The Economist - USA (2020-08-08)

34 Middle East & Africa TheEconomistAugust 8th 2020

2

1

turetookflight.Anestimated300,000peo-

ple,nearly5%ofthecountry’spopulation,

were left homeless by the blast. Some

foundshelterwithfamilyorfriends.Oth-

ershadnowheretogo.Theysweptbroken

glassofftheirfurnitureandbeddeddown

forthenightinflatswithoutwindowsor

doorsorelectricity.Thecitylookednobet-

terthenextmorning.Workerswithbrooms

sweptupglassuntilitoverfloweddump-

stersandpiledinheapsonthekerb.Pedes-

trianslookedupnervouslyastheywalked,

lestfallingdebrislandontheirheads.

Repairingthedamagewouldbea tallor-

deringoodtimes.Thesearenotgoodtimes

inLebanon.Theeconomyhasallbutcol-

lapsed since October. Its currency, the

pound, had beenpegged for decades at

1,500tothedollar.Butthecountryhasrun

shortofdollarstomaintainthepegandfi-

nanceitsyawningtradedeficit.Itcanno

longersustaina years-longPonzischeme

thatsawthecentralbank(BanqueduLi-

ban,orbdl) borrowdollarsfromcommer-

cialbanksinexchangeforabove-market

interestpayments.Thepoundnowtrades

atmorethan8,000ontheblackmarket,an

80%devaluationfromtheofficialrate.The

government defaulted on its debts in

Marchforthefirsttimeinhistory.

FormostLebaneselifehasbecome a

seemingly endless succession of crises.

Consumerpricesarerisingby90%a year

andby246%forfood.A500-gramjarof

Nescafécancost10%ofthemonthlymini-

mumwage;a kiloofbeefgoesfor15%.The

armystoppedservingmeattosoldiersto

cutcosts. OnJune30ththegovernment

raisedbreadpricesbya third,thefirstin-

creaseina decade.Halfthecountrynow

livesbelow thepoverty line,and three-

quartersmayneedaidbyyear’send.

Fuelshortageshaveledtointerminable

midsummerblackouts:powercutsinBei-

rut,normallythreehoursa day,stretched

upto 20 hoursinJuly.Back-upgenerators

ranoutofdieselorbrokedownfromover-

use,leavingmanyLebaneseinhot,dark

apartments.Ogero,thestatetelecomsmo-

nopoly,haswarnedofinternetoutagesif it

cannotpoweritsinfrastructure.Themain

publichospitaltreatingcovid-19patients

hadtoshutwardsandturnoffair-condi-

tioners because of the black-outs. Petty

crimewasalreadyontherise,evenbefore

theexplosionthatleftthousandsofapart-

mentsopentointruders.Onemanheldup

a pharmacyatgunpoint—fornappies.An-

otherrobbeda pedestrian,thencameback

toapologise,sayingheneededthecashto

feedhisfamily.

Thegovernment,installedinJanuary,

wasmeanttobeatechnocraticonethat

wouldtackletheeconomiccrisis.It hasac-

complishedalmostnothing.Afterthede-

faultitaskedtheimffora financialagree-

mentworthupto$10bn.Severalmonths

and 20 meetingslaterthereisnoprogress

towardsadeal—becauseLebanonisstill

negotiatingwithitself.

The cabinet and the parliament are

bickeringaboutthesizeofthefinancial

sector’slosses.In aneconomicplan re-

leasedinApril,thegovernmentestimated

a netlossof154trnpoundsbetweenthebdl

andcommercialbanks.(Theplanoptimis-

ticallyenvisionsanexchangerateof3,500

poundstothedollar.)Thatwasthestarting

pointfortalkswiththeimf. Butthecoun-

try’sbankersarefuriousaboutthegovern-

mentplan,whichwouldcleanupbalance-

sheetsbywipingoutshareholdersandthe

largestdepositors.Theyreleasedtheirown

accountingthat estimateslosses atless

thanhalftheofficialfigure,largelythanks

toan evenmore unrealisticestimateof

Lebanon’sfutureexchange rate.“It’sthe

samekindoffinancialwizardrythatgotus

intothismess,”saysHenriChaoul,a for-

merfinancialadvisertothegovernment.

