Penny pinching and blackouts; The Lebanese middle class crushed by the crisis

  • The Lebanese economy collapsed in 2019 under a mountain of debt
  • Sectarian leaders have been unable to solve the problems
  • Middle-income families face tough choices in times of crisis
  • Gulf donors back down amid rising Iranian influence

BEIRUT, Jan 23 (Reuters) – Lebanese teacher Sara Wissam and her husband were well off before a run on the local currency decimated the value of their salaries and pushed them into poverty.

The fate of the Beirut couple is common to the entire Lebanese middle class, which has been forced to make once unthinkable choices by the worsening economic crisis: cut back on food, cancel trips or ask to emigrate permanently.

“Before, our income lasted a month,” the mother of three told Reuters.

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“Now it’s not enough to go to the supermarket to buy basic necessities,” said Wissam, describing how she rarely buys meat, cuts down on cheese and carefully chooses even the smallest treats for her youngsters. children.

Ayman Hadad, a 28-year-old college graduate who has found a job in a shop, earns the equivalent of $125 a month and wants to join migrant friends. He applied to go to Canada. “Enough of Lebanon. We have lost hope,” he said.

Lebanon’s descent into financial ruin began in 2019, the result of a mismanaged spending spree that drove up debt, political paralysis as rival factions quarreled and the reluctance of foreign lenders to bail out the country unless it reforms itself.

The World Bank ranks the crisis among the world’s worst since the mid-19th century, devastating a country once considered a wealthy and liberal outpost in the Middle East before civil war broke out from 1975 to 1990.

About 80% of the population of 6.5 million are considered poor; in September, more than half of families had at least one child who skipped a meal, UNICEF said, compared to just over a third in April.

The currency lost more than 90% of its value and banks blocked savers’ accounts. According to some estimates, public debt has reached 495% of gross domestic product in 2021, well above the levels that crippled some European states a decade ago.

Adding to people’s frustration is the government’s inability to address the problems so far.

Interim administrations have ruled Lebanon for much of the past three years, and since the cabinet resigned after the devastating 2020 Beirut port explosion, politicians have fought over who should investigate who was to blame.

Meanwhile, people are seeing signs of social and economic collapse. The state-owned telecommunications company has shut down the internet in parts of Beirut for lack of fuel in recent days and a gunman has taken a bank hostage demanding access to his trapped savings.

‘EMPTY REFRIGERATOR’

Lebanon’s national power grid was creaking before the crisis, with continuous blackouts across the country. Today, a bankrupt government can barely keep its power plants running, and homes often only get one hour of public electricity a day.

Yola al-Musan, who runs a supermarket in Beirut, uses electricity from a shared neighborhood generator to keep the lights on at home.

When the national grid turns on, Musan rushes to turn on the washing machine because only then does it have a strong enough current.

For teacher Wissam, it has become difficult to put enough food on the table for her family, even though she and her husband both have stable jobs.

Before the crisis, the combined salary of Wissam and her husband was 3 million Lebanese pounds per month, which at the exchange rate at the time of 1,500 to the dollar, was around 2,000 dollars.

Now their combined earnings are worth the equivalent of $140, even after Wissam’s modest pay rise. The currency fell to 25,000 to the dollar, driving up the prices of imported goods and local products.

“Lebanese leaders have fun insulting each other and accusing each other of corruption. In fact, they are all corrupt and thieves,” she said, echoing widespread public and international criticism of the crisis management.

Politicians, some former militia leaders and others from families who have exerted influence for generations on the country’s Christian and Muslim communities, acknowledge that corruption exists but deny that they are responsible for it and say they do their best to save the economy.

But a long and ongoing dispute over who should chair the port blast investigation has contributed to delays in talks with the International Monetary Fund, seen as key to unlocking France-led overseas support.

Once-reliable Gulf donors such as Sunni Muslim Saudi Arabia already backed down years ago, expressing anger at Iran’s growing influence in Lebanon through Hezbollah, a group backed by Tehran which has a heavily armed militia.

Najib Mikati, the billionaire prime minister whose post is held by a Sunni under the sectarian political system, has tried to mend the Gulf ties. Hezbollah, in turn, has stepped up criticism of the Gulf states and organized conferences for domestic opponents of monarchies.

Meanwhile, the cabinet is set to hold its first meeting in more than three months on Monday to discuss a draft budget which it hopes will ease financial pressures and quell public anger.

“If each of them gave a small part of their wealth to the poor, there would be no poor people in Lebanon,” said Shadi Ali Hamoud, 39, after returning home from working in the kitchen of a restaurant. “Look at the fridge, it’s empty.

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Additional reporting by Nayera Abdallah; Written by Edmund Blair; Editing by Mike Collett-White

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