The world is watching Lebanon could the country’s recent protests become the famous water drop overflowing the barrel? But why did Lebanese people go out to the streets, who are seen as the most open minded and wealthy by its neighboring countries?
Money and Weapons
Lebanon is suffering under inequality in economic circumstances, therefore social inequality is the consequence. The richest 1 percent of Lebanon’s population controlls 25 percent of the gross national income between 2005 and 2014, bank deposits reflect this unjust distribution: Statistics from 2017 show that 20 percent of total deposits were concentrated in only 1,600 bank accounts – just 0.1 percent of all deposit accounts countrywide.
After the civil war, three factors came together to negatively affect income distribution: First, between the end of the war and the middle of the last decade, public debt increased by 2120 percent. However, GDP per capita has been almost fourfold. Second, public borrowing after the war was almost exclusively reliant on the domestic market through government bonds issued in Lebanese pounds. Third, the interest rate on the Lebanese pound debt was alarmingly high.
The increase in public debt alone does not indicate that wealth is unevenly distributed. Even the debt-to-GDP ratio (currently estimated at 150 percent in Lebanon) is not enough to ring the alarm bell. In the end, Japan’s debt reached 234 percent of its GDP in 2017. But the country is not on the verge of a debt crisis or even experiencing severe socio-economic inequality, compared to other similar countries.
The Lebanese situation is characterized by two elements of growing public debt, which together were incubators for the country’s inequality: First, borrowing conditions were never appropriate for the treasury, as the Lebanese government soon plunged into a deeper debt cycle in order to meet its debt-servicing obligations. Second, public borrowing was based on a very narrow domestic lending base.
Hezbollah’s weapon
“The monopoly of the legitimate use of force is the foundation of the modern state”, says Max Weber, a German sociologist and politician. The question that can be asked about Lebanon is whether its government is willing and able to assert control over that authority, because that would mean preventing Hezbollah from stockpiling military weapons, threatening neighboring countries, or engaging in illicit financial activities with impunity.
Some say Hezbollah infiltrated the government so heavily that the two powers became one and the same. Nevertheless, the UN Security Council, the US and Israel have significantly supported their recent actions by appealing to Beirut to intervene, noting that concrete steps can still be made by the Lebanese government to reaffirm its control over Lebanon’s national and financial security.
Observers say the solution is for Lebanese officials could be to take steps now protecting the banking system from abuse and preventing Hezbollah from using the country as a military platform against Israel. Failure to take steps now will enable Hezbollah to hold Lebanon as a hostage to its own interests.
This is a decisive moment for Beirut, because the consequences of failure is war or a collapsing economy, or both, which are devastating for Lebanon.
Last August, Israel operated a successful military strike against Hezbollah and part of its headquarters in the southern suburbs of Beirut to preventing the terror organization from manufacturing and using missiles through the help of Iran, using transit routes for the deadly parts through Syria.
This was seen as a warning sign to the Lebanese state in the first place, but Hezbollah is stronger than the state to the extent that all of Lebanon is threatened for Hezbollah’s weapons, which primarily serve Iran and its expansionist interests, and does not pay attention to Lebanese interests.
The core issue of the Lebanese problem is that the public debt is the largest in the world, and within its government and administration there is the strongest party in the country that wants to sabotage the country and seeks to achieve the expansionist Iranian Shiite project.
Copyright © 2019 The Middle East and North Africa Media Monitor.
