Protests Continue as Lebanese Economy Suffers amid Currency Collapse
Last updated on June 15th, 2020
With its active political, economic and environmental issues, Lebanon today is under huge crisis. Despite the constant efforts by the government to resolve the crisis, there has been surge in the protests in the country. The Lebanese economy that expanded after the war of 2006 and was thereby classified as developing, is now struggling following the continued protests and COVID-19 outbreak in the country.
In terms of ratio of debt-to-GDP, Lebanon is the third-highest indebted country in the world. Due to this, domestic government revenues are often spent on interest payments, limiting its ability to spend in public goods. COVID-19 has further worsened the situations in Lebanon. Some of the hardest-hit Lebanon cities by COVID-19 are Beirut, Bcharre and Majdel Anjar.
As the suffocating economic crisis has left Lebanon’s poor with little or no means to cope with extra hardship, there was a non-payment of salaries reported during the COVID-19 lockdowns. Since, the Lebanese economy is service-oriented, the restriction on growth sectors like banking and tourism led to a huge downfall in the economy.
In the wake of the economic crisis, Lebanon’s gross domestic product, which was around $55 billion a year ago, fell to about $44 billion. It went worse after the virus crisis as the country faced a significant shortage of test kits. Refugees and undocumented migrants remained the most affected, with no access to testing.
Meanwhile, the government is working to strengthen the already collapsing Lebanese economy. An emergency meeting was headed by Prime Minister Hassan Diab and attended by central bank Governor Riad Salameh, to discuss the country’s deepening financial crisis.
The move came hours after the protestors hit the streets of Beirut and other cities, against the hikes in prices due to a sharp devaluation of the Lebanese pound over the past two days on the black market. It’s the continuing wave of the protests that erupted in the country since mid-October. The local currency has lost around 70 per cent of its value, since then.
It has been noted for some time now that the Lebanese pound has constantly been plunging against the US dollar, thereby bringing a drop in Lebanese economy. The government meeting was thereby meant to bring stability to the Lebanese currency and to the security situation and financial issues in the country. But whether or not will the government succeed in bringing such measures that would subside the quelling voices of the protestors is still doubtful. Meanwhile, the civilians starving and suffering amid the crisis want the government to step down.
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