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Structural crisis in Lebanon: "The country is organizing to survive as best it can"

2022-01-19T17:13:48.994Z


FIGAROVOX/TRIBUNE - While Lebanon is experiencing an unprecedented political and economic crisis since August 2020, the diaspora fund, aid from international and local NGOs and the burst of "made in Lebanon" hold the country at arm's length, explains Professor Samir Ayoub.


Former student of Saint-Joseph University in Beirut and Paris II-Assas University, Samir Ayoub, Franco-Lebanese, is a professor of management sciences and director of the Aix en Provence campus of

ESSCA School of Management .

Lebanon has been experiencing an unprecedented economic crisis since 2018. The Lebanese pound has lost 95% of its value, the price of basic necessities has multiplied by 10 and the GDP of the Land of Cedars has increased, according to the World Bank, from 55 billion in 2018 to 19 billion in 2021. 80 % of the population now lives below the poverty line and certain basic consumer products have become inaccessible to a good part of the population.

This economic crisis was accentuated by the health situation linked to Covid-19, then by the explosion of the port of Beirut in August 2020, but above all by the inability of the political class in power to reform the country, which continues to turn slow motion.

The new government does not meet and no consensus on the reforms to be put in place has so far been found.

The only explanation for this is the relentlessness with which the ruling caste works to preserve a corrupt political system that benefits only a few.

After drastically lowering their way of life, the Lebanese are now organizing themselves in "survival" mode to achieve, as the days go by, to make ends meet.

The vital role of the diaspora

There are no official statistics on the number of Lebanese expatriates or nationals of Lebanese origin living abroad, but this figure is close to double the current population of the country.

This diaspora is divided between on the one hand those who historically reside or were born abroad and on the other hand those, very often highly qualified (teachers, doctors, engineers, etc.), who since 2019 have deserted Lebanon in search of professional opportunities in Europe, America or the Gulf countries.

Funds transferred to Lebanese families left behind are estimated at more than $7 billion a year, or about a third of the country's GDP.

Samir Ayoub

The role played by the Lebanese diaspora is vital today.

The funds transferred to Lebanese families left behind are estimated at more than 7 billion dollars per year, or about a third of the country's GDP.

So much so that this money transfer operation has become a means of political pressure for certain host countries.

Saudi Arabia, supported by several neighboring countries, recently threatened to suspend money transfers to Lebanon (estimated at more than 2 billion euros) after a Lebanese minister dared to criticize the intervention of the monarchy in Yemen.

Read alsoWar in Yemen: Saudi Arabia recalls its ambassador to Lebanon

Also, some multinational companies run by Lebanese regularly provide support to the Lebanese population. Like the maritime transport company CMA-CGM which graciously helps to transport donations from hospitals or NGOs from France and offers excellence scholarships allowing Lebanese students to continue their studies in France.

To this visible international solidarity is added daily local solidarity, carried by well-to-do families, who contribute to ensuring that the inhabitants of their villages, a growing number of whom sink into poverty as the country sinks into the crisis. , can have basic products.

For the end-of-year celebrations, initiatives have been taken in different regions of the country, so that all families have a meat-based dish, the price of which has become unaffordable.

The surge in local industrial production

In a country where 90% of consumer goods are imported in dollars, many products become inaccessible to a population earning its salary in Lebanese pounds. For example, an imported shampoo can now cost a third of a minimum wage! A situation that can only encourage the local industry to take advantage of the competitive advantage resulting from the depreciation of the Lebanese pound against the dollar. A blessing in disguise, and a form of revival which is therefore taking place in certain industrial sectors, aimed at the local market or for export. In both cases, the industrial sector helps to maintain jobs while offering consumers, whose purchasing power has dropped significantly since the crisis, products that are cheaper than those imported.

"'Made in Lebanon' [...]: here we see very concretely at work the 'resilience' which the Lebanese people are traditionally called"...

Samir Ayoub

This is how new local brands have emerged and have even been able to see their sales explode.

Brands of cereals, confectionery, chocolate, biscuits, mineral water, wine, beer, whisky, shampoo or even cigarettes… and many other “Made in Lebanon” products!

To all things misfortune is good... and we see here at work very concretely the "resilience" which the Lebanese people are traditionally called, despite the rise in the cost of production, the dilapidated state of the storage and routing and lack of supply of energy essential to production such as electricity.

This economic artefact occurs in a context of almost total absence of supervision by State services with regard to the payment of taxes, social security contributions or even the collection of VAT.

Added to this is the invoicing of water, electricity and telephone at the historic exchange rate (1 dollar for 1,500 Lebanese pounds) when we have reached 25,000 pounds today.

However, this balance remains fragile.

The production of certain products is correlated to the price of imported raw materials, indexed to the dollar.

Also, the cost of labor will eventually evolve to follow inflation, thus contributing to the inevitable increase in prices.

The indispensable role of NGOs

The action of NGOs in Lebanon was already visible, especially since 2012 in order to support Syrian refugees fleeing the war. Since 2019, their action has extended to take care of the daily life of the Lebanese. Thus, we find in Lebanon two kinds of NGOs. On the one hand, international organizations. On the other hand, local NGOs which work largely with the help of foreign funds. The parallel social and solidarity economy generated by their activity is growing to such an extent that it tends to replace the State in many respects.

International humanitarian action is deployed on all fronts.

The programs of the USaid and UKaid NGOs work mainly in support of SMEs and the improvement of industrial infrastructures, when Action against Hunger, Caritas, the Red Cross, Unicef, Care or Médecins du Monde distribute food aid, facilitate access to water, electricity or provide care.

Even if the activity of these NGOs is debated in Lebanon, because it leads in spite of itself to look away from a corrupt and clientelist political system, their activity remains essential for the time being.

Samir Ayoub

As for local NGOs, some follow the denominational and partisan breakdown of the country. Each denomination or political group has its network of NGOs. These NGOs have schools, hospitals, supermarkets... For others, they are trans-denominational and contribute effectively - because they are more familiar with the field - without distinction among all Lebanese. We can cite in this category Beit el Baraka, Nusaned, Baytna Baytak or Offrejoie, four particularly active NGOs after the explosion in the port of Beirut.

Service clubs are not to be outdone, like the Rotary Clubs which are particularly active in Lebanon and receive a lot of help from their international counterparts. Rotary's France-Lebanon Intercountry Committee, for example, helped collect and finance more than 500,000 euros for the reconstruction and equipment of hospitals affected by the explosion in Beirut. Their action continues in 2022 to contribute to the payment of school fees for children from low-income families.

Even if the activity of these NGOs is debated in Lebanon, because it leads in spite of itself to look away from a corrupt and clientelist political system, their activity remains essential for the time being.

It would be absolutely desirable for this action not to last over time, so as not to plunge Lebanon into a situation of permanent aid and for the Lebanese, long known for their sense of hospitality, not to have not feel like refugees in their own country.

Source: lefigaro

All news articles on 2022-01-19

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