The Lebanese pound sank to a new low on the market on Friday. The pound was trading at 25,000 to the dollar, or nearly 17 times less than its official peg value of 1,500.
The new record, topping a previous low of more than 24,000 earlier this week, adds to the troubles of the newly-formed Lebanese government, which has failed to meet for more than a month amid a festering diplomatic crisis with Gulf countries.
For many reasons, the rising rate should not be referred to as “black”. It’s the actual market rate, but influenced by factors that are not necessarily organic to the market and it’s pushed back and forth by financial engineering moves by various actors.
In Lebanon, it is all in shades of grey – and I am not talking about that movie. Legal and illegal are words one uses on paper; everyone in power can turn the legal into illegal and vice versa. There are no boundaries. The state is not necessarily captured by one entity. It is also not an entity per se educating people into governable citizens (as most states do).
Lebanon is a negotiated political space between various interests, families, dynasties, but also protest movements, civil society organizations, and foreign interests (be they military, political or financial). Each strand of society sets its own rules, develops its network and then negotiates its political role and standing against other networks.
It’s a system older than the state of Lebanon and it will be hard to shake off. Definitely not by the next round of elections, and not even in a decade.
Not even the French Revolution was successful in two years, and it was followed by a bloody purge.
Corrupted systems continue. In order to be defeated, they need to be studied and their mechanisms understood. That takes time and adaptation.
The Lebanese opposition has taken a few blows lately in the professional syndicates’ elections (an interesting system of professional orders that basically function like the medieval guilds – you’re not part of them, you don’t exist, which is pretty much an abusive system). The so-called “establishment” parties scored some unexpected wins. And they scored those wins by simply through political manipulation, doing nothing in terms of concrete policies. They threw their support behind independent candidates or even opposition candidates and thus deepened the divisions between the radical opposition that wants nothing to do with the establishment, and the moderate opposition that is willing to navigate a hybrid system, make compromises (sometimes too many), and strike deals with existing parties in order to shake the past gradually.
But the opposition needs people who know how to navigate the system in order to become part of the system and change it from inside. They don’t only need people to formulate policies and align those policies to political doctrines, but also people who know how to negotiate politically, who know both worlds. They need representatives that can talk to people from both worlds and reach out to groups of voters that are also part of that patron-client system and are afraid that without it, they will not survive. Reaching out to them does not only require making oneself known, but also convincing them that it is beneficial to break that patron—client contract.
It takes time, and more than a website and policies on paper. It requires actual change, proof that things can work without patronage, that their sons and daughters can get a decent job without wasta, that their family business can survive without the backing of the local mid-level za’im who reports to the higher zu’ama.
On the edge
Plunging pound: With the currency losing more than 90 percent of its value in two years on the black market, the purchasing power of Lebanese is plummeting, and the minimum monthly wage of 675,000 pounds is now worth just $27.
Higher fuel prices: The energy ministry on Friday also raised the prices of petrol, diesel fuel, and cooking gas, according to the state-run National News Agency. Fuel prices in Lebanon are adjusted regularly to reflect fluctuations in the exchange rate. Filling a vehicle’s fuel tank now costs more than the minimum monthly wage, AFP reported.
Into despair: Lebanese protesters blocked roads once again on Monday to protest against the deteriorating living conditions in the country. According to the United Nations, four in five Lebanese are now considered poor. The World Bank estimates it may take Lebanon nearly two decades to recover its pre-crisis per capita GDP.
Uncertain future: UNICEF called on Lebanon on Tuesday to take urgent action to protect children after it documented a spike in child labor rates and food insecurity since April. “The future of an entire generation of children is at stake,” it said in its latest report titled “Surviving without the basics”.
Rejected: Lebanese courts on Thursday rejected lawsuits that had blocked the probe into last year’s Beirut port explosion, clearing the way for investigative judge Tarek Bitar to resume his work. The probe into the crime had been suspended for three weeks following several lawsuits filed by officials against judge Tarek Bitar, demanding his removal.
No errors: The Court of Cassation on Thursday threw out two lawsuits submitted by ex-premier Hassan Diab and ex-interior minister Nohad Machnouk accusing Bitar of summoning them illegally, a judicial source told AFP. It ruled there was no evidence suggesting Bitar had committed any errors, the source said.
The same court also overturned two similar lawsuits filed by lawmakers Ali Hasan Khalil and Ghazi Zeaiter, the court official said on condition of anonymity.
Also on Thursday, the Criminal Court of Cassation rejected a lawsuit filed by ex-public works minister Youssef Fenianos that had demanded Bitar’s removal from the blast probe.
