Lebanon has been considered probably the most democratic country among all Arab countries. Even if its history is mainly characterized by war and bloodshed, this wonderful country managed to face many obstacles and became, at least in the last 40 years, a lovely and wonderful place to live in with its capital at the core.
The civil war that lasted 15 years brought the country to its knees. It barely managed to survive when the civil war ended, politically, socially and economically. After almost 30 years, an explosion brought the country again to a total disaster, deepening the already existing financial crisis, already deepened by the coronavirus outbreak.
In my post today, I will focus on 6 main consequences of the explosion.
Firstly, the explosion will definitely affect the Lebanese economy. The place where the explosion happened is the biggest port of Lebanon, where the highest level of naval traffic happened and brought billions of dollars into the Lebanese economy. The explosion destroyed the port and many facilities. Thus, a most of the operation were stopped. Besides this, the cost of damage is tremendous and it has to be rebuilt. Indeed, Tripoli, the second-biggest port in Lebanon, took over some operations, but it is impossible to resume all the operations and to significantly reduce the economic burden. Another thing to mention is that Lebanon is an import-dependent country and the destruction of the port means that food, medical supplies and other commodities cannot enter the country at full capacity. People are starving, hospitals lack medical supplies and so on. Lebanon was already in a deep crisis, even its currency was doing very poor. There is not enough fuel also.
Secondly, Lebanon will suffer politically. The government already resigned, as I predicted in my previous articles. Thousands of people took the streets and asked for the resignation of the government, accusing the officials of corruption. I have seen in the news that the former Prime-Minister, Saad Hariri, does not want to step in in order to form a new government. Many people were arrested, including high ranking officials, customs and port officials. There are still many question marks regarding how such a huge quantity of ammonium nitrate was deposited in the warehouse and why it was stored in poor conditions.
Thirdly, I looked very closely at the protests. Streets filled with thousands of protesters is a very big deal. People were already disappointed with the state of their country and the explosion emphasized even more their anger. They were asking how the government did not care about the ammonium nitrate stored in that facility as long as during the last 6 years there were many warnings regarding the improper conditions of the storage. People gathered in front of the Parliament building, even occupied some government buildings. Since the explosion, every day, in Beirut and other major Lebanese cities, dozens of people are protesting.
Fourthly, I am looking forward to see what help Lebanon gets from the international community. The damage made by the explosion is estimated around the sum of 15 billion USD. Lebanon does not have this amount of money and trying to cover something means directly bankruptcy for the country. I have read and heard many statements from different world leaders, banks and institutions that promised financial aid for Lebanon. How much? It is not clear. To be honest, there were some palpable actions so far. But what really helps Lebanon is its political class. The international community promised to offer money, but Lebanese politics have to change and to adopt real reforms in order to unblock huge amounts of money.
Fifthly, obviously, this crisis leaves Lebanon with a huge debt. The quickest option is the IMF but a future financial deal is conditioned by reforms inside Lebanon. requirements for talks to move forward.
Finally, along with a financial crisis and catastrophic consequences after the explosion, Lebanon, as the rest of the world, is struck by the coronavirus pandemic. Hospitals were already full and lacked many medical supplies, even before the start of the pandemic. Not, the deficiencies are even more acute.
For more info, see my previous articles: