Two years in review: Lebanon's economic collapse

MENA

Published: 2021-08-01 12:03

Last Updated: 2024-04-17 14:16


Source: DW
Source: DW

Since 2019, Lebanon has witnessed an accelerating economic collapse, exacerbated by the explosion of the Port of Beirut and the outbreak of the coronavirus. Meanwhile, the country's political powers have been unable to form a new government, which the international community says is a prerequisite to unlocking needed aid. 

- spark whatsapp -

On October 17, 2019, the Lebanese government announced its intention to impose a fee on free communications via electronic messaging applications such as WhatsApp.

This sparked the anger of the Lebanese who, weeks before that, began to perceive signs of a severe economic crisis. They took to the streets to express their rejection of the decision, chanting the slogan, "The people want the downfall of the regime."

The government headed by Saad Hariri backed down from imposing the financial fee, but popular protests continued.

On October 18, schools, universities, banks and public institutions closed their doors.

On the 20th, the popular movement reached its climax, with hundreds of thousands demonstrating all over the country.

The demonstrations demanded the departure of the ruling class, which has not been touched by a fundamental change for decades and is accused of corruption and incompetence.

At the end of October, amidst the outcry of the street, the Hariri government resigned.

In November 2019, banks imposed strict restrictions on withdrawals and transfers abroad. Unprecedented measures continued. 

- Coronavirus outbreak begins -

In February 2020, Lebanon recorded its first infection with the coronavirus. The burdens gradually accumulated on the health sector, which was exhausted by the economic collapse.

- defaulted -

On March 7, 2020, the new government headed by Hassan Diab announced that Lebanon would "suspend" the repayment of a debt of $1.2 billion due on the ninth of it, stressing that "the Lebanese state will seek to restructure its debts."

On the 23rd of this month, the Ministry of Finance announced that it would "stop paying all outstanding Eurobonds in dollars."

On April 30, the government announced an economic recovery plan and requested the assistance of the International Monetary Fund. After about two weeks, negotiations began between the two parties, but they stopped in the summer of 2020 after 17 sessions due to differences between the Lebanese parties themselves.

- Explosion -

On August 4, a huge explosion occurred in the port of Beirut, killing 214 people and injuring more than 6,500 others, resulting from huge quantities of ammonium nitrate stored since 2014 in hangar No. 12 in the port of Beirut.

August 6, French President Emmanuel Macron visited Beirut and called for a "change" in the regime. Then he convened an international conference to support Lebanon, during which the international community pledged to provide emergency aid worth $300 million that would not pass through state institutions.

Aug. 8, thousands of Lebanese demonstrated against political officials who they blamed for the tragedy. 

The demonstrations witnessed violent confrontations between angry protesters and the security forces, who used tear gas and rubber bullets.

On Aug. 10, Hassan Diab's government resigned.

- No government -

On Aug. 31, Lebanese politicians preempted Macron's second visit to Beirut by agreeing to assign Lebanon's ambassador to Germany, Mustafa Adib, to form a government.

In early September, Macron returned from Beirut with a road map, according to which the political forces committed themselves to forming a government with a "specific mission" within a maximum period of two weeks.

But on Sept. 26, Adib apologized for not forming the government after he ran into sharp differences between the political forces.

On Oct. 22, Lebanese President Michel Aoun again tasked Saad Hariri with forming a new government.

- One of the worst crises since 1850 -

On the impact of the accelerating economic collapse, more than half of the Lebanese people are below the poverty line, and the Lebanese pound has lost more than 90 percent against the dollar, while the prices of all materials and goods have risen, even as the prices of basic foodstuffs have risen by more than 700 percent in two years.

On Feb. 1, 2021, the authorities announced an increase in the price of bread by about 20 percent. The government raised the price of the news several times later, most recently on the tenth of July.

On June 1, the World Bank ranked Lebanon's economic collapse among the worst in the world since the mid-19th century.

On June 26, demonstrators in Tripoli (North) and Sidon (South) attempted to storm public institutions to denounce the record devaluation of the national currency.

On June 29, fuel prices rose by more than 30 percent after the partial lifting of subsidies, while the shortage caused endless queues at gas stations.

On July 9, two major power plants were closed due to fuel shortages.

On July 22, the Hospital Syndicate warned of a "health catastrophe" due to the continuous power cuts and the unavailability of diesel to run generators.

- Hariri's departure and Mikati's return -

On July 15, nine months after his assignment, Saad Hariri apologized for not forming a government after sharp political differences with the President of the Republic prevented him from completing the task. Hariri and Aoun spent the past months exchanging accusations of obstruction due to the dispute over quotas, the nomination of ministers and the form of the government.

On July 26, Najib Mikati, who headed two governments in 2005 and 2011, commissioned the formation of a new government.