Adonis Diaries

A repeat of 1915 famine? Lebanon economic situation

Posted on: July 3, 2020

A repeat of 1915 famine? Lebanon economic situation

‘People will die within months’:

Is Lebanon heading for famine as Corona pandemic accelerates hunger?

And as the colonial powers, headed by USA, sanctioning Lebanon and Syria economy and financial weak conditions?

Hit by its worst economic crisis in modern history, there are fears the country is about to repeat the 1915-18 famine

Note: Hassan Nasrallah, general secretary of Hezbollah, promised that the organization will never let famine set in. Hezbollah maybe the only organization bringing in dollars into Lebanon. I trust in the promises of Hassan.

Greek former finance minister Yanis Varoufakis said:  Lebanese must have the courage to nationalize the banks and restructure the Central Bank, issue a new currency and desist from seeking IMF money…” We have a pseudo-State and a pseudo “citizen” 

The following description of the situation could be accurate from the Pseudo-State perspective of managing the helplessness morale of the 90% of the “citizens”

Mohamad barely looks surprised when his phone vibrates with an update on the devaluation of the Lebanese pound.  

“Great, now my salary is worth $60,” the 30-year-old Syrian economics teacher turned refugee said, shaking his head.

In the past week alone, the Lebanese pound has lost over 40% of its value.

Millions of people are watching their savings and salaries disappear as food inflation hits nearly 200%.

(For example, my retirement monthly wage with the Engineer Order is supposed to be $900. The bank where the money of retirement is deposited is still valued as 1, 350,000 Lira. Practically, with one $ worth 8,000 Lira, my net check is barely $160 today and being devalued repeatedly. Basically, I am receiving 1/6 th of what is my due)

Mohamad stood in the market in Beirut’s Shatila refugee camp, trying to calculate how much food he could afford for himself, his wife and two children.

In the end, he decides on potatoes for dinner: three potatoes sliced up, with half a red pepper and some cucumbers on the side. That would have to be dinner for four.

“Before the dollar crisis, my monthly salary as a freelance accounting assistant would last 15-20 days. Now it’s only enough for five days. I think they will probably make us all leave our jobs at the end of July… my family are already past the minimum that we can survive on. We borrow from the market to eat for the rest of the month.”

Hit by its worst economic crisis in modern history, the Lebanese pound has lost over 80% of its value since October, when nationwide anti-corruption protests began to rock the country.

Despite a decades-long peg of 1,500 to the dollar, people now widely use the black market value of the pound as a reference of the currency’s real worth.

(The Exchange syndicate, legit or not,  is in cohort with the Central Bank and the Banks: They receive the orders and supplies for the exchange rate that devalued to 8,000 Lira to the $)

According to a recent UN report, by the end of April over half of the country was struggling to put the most basic produce on the table as food prices had risen by 56% since October. Preliminary results show that between mid-March and May, they rose by another 50%.

(Actually, all produces and product have more than tripled in price, and the locally prod

Workers wearing protective face masks serve a large crowd of customers at the counter inside a local bakery in Beirut, Lebanon
Workers wearing protective face masks serve a large crowd of customers at the counter inside a local bakery in Beirut, Lebanon CREDIT: Hasan Shaaban /Bloomberg

Accelerated by the pandemic, unemployment is soaring, the value of wages are plummeting and prices continue to skyrocket. Lebanon is also host to around 1.5 million refugees – the most per capita in the world.

And it is no longer refugees and other vulnerable people who are concerned about being able to feed their families as Lebanon’s economic turmoil continues to spiral out of control.

“From aid given by the WFP, refugees could afford some food in the past,” said Martin Keulertz, Assistant Professor in the Food Security Programme at the American University of Beirut.

“They were able to consume some lentils, some labneh and so on, but rarely vegetables. Fruits were difficult and meat was out of the question. What is very concerning is now the majority of Lebanese people are on a similar trajectory,” he said.

Could Lebanon be heading to a repeat of the 1915-18 famine in which the country lost half of the population? “Absolutely,” said Dr Keulertz.

(Germany and Turkey imposed a stop to any import to Lebanon during WWI and hoarded what was still available in foodstuff. Lebanese were forced to go with their mules and donkeys to Syria (Houran province) in order to bring wheat and basic foodstuff)

“By the end of the year, we will see 75% of the population on food handouts, but the question is whether there will be food to hand out.”

“Surely in the new few months we will see a very grave scenario in which people will be starving and people will die from hunger and the knock-on effects of starvation.”

Mohamad Chreim in his butcher's shop
A kilogram of meat in Mohamad Chreim’s butcher’s shop used to cost the equivalent of $11, but now costs $33 as he has been forced to almost triple his prices since October. CREDIT: Abbie Cheeseman

The prospect of widespread hunger in Lebanon also raises increased fears over a second wave of coronavirus, Dr Keulertz explained, as people with compromised immune systems are far more likely to die.

