Lebanon’s Insidious 2021 Crisis

Not all emergencies have a clear and recognised trigger or starting point. Natural disasters do and conflicts can usually be traced back to a particular violent incident. Perhaps the most insidious crises are those that lack a starting point but rather are the result of a steady increase of overlapping and interconnecting issues reaching a boiling point.

In Lebanon the country lacks the bombs and bullets of neighbouring Syria, but its economic, social and political challenges are worsening and metastasising daily. The small country already plays host to hundreds of thousands of Palestinian refugees who’ve had their welfare services reduced by cuts to UNRWA, meanwhile the reduction in support to the estimated 1.5 million Syrian refugees in the country has meant that nine out of 10 Syrian refugee families in Lebanon are living in extreme poverty.

This is just part of the backdrop to Lebanon’s own economic crisis caused by a constellation of domestic issues combined with regional factors like sanctions on Syria and the departure of significant Gulf money from the country. The massive devaluation of the currency and the rise in the cost of living may be about to get significantly worse providing a moment of clear stress test for the country.

Lebanon's central bank has warned it could run out of money to pay subsidies on basic goods by early 2021. The removal of subsidies from a variety of goods from bread to petrol has proven a contentious and risky business across the region over the years. The Lebanon of the past few years is no stranger to public protests, some of which have turned violent, but this could be of a different scale.

Indeed, the UN has issued warnings of a looming “social catastrophe” around the removal of the subsidies. Prime Minister Diab confirmed at the start of the year that there was only $2bn in foreign reserves left for subsidies. There is already talk of cutting subsidies whilst supporting the poor, which may seem initially a bit of a paradox but there is a good argument that the system is in need of reform regardless of the backdrop.

One proposal is to replace the current subsidies with ration cards given to some 600,000 of Lebanon’s poorest families to help them through this period, although there is no obvious light at the end of the tunnel. The World Bank rebuked the Lebanese Government for not charting a way forward but it is hard to see how the country’s fragile political leadership can be strategic when they are having to prioritise tactical firefighting.

The fact of the matter is that allowing Lebanon’s crisis to get worse before addressing it will only make the challenge harder. The time to act is now and the right messages were heard in December by U.N. Secretary-General Antonio Guterres who announced the creation of a fund handled by the World Bank, the U.N. and the European Union to provide support for Lebanon, including food, healthcare, education and the reconstruction of the Port of Beirut.

Guterres was fully on message when he explained that; “we can, together, help the Lebanese people move beyond the emergency phase and onto the path for longer-term recovery and reconstruction”. Yet unless Lebanon can get its political house in order then humanitarian support will just keep the wolves from the door rather than addressing core and systemic issues.

The contraction of the global economy that has been triggered by Covid-19 and shows no sign of ending, will inevitably place a greater premium on donor money to help a world beset by emergencies. Towards the end of 2020 the UN put out its global humanitarian overview setting out that there are 235.4 million people in need and $35.1 billion needed from donors to help them.

Lebanon will have to compete for these funds with other emergencies and its divided body politic will arguably make it harder to attract donors. The challenge of a legacy of unresolved issues hangs over the country, most obviously the fact that last year’s massive Beirut port explosion has yet to be resolved with any genuinely accountability.

On top of all of this tinder box is the fact that Lebanon may be about to enter another period of Covid-19 lockdown, with first responders saying they have been transporting nearly 100 patients a day while hospitals report near-full occupancy in beds and ICUs. Lebanon’s gathering storm of crisis’s are gathering pace and the world must stay engaged and not just be observers to the country’s suffering.

James Denselow