An economy in crisis

    Business Spotlight 12/2022
    A boat sits atop a rubbish pile in a city in Lebanon
    © Jacob Russell
    Von Lea Frehse

    If you need local money in Lebanon, it’s just a WhatsApp call away. As the country’s banking system has collapsed, Lebanon’s economy has gone back to cash-only — and finds make-shift solutionNotlösungmake-shift solutions to keep cash available. At the centre of all this is a group of men on scooter(Tret-)Rollerscooters: Lebanon’s “money guysJungsguys”. They exchange foreign currencyFremdwährungforeign currency, which comes in as remittanceÜberweisungremittances or through trade, into Lebanese pounds, which they deliver to your door. All you need is a money guy’s mobile number. And don’t worry! Any LebaneseLibanese/LibanesinLebanese will be able to share one with you.​

    What has forced this Eastern MediterraneanMittelmeerMediterranean country, once known as “the Switzerland of the Middle East” for its to flourishflorierenflourishing banks, into this situation? Well, one could say it was gamblinghier: Finanzspekulationgambling. For decades, the country’s corrupt elite kept the currency’s value artificially high. This to boost sth.etw. ankurbelnboosted the economy in the short term, but to drain sth.etw. ent- wässern; hier: ruinierendrained local industry and agriculture. It also made it highly likely the economy would crash in the long term. That happened in 2019.​

    Ordinary people pay the price​

    Since then, the Lebanese pound has lost more than 90 per cent of its value (despite what the official exchange rate might be). The money that average Lebanese people had saved in banks is most likely lost forever. For over a year now, regular customers haven’t been allowed to to withdraw sth.etw. abhebenwithdraw more than the equivalent of a few hundred euros a month from the few ATM (automated teller machine)GeldautomatATMs that are left. Meanwhile, inflation for basic goods — including drinking water, bread and electricity — was well over 200 per cent in 2021. Four out of five Lebanese are now living in poverty, while the elites responsible for the crisis benefit from savings abroad. A World Bank report described the crisis in Lebanon as possibly one of the three most severemassiv, schwersevere economic depressions since the 1850s.​

    Four out of five Lebanese are now living in poverty

    Why don’t Lebanese people revolt? Oh, they have! When the crash began, over a million people to take to the streetsauf die Straße gehentook to the streets, nearly a quarter of the population, to demand that the corrupt leaders to step downzurücktretenstep down. The protests were loudest in Tripoli, Lebanon’s northernmost and poorest city. But the clique of corrupt leaders protected each other, and then, the pandemic began. “Our youth are now totally consumed by everyday struggles,” says Mustafa Shamseen, a social worker in Tripoli.​

    It’s now about survival​

    To feed their families, most Lebanese people now to rely on sb.auf jmdn. angewiesen seinrely on relatives who live abroad. The money transfers are usually in euros or US dollars. hencedaherHence, every few days, people make the call to exchange their foreign cash into Lebanese pounds at the current rate. The money guy will usually arrive on a run-downramponiertrun-down scooter, pull out an old plastic bag from under the seat and count out the banknotes right there. Even for a small sum, the bundleBündel; hier: Geld- bündelbundle will likely be thick: Lebanon’s highest-denominatedmit dem höchsten Nennwerthighest-denominated banknote is 100,000 pounds. As the currency continues to lose value, the money guys’ bags just get heavier.​

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