All five officials had been summoned by the investigator on suspicion of negligence that led to the tragedy.
Resignations: Also, three judges, all of them women, tendered their resignation to protest against relentless political interference in the judiciary. The Higher Judicial Council rejected the resignations.
Still blocked: There were “no positive indications” that the governmental crisis would be any closer to a breakthrough, some political sources told al-Joumhouria newspaper on Saturday. “Everything that has been said in this regard is nothing more than hypotheses that are not based on serious foundations,” the sources added.
Hezbollah not compromising: Hezbollah chief Hassan Nasrallah repeated in his speech last Friday that the port blast probe was politicized and the justice system was “selective”.
Drugs and bans
Surprise spaghetti: The Syrian army said on Thursday that it has seized half a ton of Captagon concealed in a spaghetti shipment as it was being smuggled out of the country. It was the latest in a string of similar drug busts in Syria, AFP reported. Last month, Syrian authorities confiscated 180,000 Captagon pills hidden inside a box containing Arabic sweets in Damascus and, in a different bust, seized four million pills inside a vehicle on the Damascus-Homs highway. In July last year, Italy seized a record 14-tonne haul of the drug — or 84 million pills — that had arrived from Syria.
These busts should definitely be seen as linked to the smuggling activities through Lebanon that have led to the recent breakup with Saudi Arabia and several Gulf countries.
Aoun in Qatar: Lebanese President Michel Aoun arrived on Monday morning in Doha to talk about the Saudi ban and ask for help in negotiating with Riyadh.
Australia: Australia on Wednesday listed all of Hezbollah as a “terrorist organisation”, extending a ban on armed factions to the entire movement, which wields considerable power over Lebanon.
Hezbollah did not like this: the party of God denounced Australia’s decision, accusing Canberra of bowing to US and Israeli demands.
The new wave
Omicron: The new Coronavirus variant, now known as Omicron, has cast doubt on global efforts to fight the pandemic because of fears that it is a highly infectious strain.
Scientists are racing to determine the threat posed by the heavily mutated strain — particularly whether it can evade existing vaccines.
Several countries have also announced plans to restrict travel from southern Africa, where it was first detected, including Qatar, the United States, Britain, Saudi Arabia, Kuwait and the Netherlands.
No direct flights: Health Minister Firass Abiad has reassured that “Lebanon has no direct flights from South Africa or neighboring countries.” “Furthermore, very few passengers arrive from these destinations. All passengers arriving in Lebanon currently undergo PCR testing,” Abiad added, in an English-language tweet.
1/2 Concerning the new Covid variant Omicron, ?? has no direct flights from South Africa or neighboring countries. Furthermore, very few passengers arrive from these destinations. All passengers arriving in ?? currently undergo PCR testing.
— Firass Abiad (@firassabiad) November 27, 2021
In other news
No advertising: Lebanon’s government on Thursday ordered travel agents to stop promoting Belarus as a destination in a bid to stem the flow of migrants attempting to enter the European Union.
Tourism in Syria: Visitor numbers to Syria are growing again after a collapse caused by a decade of war, the tourism minister said Wednesday, adding he hoped for a return of European tour operators next year.
“We are expecting 2022 to be better than previous years,” Tourism Minister Mohammed Martini told a press conference in Damascus, announcing a 10-year plan to revive the sector.
A report by Deutsche Welle looked more in-depth at EU travel agencies restarting tours.
The number of arrivals to Syria so far this year stands at 488,000, in what he said was already an annual increase, although he did not provide last year’s figures.
Ici Beyrouth, a new publication in French, launched last Monday and promises in-depth and reliable coverage. Former L’Orient Le Jour journalists Michel Touma and Michel Hajji Georgiou are the founders.
Podcasts: Ronnie Chatah had our coworker Dana Hourany as a guest on The Beirut Banyan on Sunday evening. They spoke about the opposition rising in Beirut, political opportunities, and many other things. You’d think they would have talked about these things many times, but with the pandemic and our offices being destroyed in the blast, they actually had few chances to meet outside social media.
Mouin Jaber and Medea Azouri, spoke on Sarde after Dinner to Kamal Mouzawak, founder of Souk el Tayeb, Lebanon’s first farmer’s market.
Journalist Jad Ghosn spoke to Mona Harb, Professor of Urban Studies and Politics at the American University of Beirut. Follow Mona on Twitter.
President Michel Aoun is in Doha on Monday to discuss relations with the Gulf after the recent fallout over Hezbollah’s increasingly assertive role in the Lebanese state.
On Wednesday, December 1, the Finance and Budget Committee is set to convene and discuss a proposal to establish exceptional and temporary controls on bank transfers.