In Lebanon, an economic crisis against a background of corruption

Unprecedented uprising for almost ten years in the land of Cedar. Tens of thousands of protesters have been protesting for three days all over Lebanon to demand the resignation of the government. Roads blocked, barricades of tires in flames ... The protesters, who spare no side, revolt against a political elite they accuse of looting the country, while Lebanon is approaching the economic collapse.

The main consequence of "mismanagement of the government", according to Sami Nader, director of the think tank Levant Institute for Strategic Affairs, interviewed by AFP, the demonstrations are an accumulation of grievances, at the head of which are the weakening of the purchasing power and tax increases.

Across Lebanon, tension has been rising for several months already. Last July, a budget of austerity was voted, accompanied by reforms to mop up the abysmal debt that gnaws the country, whose economy has been deteriorating for years. Today, the third largest debt in the world behind Japan and Greece, Lebanon's public debt rises to more than 86 billion euros, or 151% of GDP according to the IMF. For comparison, this is even more than the situation in which the Greek economy was in 2010 (146.2%, according to Eurostat).

Inflation, corruption, shortage of dollars in an economy based mainly on the greenback ... Lebanon, which also suffers economic repercussions from the war in neighboring Syria, has entered a recession phase among the worst of the last 30 years.

Always more taxes

It will have been enough of an announcement to fire the powders. Thursday, October 17, the Lebanese Minister of Telecommunications, Mohamed Choucair, announces a new tax on calls made via WhatsApp and Viber applications. At a rate of 20 cents (18 euro cents), this tax would allow, according to him, to bring back 200 million dollars a year to the State. The measure provokes the ire of the Lebanese, in whom for several months has been growing a discontent with inflation and the cost of living. In this country where the price of mobile is among the highest, the WhatsApp tax is experienced as the measure of too much. Faced with the explosion of anger that arouses, Mohamed Choucair has no choice but to back down. Expected to come into effect on January 1, 2020, the WhatsApp tax will ultimately not occur. It remains, however, the symbol of these taxes drawn by the government to stop the downward spiral of the budget deficit.

In the Lebanese capital, Zeina Antonios, correspondent for France 24, evokes Saturday the "political recovery" which is already subject to this movement citizen. "The political formations started with speeches saying, 'We feel your suffering, we have never been for more taxes'."

Since its establishment, however, the Lebanese executive has embarked on a policy of reducing public expenditures and increasing state revenue, increasing taxes and reducing social assistance to which the population can claim.

Disastrous public service

Nearly 30 years after the end of the civil war (1975-1990), Lebanon, plagued by recurring political crises, is still plagued by a chronic shortage of electricity and drinking water.

"I want electricity, I want the streets to be lit," says Dima Hassan, who is demonstrating in a southern region dominated by the Hezbollah-based Shiite armed movement. "I do not want to hear the noise of generators" that supply electricity at exorbitant prices when public electricity is cut, she says.

Given the deficit of the Electricity of Lebanon, the State has also promised to interrupt its subsidy to the sector by 2020, says the Lebanese daily L'Orient-Le Jour. An interruption that will cause increases of about 180% on the electricity bills of citizens.

The public service is water, electricity, but also the treatment of waste, a leitmotif in the history of popular demands in Lebanon.

In 2015, a series of demonstrations mobilized several tens of thousands of Lebanese protesting the government's failure to deal with garbage accumulated after the closure of the largest waste disposal center in the country. In Lebanon, where there are only two landfills, the garbage crisis has never stopped since. The demonstrations currently taking place throughout the country are part of the continuity of this one, crystallizing again the demands of the population against the dysfunctions of the State, the endemic corruption and the paralysis of the political institutions.

At the end of the economic conference for the development of Lebanon by the reforms and with the companies (Cedar), which took place in Paris in April 2018, Lebanon had obtained promises of aid to the amount of 11.6 billion dollars from the international community. Financial aid intended primarily for the rehabilitation of infrastructure and the revival of investment in Lebanon.

Conference #CEDRE for #Liban, @ @ SAADHARRII by @JY_LeDRIRI in Paris with more than 50 countries and international organizations to support the Lebanese economy and stability of the country. pic.twitter.com/FQWBNZ6kht

Political paralysis

In exchange for the aid promised to the conference, Lebanon has pledged to implement administrative and budgetary reforms. Reforms blocked due to divergent interests between the different components of executive power.

After nine months of political slump, Lebanon managed to form a government last February. In the wake of the parliamentary elections that won the coalition between the free patriotic current of Christian President Michel Aoun and the pro-Iranian Shiite party Hezbollah, Prime Minister Saad Hariri had to play the negotiators, caught between different political parties. Differences that have so far failed to take the reforms expected following the Cedar Conference to curb the economic crisis.

At the foot of the wall, Friday, October 18, while the crowd was getting denser on the iconic square Riad El Solh adjacent to the seat of government, the Prime Minister spoke in a televised speech. He then announced giving 72 hours to the government to support its economic reforms.

مهما كان الحل لم يعد لدينا وقت وانا شخصيا اعطي نفسي وقتا قصيرا واما ان يعطي شركاؤنا في الوطن جوابا صريحا حول الحل أو يكون لي كلام آخر والمهلة قصيرة جدا أي 72 ساعة السراي_الكبير # # سعد_الحريري

Hezbollah leader Hassan Nasrallah said his movement did not support the government's resignation, and urged everyone to "take responsibility."

"If we do not work on a solution, we will head towards a collapse of the country," he warned, warning of a potential "bankruptcy", which will lead to a devaluation of the Lebanese pound. "The second danger is a popular explosion that would result from our mismanagement of the situation," he concluded.

Unemployment and poverty

Declining infrastructures and endemic corruption (in 2018, Lebanon ranked 138th out of 180 in the ranking of the most corrupt countries, according to the organization Transparency International, Ed) are added the economic repercussions of the war in Syria neighbor.

Since 2011, Lebanon has hosted one million Syrian refugees, who today represent a quarter of its total population. An influx of refugees coincides with an explosion in the unemployment rate in Lebanon, which is around 20%.

Saturday, the third day of the protest movement, protesters were still so numerous in the country, according to Zeina Antonios, who indicates that "these continue to support socio-economic demands." Protesters, many of whom come from the younger generation, descended on Thursday in the street, shouting "Revolution!"

With AFP