedly made with Lebanese authorities connected to the port.

TGS ASA is allegedly linked to the chartering of the ship Rhosus, which contained the tonnes of ammonium nitrate that exploded in August 2020.


“We are heading towards a direct confrontation if Judge Bitar is dismissed from the case,” said Naggear. “We must mobilise very quickly to prevent this from happening and to alert the international community to the fact that Lebanon has become a totally failed state,” said Naggear.

This article is a translation of the original in French.

 

 

 



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Lebanese President Aoun leaves office and legacy of economic meltdown

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Lebanon’s outgoing President Michel Aoun vacated the palace of Baabda on Sunday, leaving a void at the top of the failing country.

The 89-year-old Christian presided over the state’s financial meltdown and the deadly Beirut port explosion that killed over 200 people in 2020.

Leaving office with no one in line to replace him also leaves Lebanon facing a constitutional crisis.

But despite the troubled legacy thousands of supporters turned out to wave him off after hearing him acknowledge the struggle ahead.

“The situation requires a huge effort,” Aoun told the crowd. “You know how much Lebanon and you yourselves have lost. Without this effort, we cannot put an end to our suffering. We cannot salvage Lebanon out of this deep pit.”

Four sessions in Lebanon’s fractured parliament have failed to reach a consensus to replace Aoun and the cabinet is now operating in a caretaker capacity. 

One bright spot in his legacy is that In his final week as president he signed a US-brokered deal delineating Lebanon’s southern maritime border with Israel – a modest diplomatic breakthrough that would allow both countries to extract natural gas from maritime deposits.

Aoun said the deal paved the way for gas discoveries that could be Lebanon’s “last chance” at recovering from a three-year financial meltdown that has cost the currency 95% of its value and pushed 80% of the population into poverty.

Lebanon has otherwise made slow progress on a checklist of reforms required to gain access to $3 billion in financing from the International Monetary Fund.



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