Updated: Aug 1, 2020
The 1958 Lebanon crisis was a Lebanese political crisis caused by political and religious tensions in the country that included a United States military intervention. Lebonon got thrusted in its worst economic crises in decades due to flawed policies making its currency collapsing, business shutting, prices for basic goods skyrocketing and the threat of hunger looming for its poorest people.
Known as an oasis of prosperity and relative stability during the past decade of Middle East turmoil, Lebanon is descending into poverty, despair and potentially chaos. Economists are now predicting a Venezuela-style collapse, with acute shortages of essential products and services, runaway inflation and rising lawlessness — in a country at the heart of an already unstable region. The Lebanese pound has lost over 80 percent of its value since October. Prices are soaring and goods disappearing. Lebonon occupies a uniquely fragile position as a country in a state of war with one of its neighbours (Israel), located next door to another war (Syria’s) and in the crosshairs of the conflict between the United States and Iran.
While politicians and bankers trade blame on the airwaves, the country’s pound has lost nearly 60% of its value on the black market in the past month, threatening to suck the economy into a hyper-inflation spiral. Efforts to halt the pound’s decline, including with a new pricing platform for exchange bureaus, have yet to bear fruit. One currency changer said a fearful public was hoarding dollars and he couldn’t see a bottom unless trust was restored. Amidst all this, the French Foreign Minister said that “IMF only way out of Lebanon crisis”. Above all, Lebonon economic crises has also threatened to destroy its middle class. If we highlight the main cause of all the catastrophe it would simply comprise of bad planning, corruption and the sudden shock on pandemic which led the Lebanese currency to crash and consumer prices to jump.
- VANSHIKA MAHAJAN