Economy

Hizbullah's actions push Lebanon toward a 'colossal collapse'

The country has been in a state of collapse for four years, with many people at their limit and the situation likely to get worse, analysts say.

A man drives his wife and three children through Beirut on a motorcycle. For some in Lebanon, the high cost of fuel has put the cost of running a car out of reach. [Naji Akram/Al-Fassel]

A man drives his wife and three children through Beirut on a motorcycle. For some in Lebanon, the high cost of fuel has put the cost of running a car out of reach. [Naji Akram/Al-Fassel]

People line up to convert currency outside a money exchange shop in Beirut. Since the outbreak of the economic crisis in Lebanon, the exchange rate of the pound against the dollar has plummeted. [Naji Akram/Al-Fassel]

People line up to convert currency outside a money exchange shop in Beirut. Since the outbreak of the economic crisis in Lebanon, the exchange rate of the pound against the dollar has plummeted. [Naji Akram/Al-Fassel]

A man sleeps on a sidewalk in Beirut. Extreme poverty has left many Lebanese without shelter. [Naji Akram/Al-Fassel]

A man sleeps on a sidewalk in Beirut. Extreme poverty has left many Lebanese without shelter. [Naji Akram/Al-Fassel]

A Lebanese woman raises a sign in Beirut asking for help for her mother, who suffers from cancer and needs treatment. [Naji Akram/Al-Fassel]

A Lebanese woman raises a sign in Beirut asking for help for her mother, who suffers from cancer and needs treatment. [Naji Akram/Al-Fassel]

Garbage is piling up in the streets of Tripoli, as waste removal companies are not clearing it, due to the crisis. [Naji Akram/Al-Fassel]

Garbage is piling up in the streets of Tripoli, as waste removal companies are not clearing it, due to the crisis. [Naji Akram/Al-Fassel]

Children play on boats in the northern port of Tripoli. The severe economic crisis has forced many children to drop out of school because their parents are unable to pay the high tuition fees. [Naji Akram/Al-Fassel]

Children play on boats in the northern port of Tripoli. The severe economic crisis has forced many children to drop out of school because their parents are unable to pay the high tuition fees. [Naji Akram/Al-Fassel]

Old houses in the poverty-stricken northern city of Tripoli are in need of repair and restoration after years of neglect. [Naji Akram/Al-Fassel]

Old houses in the poverty-stricken northern city of Tripoli are in need of repair and restoration after years of neglect. [Naji Akram/Al-Fassel]

By Nohad Topalian |

BEIRUT -- After four years of crisis, Lebanon still faces "enormous economic challenges," the International Monetary Fund (IMF) warned September 15.

These include a collapsed banking sector, eroding public services, deteriorating infrastructure and worsening poverty, it said at the conclusion of a four-day visit.

The economic crisis and collapse of the currency have weighed heavily on hundreds of thousands of families, who once enjoyed a comfortable and even luxurious lifestyle and now can barely secure their basic needs.

At the top end of the scale is Salam Melhem, her husband Rony, and their two teenage children, Fadi, 17, and Sarah, 15, who reside in Sin el-Fil -- an eastern suburb of Beirut -- whose furniture shows they used to live in luxury.

A girl stands next to an empty refrigerator in her home in the northern Lebanon city of Tripoli. [Naji Akram/Al-Fassel]
A girl stands next to an empty refrigerator in her home in the northern Lebanon city of Tripoli. [Naji Akram/Al-Fassel]

"Until the eve of the crisis, we paid no mind to our expenses," Melhem told Al-Fassel.

"My husband's salary was enough for us to acquire all the luxuries we needed, travel once a year, and deposit a monthly amount into our bank account."

"As the crisis unfolded and the economic and financial situation collapsed, however, the crisis entered our home, and we had to give up almost everything after my husband's salary decreased," she said.

Living 'below zero'

For those who were barely eking out a living before the crisis, and for the country's young people who are just starting out, the situation is much more troubling.

The house of 23-year-old Razmik Kenderjian, in Bourj Hammoud, reflects the poverty in which she lives.

The demands of her 4-year-old son are many, and she has been unable to meet them since her husband, Hrant, lost his job in a factory that closed its doors.

"We depend on the assistance of organizations in the area," she told Al-Fassel, holding back tears. "We were living contentedly until the crisis and collapse destroyed our lives."

Supermarket worker Hussein Mkahal was already struggling to feed his wife and their five children, all under the age of 13, before the economic crisis began.

But now, things are much worse, he told Al-Fassel as he carried a few bags back to his home in Beirut's Ras al-Nabaa neighborhood.

"We are living below zero," he said.

"My salary has lost its purchasing power, so we have lost family security. There is no proper food and no medicine except for emergency cases."

Meanwhile, he noted, government officials "are living in luxury, not caring about the people, whom they have thrust deeper into poverty."

Elsewhere in Ras al-Nabaa, Nasser Abbas lives with his mother.

"My work as a television satellite dish installer does not cover the cost of my ill mother's medications," he said.

"Before the crisis, my situation was modest, while today I'm below zero."

Situation 'will get worse'

As it delivered its warning in mid-September, the IMF also set out the steps needed for a permanent solution to the crisis in Lebanon.

This "requires comprehensive policy decisions from the parliament and the government to contain the external and fiscal deficits and start restructuring the banking sector and major state-owned companies," it said.

Economic writer Antoine Farah told Al-Fassel the IMF statement "was clear in warning of the titanic collapse towards which Lebanon is heading."

Lebanon has "been in the collapse stage" for four years already, he said, adding that "we are heading towards a situation that will get worse."

To mitigate the impact of the crisis, he said, the government has been spending depositors' money in the banks and using Central Bank funds.

"But today, the funds are almost depleted, and acting Central Bank governor Wassim Mansouri has taken the decision not to finance the state," he said.

The state has depleted the IMF Special Drawing Rights (SDR) funds it was allocated to help it out of the crisis, he said. The SDR is an international reserve asset to supplement the official reserves of IMF member countries.

The only way to prevent a major collapse now is "by implementing the reform measures in order to gain access to the [IMF] recovery plan," Farah said.

This in turn "can be achieved only through political regularity, i.e., election of a president of the republic, and making additional efforts to ensure the conduct of the presidential election," he added.

"Without political orderliness, there is no hope for reforms and rescue to prevent a major collapse," he warned. "Political forces are required to cooperate for the achievement of political regularity in the country."

Hizbullah bears a great deal of responsibility for "obstructing the election of a president of the republic," he added, and the party's role in "smuggling and its failure to assume its responsibilities have all contributed to the collapse."

Lebanon's presidency has been vacant since last October.

Hizbullah to blame

Writer and political analyst Charles Jabbour told Al-Fassel that Hizbullah "bears the primary responsibility" for Lebanon's economic collapse and for its isolation.

The Iran-backed party has persistently refused to give up its illegal weapons, he said, "which prevents the state from exercising its sovereign role and hijacks its decision-making process."

And in order to provide political cover for its illegal weapons, Hizbullah has sought to influence Lebanon's political system, which has spawned "corruption and theft," he said.

"Hizbullah's illegal weapons and the clique who handles the state's affairs have destroyed the state institutions, so there is no longer any judiciary or accountability," Jabbour said.

"Hizbullah's policies that are disrupting political life in Lebanon have contributed to further collapse and the impoverishment of the Lebanese," he added.

Jabbour accused the party of contributing to "the plunder of depositors' money and the use of the mandatory reserve to cover the state's waste."

The international community has come to the conclusion that it cannot continue in its role as a rescuer, he added, because it "realized that the support and aid it provides to the state go to the corrupt system."

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