After years of economic crisis, Lebanon has again seen protesters take to the streets, this time in a violent fashion. In a suburb outside Beirut, demonstrators targeted banks, sometimes burning them down, venting their anger towards the financial controls that have left their life savings in tatters. Protesters have been demanding that banks need to be accountable to them and protect their savings with some form of democratic accountability.
The crisis has been ongoing in Lebanon since 2019. The Lebanese pound has lost an astonishing 98% of its value against the US dollar, leaving many people’s life savings virtually worthless. Financial controls imposed by the authorities have only worsened the situation, intensifying the anger of those who have been financially ruined.
Origins of the crisis:
Lebanon’s strategic location made it a focal point for Western powers and their allies in the Middle East, leading to international involvement in the Lebanese civil war. The conflict also had an ideological dimension, with various factions calling for reunification with Syria, the democratization of the government, or neo-liberal reforms. In 1990, a new constitution was adopted to end the civil war, aiming to protect market interests and implement neo-liberal economic policies.
Rafic Hariri, a prominent business tycoon, played a significant role in Lebanon’s post-war era. As Prime Minister from 1992 to 1998 and again from 2000 to 2004, Hariri implemented many of the neo-liberal reforms that contributed to Lebanon’s current crisis. However, his tenure was also marred by corruption and personal enrichment, as evidenced by his substantial increase in personal assets during his time in power. Hariri used the military to suppress dissent and allocated reconstruction contracts to other wealthy business moguls, further exacerbating inequality and corruption.
The years that followed were marked by political instability and external influences. The assassination of Rafic Hariri in 2005, attributed by Western powers to pro-Syrian forces in Lebanon, triggered mass protests known as the Independence-05 movement. These protests, supported by America and France, aimed to establish democratic governance and were condemned by Syria and Iran. Nevertheless, Hariri’s party continued to hold a prominent role in parliamentary politics.
The invasion of Iraq and Syria by the United States further destabilized the region, and Lebanon experienced spillover effects. The influx of approximately 1.5 million Syrian refugees into a country with a population of around 6.9 million strained Lebanon’s resources and security, aggravating sectarian tensions and heightening insecurity among the population.
The combination of political instability and a highly neoliberal constitution has kept Lebanon in a state of economic disaray. Many businesses try to hoard foreign currency, leading to inflation. The government responded by tightening banks, making it difficult for the common people to use their local currency. As the banks have made withdrawal harder, many of them had to watch helplessly as their savings became worthless. At the same time, the wealthy elite in Lebanon have become more ostentatious with their wealth.