Mohamad is among the more fortunate Syrian refugees in Lebanon in that he still has some work.

According to a survey published last week by the UN World Food Programme (WFP), 3 out of 4 Syrians in Lebanon have lost their job or have no income.

Abdullah Al-Wardat, WFP country director for Lebanon, told the Telegraph that WFP now estimates 83 per cent of the estimated 1.5 million Syrians here are surviving on less than $2.90 per day, the minimum needed for physical survival and a category that is aligned with abject poverty.

After paying rent, Mohamad has the equivalent of $66 to spend on food for his family.

Milk for his children cost $18 before the dollar-crisis began, now even after choosing a lower-quality option, the cheapest he can buy it for is $33. A bag of rice is now $10, sugar is $8. The basic staples he used to be able to buy for those $66 would last his family ten days, now they last two.

Much like the economic collapse, Lebanon has been sliding towards food insecurity for decades.

Crumbling infrastructure, a lack of state investment and political mismanagement have left the agriculture sector contributing just 3% to the annual GDP, despite providing jobs for a quarter of the national workforce.

Like every sector in Lebanon, agriculture is riddled with corruption and powerful traders exploiting both farmers and consumers. Now, coronavirus and the economic crisis have brought Lebanon’s unsustainable approach towards almost every part of its economy crashing down.

The result is that Lebanon imports up to 80% of its food, leaving it vulnerable to price fluctuations and now the collapse of its own currency.

The struggle for food importers is only set to get worse as they are now forced to buy around 80 per cent of their foreign currency for imports on the ever-increasing black market rate, aside from a list of 30 essentials that are subsidised by the government.

There are two initial pillars of food security, explained an official at the UN’s World Food Programme.

Firstly, having enough food in the country and secondly, people having the purchasing power to access it.

Lebanon is facing a double whammy with a hit to both pillars at the same time.

Imports have already dropped by an estimated 50 per cent on last year, said Hani Boshali, president of the Syndicate of Importers of Foodstuffs, Consumer Products and Drinks.

The struggle for food importers is only set to get worse as they are now forced to buy around 80 per cent of their foreign currency for imports on the ever-increasing black market rate.

According to Dr Keulertz, Lebanon needs around $500 million per year for food imports, particularly as only 13 per cent of its land is arable.

“If you do the maths, Lebanon can only feed around 130,000 people per year. The food crisis needs foreign intervention – it is a lot cheaper to save this country than it will be to allow a country that has done Europe a service by hosting refugees to collapse,” the AUB professor said.

Crowds queue to buy bread at a local bakery in Beirut, Lebanon
Crowds queue to buy bread at a local bakery in Beirut, Lebanon CREDIT: Bloomberg

In all corners of the tiny Mediterranean country, the middle class are becoming poor and the poor are sliding into destitution, as food prices are pushed beyond the means of most people.

Sixty-year-old Mohamad Chreim has owned a butcher’s shop in central Beirut for over 40 years. “I was doing well before the crisis, making at least one or two million pounds. I was so busy I wouldn’t stop all day”.

Now Mr Chreim is paying 200,000 pounds per day out of his pocket just to keep his business open. “People who used to buy in kilograms cannot afford meat anymore, so when they come in they buy in the grams.”

A kilogram of meat from Mr Chreim’s shop used to cost the equivalent of $11, but now costs $33 as he has been forced to almost triple his prices since October.

“If the economic crisis continues, who knows, I may not be able to open tomorrow. I am paying out of my own pocket to stay open because I’ll be depressed if I stay at home”.

Like everyone living off their savings, Mr Chreim is unsure how long he will be able to survive this way.

While restaurants went empty, the queues for bakeries stretched over the weekend amid news that bread would stop being distributed to supermarkets and shops in light of the collapsing currency.

(Cost of flour is supposed to be mostly shouldered by the State, but it is Not correct. Anyway, fancy bakeries and sweets are forcing the traditional bread bakery to increase the price of 900 g of bread to 2,000 Lira)

The sight of people searching through bins for food and long queues for aid distribution have become commonplace in a city that was not too long ago a playground for the rich and famous.

As cash runs out and the purchasing power of the average Lebanese continues to plummet, a barter economy is emerging. (Lebanese have no tradition in business barter, just bartering in ceremonies)

With commodities reaching almost triple their original prices, Facebook is slowly filling with posts of people trying to trade their personal belongings for basic necessities.

“Trading for a bag of Oui Oui diapers and a bag of Kleo milk”, one post read with a picture of a set of drinking glasses attached.

  • Additional reporting: Angie Mrad

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adonis49

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