MrChaoulresignedinJuneinprotest

overtheimpasse.Theimfisstilltalking

withthecabinet:theyhelda meetingon

July10thfocusedontheelectricitysector.

Butthefundhaswarnedthatnegotiations

canprogressonlyif Lebanonagreesonone

setofnumbers,orifthecabinetpushes

throughafewmeaningful reforms asa

showofgoodfaith.Neitherhashappened.

“It’scriminal,”saysAlainBifani,a former

director-generalof thefinanceministry,

whoalsoquithisjobinprotest.

Addtothis,now,thedevastationofthe

Lebanesecapital.Damageattheportalone

willcosthundredsofmillionsofdollarsto

fix.Among thebuildingsdestroyedwas

Lebanon’s main grain silo, leaving the

countrywithlessthana month’ssupplyof

wheat.Homeownerswonderhowtheywill

findthecashtopayfornewglassorforalu-

miniumwindowframes.Businessowners,

barelyekingouta profitbeforethedisaster,

saytheywillcallitquitsratherthanre-

build.Thegovernmentpledgedtoinvesti-

gate,andtofindtheculpritswithinfive

days—enoughtimetonamea scapegoat,

butnottoconducta seriousinquiry.

Thereisrageinthestreets,butalsores-

ignation.Lebanonhasenduredmuchinits

modernhistory:acivilwarfrom 1975 to

1990,occupationsbyIsraelandSyria,a ru-

inouswarwithIsraelin2006,andmyriad

otherconflictsandattacks.TheLebanese

pridedthemselvesontheirabilitytopick

themselvesupandrebuildtheirsociety.

This moment feels different. The eco-

nomicmodelhasfailed;sotoothepower-

sharing systemthat kept the peace be-

tweenthecountry’sreligionsafterthecivil

war.Asthecountrysinks,itsvenalpolitical

classseemsoblivious. Goneistheopti-

mismofOctober,whenhundredsofthou-

sandsofLebanesetooktothestreetstode-

mand the overthrow of an entrenched

regime.Nowtheirthoughtsareturningin-

creasinglytoemigration. 7

“W

eareprotestingfor Mali,” says

CheickOumar Kanté on the streets

ofBamako,thecapital, “because Mali is on

theroadtoextinction.” Since June 5th tens

ofthousandshavetaken part in demon-

strationsorganisedby a group of opposi-

tion leaders calledthe m5-rfp and bol-

stered by the moral authority of a

charismaticimam,Mahmoud Dicko. The

protestershavebeen complaining angrily

about the growing jihadist insurgency,

Mali’sdireeconomyand recent dodgy elec-

tions.“Nothingworks in this country any

more,”saysOusmane Dembele, a demon-

strator.Theirmaindemand is for President

IbrahimBoubacarKeïta to resign.

Thegovernment’s response has lurched

between concessions and violence. The

protestshadbeenlargely peaceful until the

weekendofJuly10th, when security forces

firedonthecrowds,killing at least 11 people

andwounding85.Protesters lit fires in the

NationalAssemblybuilding and occupied

thestatetelevisionpremises. After a truce

for the Muslim holiday of Eid al-Adha,

protestshavebeenstarting up again.

Westerngovernments are nervous too,

sinceMaliisatthecore of Europe’s fight

againstjihadistsinthe Sahel. France has

5,100troopsinthisfragile region; in 2012 it

intervenedwhenjihadists almost toppled

Mali’sgovernment.France’s allies, includ-

ingAmerica, Britain and Germany, have

alsosentforces,some in a contingent of

BAMAKO

Regionalleadersare struggling to

mediateinMali

Mali

Fearandloathing

intheSahel

Anger in Bamako