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The Lebanese economy has been on a tumultuous trip in recent years, with the triple crisis affecting its banking sector, economy and currency.
Israel's recent war on the country only intensified the challenges, leaving Lebanon to fight destruction and insecurity.
In order to understand the current economic landscape, it is essential to look back at key events in the last decade.
WhatsApp Tax protests, 2019
Although the protests in 2019 were originally triggered by a proposed tax on WhatsApp calls, the main cause was a deep anger about unsuccessful government policies, mismanagement, corruption and the deep economic inequality that led to it.
The public confidence in the government has been declining for years, led by its controversial fiscal policies and the unsuccessful “financial engineering” of the Central Bank in 2016 – complex swaps and issuance of financial instruments to attract foreign currency and bring liquidity into the banking system.
Sustainable budget deficit and inflated salaries in the public sector – increased by a major increase in salaries in 2018 – further affected trust.
The October 2019 protests caused the economic difficulties and exposed the country's economic instability.
https://www.youtube.com/watch?v=nkevcfqBook
In March 2020, the government of Prime Minister Hassan Diab has sneaked into its government debt, just as the Kovid-19 pandemic strikes violates the global supply chains and exacerbates Lebanon's vulnerabilities.
The pandemic has further strained a weakened healthcare system, which leads to a critical shortage of hospital beds and basic medicines.
Its relying on tourism and money translations made Lebanon especially susceptible to the global economic decline.
The explosion of the port of Beirut, 2020.
In August 2020, one of the most powerful unnecessary explosions in history devastated Beirut.
In addition to the widespread destruction and loss of life caused in the capital, the explosion exposed a deeply rooted corruption and negligence, which further eroded public confidence in the government.
It also seriously discourages foreign investments, further destabilizing an already uncertain situation.
The Lebanese pound fell into a free drop in 2020, nourishing angry inflation and eroding people's purchasing power.
Then, in 2022, Russia invaded Ukraine, maintaining global fuel and food chains that affected countries around the world.
In Lebanon, he further strengthened the already intense economic pressure on households, which struggled to maintain the basic standard of living, as the government is increasingly struggling to provide the most significant services -and did not reach.
Sali Hafiz: “Wonder Woman” requires its money
As the banking sector fell deeper into trouble since 2019, and in the third quarter of the same year, banks began to seriously restrict people's access to their deposits.
Then in September 2022, Sally Hafiz took a replica pistol and lingered Beirut Bank to access its own savings. She immediately became a symbol of suffering that many Lebanese went through, and they began to call her a “miracle woman”.
These complex crises created the perfect storm, leaving Lebanon to deal with the edge of the collapse.
Many families have been forced to sell hidden values, while the reading of transfers has intensified. Still, even this rescue line proved to be insufficient for many.
The despair nourished the rush of Lebanese, including qualified professionals emigrating – the eviction of “people by boat”, trying on dangerous sea trips, becoming a great symbol of the despair of the nation.
In the third quarter of 2019, the government established a dual currency course regime – an official course and a free market course – and imposed ceilings on the prices of certain goods, including fuel and medicines.
This led to a shortage and development of black markets for these goods, beginning in 2020 and escalated to extensive queues and widespread public anger by 2021.
Thus, by the end of 2022, at the end of the term of President Michel Aun and the resignation of Prime Minister Najib Mikati's government, default, pandemic, port explosion, impairment of currency, and the increase in global prices led to unprecedented economic and social difficulties.
Glow
In 2023, the government stopped printing banknotes from LIRA, which helped the exchange rate stabilize. In parallel, the price control was canceled in the previous year, terminating the shortage and the black markets.
https://www.youtube.com/watch?v=dzawb6xch0e
However, this hope was short -lived, as Hezbollah began military to engage Israel on October 8 after October 7, 2023, Gaza events. After months of trade attacks on the border, Israel began a full -scale attack on the country in September 2024, leaving it devastated by the end of the year.
The resulting destruction was huge, estimated by the World Bank of approximately $ 3.4 billion, while economic losses, including lost productivity and trading interruptions, amount to an additional $ 5.1 billion.
Combined, they are staggering 40 percent of gross domestic product (GDP) in Lebanon.
The conflict further violates trade and deter foreign investments, exacerbating existing challenges – destroyed infrastructure makes it difficult to transport and logistics, greatly affecting the business that is barely surviving.
Exclusion
Hezbollah has played a huge role in Lebanese society for decades, providing financial and social support on his base for support in the southern suburb of Beirut, the southern and northern Valley of Becaa.
But his role was significantly impaired by the war, effectively “excludes” his contribution from the economic system, which would probably have a negative impact on those who rely on his support.
https://www.youtube.com/watch?v=QX0CBPR0W
Although the full macroeconomic effect is not yet clear, it can lead to more social and economic instability, especially given that Israel focuses its destructive attention on areas where the support of Hezbollah – now devoid of the support of Hezbollah – life.
Hopes for the future
Lebanon has a new government with President Joseph Aun and Prime Minister Nawaf Salam and hopes to hope for the updated political will to implement difficult reforms, given that the new government enjoys re-legitimacy.
Among the potential roads that the new government can explore that it would be bank reform, increase in trade and foreign investment, and increase its attractiveness as a destination for business.
However, he faces huge challenges, caused by deep -rooted problems that have hit Lebanon for at least a decade.
What remains to be seen is whether he will be able to implement economic reforms, maintain political stability and focus on the complexity of the regional geopolitical landscape.
In the end, the success of these efforts will directly affect the Lebanese people, especially the most vulnerable, in a context, in which the degree of poverty has increased greatly since 2019.
If it is not delivered, it can exacerbate the daily struggle for a decent life by pushing more citizens to desperate measures, including increased brain emigration and drainage, further eroding the social tissue of the nation.
