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Politicians Stand By as Lebanon Teeters on Economic Collapse

Source: Pjposullivan1/flickr

Serena Fadel ’25 does not recognize the streets of her hometown in Beirut, Lebanon. Crumbling infrastructure, the result of the August 2020 Beirut Port Explosion, remains neglected. Pharmacies’ supplies of essential medicines are shrinking by the day. Seventy-seven percent of households are food insecure, with 30 percent of children missing meals and going to bed hungry. Lebanese people wait in long lines through the night just to get gas. These are all symptoms of the economic crisis plaguing Lebanon, one that has been grouped among the top three worst economic collapses since the 1850s.

Lebanon’s economy has been on a downward spiral for years. Between 2018 and 2020, its economy shrunk by 40 percent, triggering a number of ripple effects. For one, Lebanon’s inflation rate is one of the highest in the world, reaching 239.68 percent by January 2022. This trend has completely obliterated the value of the Lebanese lira, which has now lost 90 percent of its value. As a result, the price of most basic goods has increased by about 700 percent. This, coupled with a staggering unemployment rate, has made affording essential commodities almost impossible for the average Lebanese citizen, driving 75 percent of the population under the poverty line. 

Lebanese people with the means to leave most often choose to do so, resulting in a large loss of skilled and educated workers who are critical for reinvigorating the economy. This has sunk the country into a “terminal brain drain.” For instance, waves of professors have been leaving the American University of Beirut (AUB), Lebanon’s most prestigious university and once one of the most distinguished academic institutions in the Middle East. Take AUB’s associate professor Charlotte Karam as an example. In 2020, Karam made the difficult decision to leave Lebanon: “Every fiber in my body is telling me I have to stay to continue my work from Lebanon, but my fear is for the kids and their future,” she told Reuters. Karam is not alone in her motivations for leaving the country. Yet the end result is a state emptied of its talent. 

The scale of Lebanon’s economic crisis is shocking and heart-wrenching. This begs the question: Why is this even happening in the first place? 

The World Bank has characterized Lebanon’s economic collapse as a “deliberate depression,” or in other words, a crisis imposed by Lebanon’s political elite who profit from the status quo while the people they are serving struggle to obtain basic necessities. The elite’s apathy toward the economic situation and inability to come to a consensus on reforms is exacerbated by the nature of Lebanon’s political system. Known as a power sharing system, Lebanon’s mode of governance works by ensuring a certain number of seats for each major religious sect, which include Sunni, Shiite, Druze, and Christians. So, while your position on the ideological spectrum influences your vote in US elections, it is your religion and ethnicity that determine which political party you support in Lebanese elections. 

“Power sharing systems have been said to win the war but lose the peace,” said Melani Cammett, Director of the Weatherhead Center for International Affairs at Harvard University. “They’re good at getting people to stop killing each other […] because every party […] gets a seat at the table in the new government. But then what happens is that they have to govern.” Indeed, the power sharing system was implemented under the umbrella of the Taif Accords in 1989, which signaled the end of the Lebanese Civil War. While well-intentioned, the system was ultimately set up for failure. First and foremost, it created no incentive for consensus-building across sects. And, because the goal of equal representation limits the power of any one group, there is no governing force to translate talk into action. Instead, what we see is gridlock and inefficiency—think of the US Congress today, except magnified.

The power sharing system also divides citizens along sectarian lines, making it hard for disillusioned voters to form a unified opposition. Fadel describes how the power sharing system impacted her day-to-day life. “In school, you could tell who supported which party in power based on their last name or the way they spoke. Even if you are in a taxi, within three minutes the driver will find a way to discover where you are from and consequently who you support. There is a lot of segregation.”

With the roots of the economic crisis established, where do we go from here? 

What Lebanon needs right now is international pressure and political change. The International Monetary Fund’s (IMF) April 2022 agreement with Lebanon is a step in the right direction, allocating up to $3 billion for economic reforms. However, without proper enforcement, this money could be easily misused: “Lebanon is in a serious dilemma right now because it absolutely needs aid. But if aid funnels through the existing political structures, then you’re simply […] going to have the same kind of crisis at some [later] point,” Cammett said. In order to prevent the funding from being exploited and to ensure a more transparent governmental process, the US should pressure Lebanese political leaders to implement anti-corruption reforms, perhaps through sanctions.  

The reality of the situation is that no amount of IMF funding or US pressure will revive Lebanon’s economy as long as the power sharing system does not undergo immense reform from within. Lebanese opposition groups must come together in order to drive political change. Fortunately, there is a precedent for this: In October 2019, for instance, Lebanese people blurred sectarian lines and put up a united front in protest of the heightening economic crisis. Fadel describes this protest as one of the first times she saw citizens identify themselves with being Lebanese first and Druze, Shiite, Sunni, or Christian second: “It was very transformational. My whole life I was put in a box of who I supported […] but at that time it was like suddenly everyone was able to come together.” While the protest did not lead to structural changes, it was evidence of the Lebanese population’s ability to mobilize. 

The outcome of the May 15 Lebanese elections could be a step in accelerating this change. Reformists won approximately 10 percent of the seats, replacing spots formerly occupied by members of Iran-backed Hezbollah, a Shia Islamist political party and militant group, which  enjoyed majority in parliament for the past four years. This symbolizes the Lebanese peoples’ growing disillusionment with the way the old leadership was handling the economic crisis, and it may indicate that improvements are on the horizon. 
Reinvigorating Lebanon’s economy and reforming the power sharing system are not easy tasks, but they are certainly possible. It is important that as an international community, we raise awareness about the economic collapse in Lebanon and the harsh realities of political corruption. We must also support grassroots opposition groups and political candidates that will put the needs of Lebanon first. Failing to stall and ultimately reverse Lebanon’s descent into political turmoil and economic stagnation could trigger a myriad of disastrous impacts, including a refugee crisis, violent extremism, and spillover effects into other Middle Eastern countries.