Weekly grocery bills can equal months of income for a typical family.es refuse to let people withdraw money. Basic medicines are often unavailable and lines at gas stations can last hours . Every day, many households lack electricity.
Lebanon suffers a humanitarian catastrophe created by a financial crisis. The World Bank called it one of the worst financial crises in centuries. "It really feels like the country is melting," said Ben Hubbard, a Times reporter who has spent much of the past decade in Lebanon. "People have seen a whole way of life disappear.
It 'sa reviremThis is shocking for a country that was one of the Middle East's economic success stories in the 1990s. Considering the extent of the suffering and the modest media attention it received as the rest of the world. world remains focused on Covid-19, we're dedicating today's newsletter to explaining what happened in Lebanon, with help from Ben.
How did this happen?
As often happens with a financial crisis, the situation is 'was built slowly, then collapsed quickly.
After the 15-year civil war in Lebanon ended in the 1990s, the country decided to link its currency to the US dollar, rather than let global financial markets determine its value. Lebanon's central bank promised 1,507 Lebanese pounds would be worth exactly $ 1 and Lebanese banks would always exchangeagainst each other.
This policy brought stability, but it also forced Lebanese banks to own a large store of US dollars , like Nazih Osseiran of the Wall Street Journal explained - so banks can keep their promise to swap 1,507 lira for $ 1 at any point . Lebanese businesses also needed dollars to pay for imported goods, a big part of the economy of a country that produces little of what it consumes.
For years Lebanon had no problem attracting dollars. But after 2011 that changed. A civil war in Syria and other political tensions in the Middle East have hurt the Lebanese economy. The rise of the He groupzbollah, which the United States considers a terrorist organization, in Lebanon has also deterred foreign investors.
To maintain the influx of dollars, the leader The central bank came up with a plan: the banks would offer very generous terms - including an annual interest of 15% or even 20% - to anyone who deposited dollars. But the only way for banks to meet these conditions was to reimburse the original depositors with money from new depositors.
Of course, there is a name for this practical: a Ponzi scheme . "Once people figured that out, it all fell apart," Ben said. "In 2019, people stopped withdrawing their money from banks.
Officially, the exchange rate ris unchanged. But in daily transactions, the value of the lira has fallen by more than 90% since 2019. The annual inflation rate has exceeded 100% this year. Economic production plunged.
Even before the crisis, Lebanon was a very unequal country, with a rich political elite that has long been enriched by corruption. Image Some people have resorted to sorting garbage. Credit ... Bryan Denton for Hfrance.fr
Three new issues
Three developments since 2019 have made the situation worse.
First, thegovernment has tried to raise money by imposing a tax on all WhatsApp calls, which many Lebanese families use because phone calls are so expensive. The tax infuriated people - many of whom saw it as another example of government-imposed inequality - and sparked widespread and sometimes violent protests. “People from outside looked at the country and said, 'Why involve my business in a place like this? "Ben said.
Second, the pandemic is hurting Lebanon 's already vulnerable economy. Tourism, which accounted for 18% of Lebanon 's pre-pandemic economy, was particularly affected.
Third, a huge explosion in the port of Beirut, the capital of Lebanon, in August 2020 killed more than 200 people and destroyed several prosperous neighborhoods. "Many people could not afford to repair theirr home "said Ben. (This Times Project takes you inside the port and shows how corruption helped make the explosion possible.)
Lebanon formed a new government last month, for the first time since the explosion. Prime Minister is Najib Mikati, a billionaire who has held the post twice since 2005.
The French government and other foreigners have pushed the Lebanese government to adopt reforms, but there is little evidence that this will be the case. The Biden administration, focused on other parts of the world, has chosen not to implick deeply.
Many Lebanese families depend for their survival on money transferred from family members living in other countries. "The only thing that keeps a lot of people afloat is that most Lebanese militias have relatives somewhere abroad," Ben said.
For more information:
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ARTS AND IDEAS
The " Worst Idea in Broadway History "
Fifty years ago, the rock opera " Jesus Christ Superstar "- with music by Andrew Lloyd Webber and lyrics by Tim Rice - opened on Broadway. Outside of the sold-out shows, protesters called the musical blasphemous.
The production was a risk. He tells the story of the last seven days of the life of Jesus through the eyes of one of his disciples, Judas Iscariot. Like Lloyd Webber l 'recently told UK newspaper The Telegraph, the producers considered it " the worst idea in history " and didn't want to stage it.
Some initial reactions echoed these fears. Times critic Clive Barnes unrolled production :" It all looked rather like the first sight of the Empire State Building. Not at all uninteresting, but somewhat surprising and of minimal artistic value. "
In the end, the show won over the audience. marrying rock and musical theater, the musical paved the way for shows like "Les Miserables" and "Le fantôme de l 'opera", Sarah Bahr writes in The Times . - Claire Moses, Morning Writer
PLAY, WATCH, EAT
What to cook Image Credit ... Sarah Ann e Ward for Hfrance.fr
You like either Manhattan Clam Chowder or not. (James Beard called it " horrible. ")
What to listen to
The The moving and introspective debut album by Joy Crookes , 22 years old, "Skin. Listen to a track .
What to read
Jane Goodall shares the books on her nightstand . "There was no television when I was a kid " she said. "I learned from the books - and nature. Doctor Dolittle and Tarzan made me dream of living with animals in Africa. "
Late at night
Hosts commented William Shatner 's Journey to the Ends of Space .
Now is the time to play Image figcaption >
Yesterday's spelling contest pangram was promotion. Here is the puzzle of 'aujourd ' hui - or you can play online .
Here is today's mini crosswords 'hui , and a hint: seriously impressed (five letters).
If you're in the mood to play more, find all our games here .
Thank you have spent part of your morning with The Times. See you tomorrow. - David
PS "I'm glad other people countries are affected by our problems here "said Martin Luther King Jr., after winning the Nobel Peace Prize 57 years old today .
Here is today's printed homepage .
“ The Daily " concerns Rikers Island . " Popcast " remembers the musicians lost to Covid.
Claire Moses, Ian Prasad Philbrick and Ashley Wu have contributed to The Morning. You can join the team at themorningHfrance.fr .
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