A New Lebanese Lira Currency Collapse: 100,000 Pounds vs. US Dollar – DW Arabic

Although two years have passed since the horrific explosion, the sight of the destroyed silos still hurts the Lebanese today. Recently, a fire broke out, officials said, as a result of the summer heat setting fire to the rotting grain inside, which subsequently led to the collapse of part of the silos. Citizens rejected a proposal to remove the destroyed buildings and insisted that they remain to remind everyone of the tragedy. The Lebanese view the explosion as a symbol of corruption and mismanagement by the ruling elite.

The suffering of many countries is increasing due to the Russian invasion of Ukraine. However, following an agreement sponsored by Turkey and the United Nations between Russia and Ukraine, the first ship carrying Ukrainian grain left the port of Odessa, heading to Lebanon. According to the agreement, the cargo ship “Razoni”, which flies the flag of Sierra Leone, will be inspected first in Istanbul by the concerned parties, before continuing its journey towards its final destination, which is the Lebanese city of Tripoli.

As part of the latest repercussions of the Russian-Ukrainian war, the Public Prosecutor in Lebanon issued a decision to seize a ship carrying barley, which the Ukrainian embassy in Beirut said was illegally loaded from areas in Ukraine that have come under Russian control. The ship “Ludicea”, flying the Syrian flag, was detained in the port of Tripoli in northern Lebanon, while the General Directorate of Customs and Internal Security Forces began conducting investigations.

Lebanon is suffering from a severe economic crisis, which the World Bank classified as one of the worst in the world since 1850, which led to the local currency losing more than 90% of its value against the dollar, and the central bank’s ability to support the import of vital commodities, including wheat, fuel and medicines, has diminished. Since the beginning of the crisis, the Lebanese authorities have held part of the responsibility for the collapse of more than a million Syrian refugees who live in difficult humanitarian conditions after fleeing the war in their country.

In light of the economic crisis, the Lebanese Ministry of Economy has raised the price of bread several times over the past two years. The Russian invasion of Ukraine exacerbated the difficult situation in Lebanon due to the suspension of wheat exports, especially since Lebanon imports 80% of its needs from Ukraine. Every day, the queues in front of bakeries are getting longer, and the price of a bundle of subsidized bread (6 loaves) has risen to 13,000 Lebanese pounds, while its price exceeded 30,000 on the black market.

The Lebanese government’s announcement in late 2019 of its intention to impose a fee on free calls via electronic messaging applications such as WhatsApp, angered the Lebanese. The announcement coincided with the collapse of the price of the lira and the exacerbation of the bread crisis, prompting thousands to take to the streets to express their rejection of the decision and their desire to overthrow the regime.

Despite the Saad Hariri government’s retraction from imposing a financial fee on communications, the protests continued. Demonstrations increased and the ceiling of demands rose to the demand for the departure of the ruling class, which has not been affected by fundamental change for decades and is accused of corruption and incompetence. In the wake of the demonstrations, Hariri resigned on October 29, 2019, while the pace of the financial crisis accelerated. Depositors’ funds were frozen amid a hard currency liquidity crisis and the collapse of the local currency

On August 8, 2021, thousands of Lebanese demonstrated against Lebanese officials whom they held responsible for the tragedy of the Beirut port explosion. The demonstrations witnessed violent confrontations between angry protesters and the security forces, who used tear gas and rubber bullets. Later, a number of ministers announced their resignation, until Prime Minister Hassan Diab announced on August 10, 2021, the resignation of his government.

On the first anniversary of the port explosion, French President Emmanuel Macron organized an international conference to support Lebanon, the third in cooperation with the United Nations. France pledged 100 million euros in financial aid to Lebanon, in addition to half a million doses of coronavirus vaccines. Through the conference, Paris sought to collect urgent humanitarian aid worth $350 million.

In February 2020, Lebanon recorded its first case of coronavirus. The burdens gradually accumulated on the health sector, which was exhausted by the dire economic situation in the country. In the absence of government plans to deal with the virus and the continuation of economic and political crises, the country’s epidemiological situation began to take a worse turn with the outbreak of the Delta mutant.

In light of the accelerating economic collapse, more than half of the Lebanese are below the poverty line, according to the United Nations. The Lebanese pound also lost more than 90 percent of its value against the dollar on the black market, while the prices of all materials and commodities increased, so that the prices of basic foodstuffs rose by more than 70 percent in two years. The country is also witnessing a fuel crisis, a shortage of medicine, and power outages of up to 22 hours.

On October 14, 2021, the situation flared up due to sectarian objections to the performance of the judicial investigator in the port explosion, Judge Tariq Al-Bitar, and a shooting took place, killing 7 people, and the case was frozen due to the influx of complaints against the judge by officials who accused them of being involved in the disaster. In the same month, the Gulf states summoned their ambassadors, and Saudi Arabia banned Lebanese imports, in protest against the statements of then Information Minister George Qirdahi over the war in Yemen.

With the fires returning to the destroyed grain silos, the Beirut sky glowed orange in the darkness of the night inside a port that still looked like a disaster area, amid expectations of more collapses, not only in buildings but in various sectors. Health and environment experts recommended that residents of the area near the silos wear special masks to protect them from the effects of burning rotten grains and the germs they carry. When will Lebanon get out of its crises? Prepared by: Emad Hassan / Iman Maluk