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Jerusalem Center for Public Affairs
Strategic Alliances for a Secure, Connected, and Prosperous Region

Lebanon Suffocates under the Coronavirus and the Rising U.S. Dollar

Filed under: Hizbullah, Lebanon

Lebanon Suffocates under the Coronavirus and the Rising U.S. Dollar
Lebanese President Michel Aoun on March 26, 2020. (Official Instagram)

The Covid-19 pandemic has destabilized Lebanon’s fragile body-politic and confirmed what was already obvious to all observers: that Hizbullah is the real power-broker – holding the  reins of power and navigating  its puppet government according to its will and political goals. Hizbullah acts as it pleases: overruling regulations forbidding people coming from Iran to land in Lebanon, paralyzing new governmental appointments at the Central Bank of Lebanon, threatening the government to withdraw its support if the government does not allow the return of more than 20,000 Lebanese citizens, mostly stranded in Africa (and therefore part and parcel of the Shiite community), and ultimately forcing the government to stop short of declaring a state of emergency in Lebanon. Such a declaration, under the Lebanese constitution, would have put the army in charge of the country, an intolerable situation that would have put Hizbullah and its militia under the sole control of the Lebanese Army.

In fact, the pandemic outbreak has been of great assistance to Hizbullah since, under the pretext of sanitary measures to combat the coronavirus, all protests have been dispersed, and all of the camps of the opposition groups along the main highways  have been banned from the public space. In other words, while Hizbullah was unable to quell the protests since October 2019, the coronavirus has succeeded in doing so. The protests just evaporated, since the main goal at present is to survive not only the pandemic crisis but also the first signs of famine. Tripoli (mainly its Hay el Sullum quarter) and the Dahiya neighborhood in the southern suburbs of Beirut, where Hizbullah has its headquarters, have lately witnessed major manifestations of distress with people shouting for food and asking the government to intervene.

Indeed, the combination of the corona calamity and the ongoing economic disaster are the main enemies of the Lebanese. After the October crisis, Lebanon’s financial disaster was exposed: the average income of the Lebanese is between $2 and $4 a day in a country whose external debt is the highest among nations per capita (more than $80 billion). The U.S. dollar, which had been traded at the official rate of 1,507 Lebanese pounds to the dollar, reached 2,800 Lebanese pounds to the dollar at the end of March 2020. Inflation has spiked 27% since October  causing the price of food to soar by 50%. Lebanon announced in early March that it could no longer meet the payments on its foreign loans, while  some reports have pointed at the possibility that the government would trim all deposits, a measure that would bring havoc on Lebanon as a whole.

In order to get tested for Covid-19, a Lebanese citizen has to pay $90, while illegal residents in Lebanon (one million Syrian refugees and more than 250,000 foreign workers) are required to pay $500 for a test, an impossible sum for most Lebanese or non-citizens. At the same time, certain very powerful people, with the active complicity of some of the banks, have managed to smuggle more than $6 billion out of the country in less than three months, defying all emergency laws forbidding the withdrawal of more than $1,000 per week from what are called “fresh accounts,” accounts that were opened in the post-October period. Moreover, the state has forbidden any currency withdrawal from ATMs. As a result of the shortage in American currency, almost all imports have stopped except for those sponsored by the state.

There is general agreement that the days of the government of Prime Minister Hassan Diab are numbered. The reforms of the political system promised by Diab have not materialized, and the pursuit of stolen money is at a standstill (too many politicians and political parties are involved). Hopes of putting an end to a political system based on favoritism and the division of jobs and political appointments according to a sectarian key that was decided at Taif in 1989 have remained unfulfilled.

It is no wonder that the present situation has exacerbated the passions between political rivals, such as former Prime Minister Saad Hariri and the leader of the Christian Lebanese Forces Samir Geagea, and Hizbullah and its “caretaker,” former foreign minister and leader of the “Patriotic movement” Gibrane Bassil, President Michel Aoun’s son-in-law.

The corona crisis, coupled with the economic slump in Lebanon, will force decision-makers to reconsider their positions and try once more to overcome the deadlock that is paralyzing Lebanon.