Lebanon’s Economic Crisis Worsens due to Coronavirus Imposed Lockdown
The coronavirus pandemic has pushed some countries to the brink of recession. War-torn regions in the Middle East have been the worst-hit as these countries now have to bear the economic fallout due to the virus also. Lockdowns have further worsened the situation for poor who work hard every day for their bread and butter and have very less savings at disposal.
The economic crisis in Lebanon is no different. The Middle Eastern country was already facing a historical economic crunch prior to the pandemic, which led to the anti-government protests previous year. Almost half of country’s six million people reside below poverty line.
Most citizens are afraid that poverty may kill more people than coronavirus. There are many who are now jobless. A taxi driver, coming back to work after eased lockdown in Tripoli, said that he was struggling to find any paying customer to sit in his vehicle. “Before my life was good. I’d work and I could feed my children.”
The economic crisis in the country is so bad that the currency has lost around 60 percent of its value against dollar, triggering a steep inflation which is heavily dependent on imports. With not much into balance sheet on export side, a recent analysis revealed that one-third of the population is unemployed and hundreds of businesses are shut or have gone bankrupt since the lockdown came into force.
Recently, protestors flamed dozens of bank branches. This was the outcome of rising anger among citizens over government’s decision to limit withdrawals because of the currency shortage and falling value. Lebanon’s currency was pegged against dollar which enabled Lebanese to convert the domestic currency into dollar hassle-free. But, now with the declining currency rates, withdrawing money has become challenging and currency crisis has surged rapidly.
Globally, Lebanon is the third most indebted country. The weak governing authorities, instead of coming up with strong reforms, have been dependent on increasing taxes and debts to pay its bills. Strong corruption roots have also taken away cash from more than a third of the population, which is now struggling for food every day. Newly appointed Prime Minister Hassan Diab has also warned that many people will not be able to afford bread in coming times.
With the ongoing economic crisis and crunched liquidity, government is eyeing for a loan from IMF that many experts are seeing as the only way out. However, the negotiations are still undergoing and political uncertainty is on the rise.
The lockdown has made it worse for the people as they believe that the government has abandoned them. Some are worried that as the lockdown would lift gradually, people will return to the streets again to protest against the government, this may make the situation more challenging for authorities to handle amid the decade long economic crisis.
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