Our Opinion: 2021

Lebanon’s collapse

Lebanon took another step towards total economic collapse this month, when the state electricity provider declared that its two main plans had run out of fuel, causing a temporary nationwide blackout. Meanwhile, the collapse of its banking system continued to gather pace. Banks had already imposed harsh limits on withdrawals and foreign transfers; people now have so little confidence they will ever see their money again that they are selling cheques drawn on their accounts for as little as 15% of the face value.

The country’s currency has also plunged 15-fold against the US Dollar. As Lebanon imports most of its goods from abroad, this means large parts of the Lebanese population are now at or below the poverty line – only fresh Dollar remittances from the Lebanese population abroad are saving them from dangerous levels of food scarcity. This has led to increasing anger at leaders who have been complicit in a post-civil war cartel that has looted the country and neglected basic infrastructure.

One of the big winners from this crisis will be Iran. With the US pivoting away from the Middle East to focus on other foreign-policy goals, Iran has leapt into the vacuum – it has sent cut-price diesel to the country and offered to build two new power stations. The US and its allies are waking up to this threat, but their vague promises pale in comparison with Iran’s offer of “fuel in the hand”. The Ayatollahs in Iran will soon control four Arab capitals; Damascus in Syria, Sanaa in Yemen, Baghdad in Iraq and now Beirut in Lebanon.

25th October 2021