The most explosive thing to keep an eye on in Lebanon is also what no one wants to think about seriously. Indeed, it is not terrorism, Syrian refugees, or the latest ostentatious squabble among the country’s political factions. If anything can genuinely threaten the country’s hard-earned and stubborn stability—it’s the economy, stupid. What solutions are currently discussed or implemented promise at best to postpone a severe, structural crisis. Most stakeholders view this prospect as sufficient, as the country’s economy has for decades been living on borrowed time. But that is the critical mistake they should want to avoid: a much flaunted “resilience” has become part of the problem, allowing for all sorts of anomalies to stack up, relentlessly bringing the system closer to breaking point.
The price of a sack of Lebanese flatbreads was fixed at 1500 LBP in 1997, but its weight went from 1,5kg to 900g today
Anecdotal signs of economic stress are multiplying. In 2016, a dangerous slowdown in foreign currency inflow forced the central bank—Banque du Liban or BdL—to intervene by making the kind of offer big money couldn’t refuse: a 20% kickback on US dollars deposited for as little as one year. Sustaining an overpriced real-estate market has also required legislative and financial stimuli orchestrated by BdL. In the absence of reliable figures, the IMF guesstimates growth at less than 1%. A decline of the insurance sector attests to slowing business across the board. Shop fronts have been putting up signs for rent or sale all over Beirut. At the bottom of the chain, taxi drivers jump on the first occasion to complain of ever longer hours to make ends meet.