TheEconomistAugust 8th 2020 Leaders 912 ThatmuchwasclearevenbeforetheexplosionshoweredBei-
rutwithbrokenglassandpiecesofrubble.FormonthsLebanon
hasbeenmiredina debilitatingeconomiccrisis,becauseofa
rottenbankingsectoranda collapsingcurrency(seeMiddleEast
&Africasection).TheLebanesepoundhaslostabout80%ofits
valueontheblackmarketagainstthedollar.BecauseLebanon
importssomuch, inflationhas spiked.The governmentde-
faultedonitsdebtsmonthsago.Theeconomywasweakbefore
covid-19forcedpoliticianstolockdownthecountryfortwo
monthsearlierthisyear.Nowitisina coma.Thepovertyrateis
expectedtorisefrom45%in 2019 tomorethan75%bytheendof
thisyear.Manybusinesseshavegonebust.Thosethatreopened
hadtocloseagainrecentlybecauseofa newsurgeofinfections.
Withoutanswers,thegovernmentaskedthe
imfforhelp.Thefundwantsa modestshowof
goodfaith,suchasa newlawoncapitalcontrols
ora reformoftheloss-makingelectricityindus-
try.ButLebaneseofficialscannotevenagreeon
theseverityofthecrisis.Theyhavespentweeks
bickeringoverhowtoestimatethelossesracked
upbythecentralbank.imfofficialshavelooked
onwithdismay.Evensomeinthegovernment
havehadenough.OnAugust3rdtheforeignministerquit,say-
ingthatLebanonrisksbecominga failedstate.“Iparticipatedin
thisgovernmentonthebasisthatI haveoneemployernamed
Lebanon,”NassifHittiwrote inhisresignationletter,“andI
foundinmycountrymanyemployersandconflictinginterests.”
It isa newwayofdescribinganoldproblem.FordecadesLeb-
anonhascarveduppoliticalpoweramongitsreligionsandsects
asadeviceforkeepingthepeacebetweenthem.Thoughde-
signedtoensurethatallLebanesehavea sayingovernment,the
systemhasbeencapturedbyanentrenchedelite. Thiselite
handsoutgovernmentjobsbasedonsect.Withpowerguaran-
teed,it canplunderministries.Thewasteassociatedwithitspa-
tronageschemescostsLebanon9%ofgdpeachyear,saysthe
WorldBank.Corruption is rife. Residents of Beirut note that the
explosionoccurred in the city’s port, known locally as the “cave
ofAliBabaandthe 40 thieves”, owing to allegations of theft, brib-
eryandembezzlement at the government-owned facility.
MostLebanese want to ditch the power-sharing system. Ever
fewerfeeldefined by their religion. (A growing number are not
devoutatall.)Big protests in October forced out the previous
government,which was also incompetent. The current one en-
teredofficepromising change, but has accomplished little.
Thatis,inpart, because interests stand in the way. The war-
lordswhowrecked Lebanon in the civil war are now the politi-
cianswhostealfrom it. Groups such as Hizbullah, a Shia militia-
cum-politicalparty, face few constraints. Foreign powers, such
as Iran, which backs Hizbullah, and Saudi Ara-
bia, which backs the Sunni elite, would surely
try to scuttle reforms that diminished their cli-
ents or benefited their rivals.
They all play on fears of a sectarian power-
struggle that might leave some groups worse
off—or sink the country back into violence. The
magnitude of the explosion at the port called to
mind the massive car-bomb that killed the
primeminister, Rafik Hariri, a Sunni, in 2005. A un-backed court
isduetodeliver a verdict later this month in the case of four Hiz-
bullahmembers accused of his assassination.
Therewasa time when such fears seemed like a good reason
tomove slowly in unpicking the power-sharing system. But
thoseinpowerare using the crisis to hook more of their follow-
ersonthehandouts they provide. And the cost of moving slowly
isincreasinglyclear. It was not fighting or foreign occupation
thatledtothedestruction of a large part of Beirut. It was incom-
petencebya corrupt and broken state. Only bold action will fix it.
Thegovernment should do away with the power-sharing system
soonerratherthan later, and replace it with something more
democraticand meritocratic. 7C
onsider thefollowing thought experiment. If you fail to eat
a pizza within an hour, you will die from hunger. What do
you do? Most people would immediately order a pizza—and not
just one Margherita, but lots of them, from several different par-
lours. In order to maximise the chances that at least one pizzeria
got you what you needed in time, you would not care that some
of the pizza would be sure to go to waste.
The world is hungry for a vaccine against covid-19. So far
about 700,000 deaths have been recorded from the disease, and
the total is increasing at a rate of roughly 40,000 a week. If you
also include unrecorded deaths, the actual numbers are much
higher. Meanwhile, the global economy is experiencing its
sharpest contraction since the Great Depression, of perhaps 8%
of gdpin the first half of 2020.
In the face of this catastrophe, scientists look likely to pro-
duce a vaccine much faster than almost anyone could have pre-
dicted at the start of the pandemic. Yet global efforts to manufac-
ture and distribute vaccines do not measure up. A mere $10bn orso has been devoted to the cause—the equivalent of ordering one
pizza, rather than the several that are needed.
The figures are murky, but on a rough estimate the world has
bought about 4bn doses of covid-19 vaccines for delivery by the
end of next year, which is in theory enough to give half the planet
one dose. In practice, however, far fewer people will secure pro-
tection from the disease. Some of the vaccines in production will
fail to get regulatory approval, and a potential candidate that
reaches a large-scale clinical trial—as several have—still has a
20% chance of failure. Others will be approved but may not pro-
vide full protection. They may not be suited to the elderly, for in-
stance, or they may stop people dying from covid-19 but not from
passing it to others. Other vaccines will require more than one
dose in order to be effective. Because of these contingencies,
even those countries, such as Britain and America, that have
bought more than two doses for each of their citizens have still
not bought enough.
Instead of seeing unproven vaccines as an extravagance, theA bigger dose
The world is not spending anywhere near enough on a coronavirus vaccineVaccine economics