A huge cloud of smoke followed by a massive explosion: the port area in Beirut is a field of rubble after the detonation on Tuesday evening. At least 100 people were killed and more than 4,000 injured. According to Prime Minister Hassan Diab, 2,750 tons of ammonium nitrate have been detonated, which is said to have been stored in a warehouse for six years without precautions.
It is probably an accident. And yet the incident highlights that Lebanon is developing into a failing state.
He was considered a relative role model in the Middle East for many years. The economy grew, also thanks to a diaspora that eagerly transferred money home. And the democratic structures also worked reasonably well in the small, densely populated country. For example, the US non-governmental organization Freedom House lists Lebanon as "partially free" in its 2019 report - a rarely good classification in the region.
The local currency has depreciated against the dollar by 85 percent since October 2019. Source: International Crisis Group
The ostensible economic success has eroded in recent years. The reasons for this are diverse. For example, grants and loans from external donors such as the Gulf States were eliminated. This restricted the central bank's monetary policy, which stimulated the economy with high interest rates for many years. Cheap loans for the real estate sector, which has been a key driver of growth since 2012 at the latest, were also dropped. The result: a recession that also led to falling tax revenues.
Around 2,000,000 million people lived in poverty in Lebanon in 2019. Source: World Bank
In autumn 2019, protests arose against elites in the country. Hundreds of thousands demonstrated against corruption, mismanagement, dilapidated infrastructure and the quality of public services. The government changed in December.
Food prices rose by 56 percent in the period from October 2019 to April 2020. Source: World Food Program
But the situation worsened. The Lebanese pound continued to depreciate against the dollar, with about a third of Lebanon's six million people living in poverty last year. According to the aid organization Save the Children, more than 500,000 children are currently fighting for survival in the greater Beirut area. The middle class of the country is being destroyed by hyperinflation.
1,500,000 Syrian refugees currently live in Lebanon. Source: UNHCR
The development is reinforced by the long-term war in Syria. Lebanon remains one of the largest receiving countries for refugees from the neighboring country. This has further increased pressure on the labor market and on government services. As a result, hundreds of thousands of Lebanese have become unemployed and have fallen into poverty.
17 rounds of talks with the International Monetary Fund were unsuccessful. Source: International Crisis Group
However, international aid has recently been reluctant to reach the country. There are internal reasons for this: protracted negotiations with the International Monetary Fund (IMF) on an aid program were unsuccessful because the Lebanese side could not agree on the implementation of the required reforms. In mid-July, IMF chief Kristalina Georgiewa called for agreement from the Lebanese delegation to launch the measures. So far, no agreement is in sight.
18 denominations are recognized in Lebanon.
But consensus will not be that easy. The disagreement is due to elites who want to preserve their benefices without compromise. The basis is religious affiliations: Lebanon's political and economic power is distributed using a complex system that takes account of the country's many denominations.
The system stabilized the state after the civil war ended in 1989. At the same time, it is considered an obstacle to more dynamic development. The World Bank criticizes the post-war elites as having shared the economy under the guise of denominations, which has led to a non-competitive market and a dysfunctional state. The situation in the country will therefore probably remain difficult in the medium term.