Lifeless Lebanon lurches into new turmoil amid worsening economic crises

Olivier De Schutter, UN special rapporteur on extreme poverty and human rights gestures during an interview with Reuters, in Beirut on Thursday. (Reuters)
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Updated 12 November 2021
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Lifeless Lebanon lurches into new turmoil amid worsening economic crises

  • ‘Destruction of Lebanese pound has devastated lives and impoverished millions,’ says UN poverty rapporteur
  • Lebanon could ‘suffocate’ amid mix of Gulf political disaster and economic catastrophe, economist tells Arab News

BEIRUT: Lebanon continued its freefall into economic turmoil on Friday, with the medical, fuel, and food crises worsening and no political initiative being taken to overcome the deteriorating situation.

The value of the Lebanese pound dropped to record lows, trading at 23,000 Lebanese pounds to the dollar on the black market.

This crash was at least partly due to a speech given by Hezbollah Secretary-General Hassan Nasrallah on Thursday evening, in which he reaffirmed his hostile positions toward Saudi Arabia and called on the Lebanese to have “patience,” offering no solutions to their mounting problems.

Fuel prices suddenly shot up on Friday. The price of a 20-liter gasoline canister ranged between 310,800 and 319,600 Lebanese pounds, the price of a diesel canister reached 311,000 pounds, and gas cylinders were selling for 266,000 pounds.

The average price of fuel is now equivalent to half of the minimum wage.

Gas station owners reported an approximately 50 percent “decline in the sale of fuel.”

Meanwhile, Economy Minister Amin Salam on Thursday decided to reduce the weight of a bundle of bread while maintaining its current price, which is the highest it has ever reached.

A 1,050-gram bundle is now sold for 9,500 Lebanese pounds.

The Ministry of Economy attributed this to “the high prices of flour, diesel and other materials.”

Olivier de Schutter, the UN special rapporteur on extreme poverty and human rights, issued a statement following a 12-day mission to study poverty in Lebanon, a copy of which Arab News obtained from the UN office in Beirut.

“The Lebanese authorities’ destruction of the national currency, political deadlock, and reinforcement of long-standing inequalities have plunged the country into abject poverty,” he said in the report.

“Lebanon is not a failed state yet, but it is a failing state, with a government failing its population,” he added.

“The destruction of the Lebanese pound has devastated lives and impoverished millions.”

De Schutter described the crisis in Lebanon as “manufactured.”

He added: “While the population is trying to survive day-to-day, the government wastes precious time evading accountability and scapegoating refugees from the comfort of their offices.

“This outrageous level of inequality is furthered by a tax system that rewards the banking sector, encourages tax evasion and concentrates wealth in the hands of the few. In the meantime, the population is subject to regressive taxes that hit the poorest most.

“This is a human-made disaster that was long in the making.”

De Schutter expressed his concern that the “political leadership seems unwilling to see the relationship between tax reform and poverty alleviation and underestimates the benefits of social protection systems for rebuilding the economy, especially in times of crisis.

“Unfortunately, I heard no credible poverty alleviation plan from the government that does not rely on international donors and non-governmental organizations. Dependence on international aid is not sustainable and in fact it weakens state institutions.”

The UN expert added: “The question is what political leaders spent the resources on.

“For decades, Lebanon ignored the need for social policies, including strong welfare programmes and public service infrastructure, and instead focused on unproductive sectors like banking, continuously expanding public debt and devoting those resources to debt servicing.”

He added: “Lebanon has an opportunity to rethink its economic model. Continuing to incentivize a failed model based on rentierism, inequality, and sectarianism will only sink the population further into destitution.”

He warned that the international community would not take Lebanese reforms seriously “until a credible plan is proposed for how to transform the economy, address inequality, ensure tax justice, and prevent further political stalemates,” warning that the donor community was running out of patience with the Lebanese government.

“After losing $240 million to the scam of arbitrary and unfavorable exchange rates, they need to see that the government is serious about transparency and accountability, and a rights-based approach can guide the government’s efforts in this process.”

De Schutter told Reuters: “Lebanon’s officials are living in fantasy land. This does not bode well for the country’s future.”

Prime Minister Najib Mikati’s government, formed in September, is yet to convene amid an ongoing political dispute.

Meanwhile, the reserve in hard currencies at the Central Bank is shrinking to such an extent that it is no longer possible to support medicines for chronic diseases. This decline in economic capacity comes after the Central Bank lifted support for regular medicines.

The crisis has now affected patients suffering from severe and chronic diseases, especially cancer patients, who lack access to life-saving medicines.

Economist Dr. Louis Hobeika told Arab News: “The state’s revenues have vanished. The customs dollar, which is still priced according to the official exchange rate, is no longer logical, and it must be gradually raised, not immediately raised to the exchange rate on the Central Bank’s official platform.”

He added: “Politicians knew that we were on the verge of such a crisis three years ago, but they did not do anything and waited for solutions from abroad, and this did not happen.”

The economist added: “The reserves dried up, and the Central Bank says that it has only $13 billion, but it could be less.”

Hobeika said that the Ministry of Economy’s issuance of a new price for fuel coming just two days after another price was issued — which included an increase of 2,000 Lebanese pounds — indicates the extent of the crisis.

After meeting with Parliament Speaker Nabih Berri, Information Minister George Kordahi reiterated on Friday that he does not intend to resign from the government “without guarantees” — a position that Hobeika believes will “worsen Lebanon’s economic crisis after its political crisis with the Gulf.”

Hobeika added: “We have not yet seen the results of the economic boycott of Lebanon. We now fear for the fate of the Lebanese working in the Gulf, but what if the crisis affects transfers to universities, charities and civil society organizations? What if Gulf Air traffic stops? Won’t Lebanon suffocate? Patience will not do any good then.”

Despite growing pressures, it appears unlikely that the Lebanese will take to the streets to renew their protests. This popular reluctance to express anger “is way more than mere frustration, it is a loss of purpose,” Hobeika said. 

“Citizens are stuck in a hellish, vicious cycle.”


Israel to UN: Palestinian relief agency UNRWA must leave Jerusalem by Jan. 30

Updated 4 sec ago
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Israel to UN: Palestinian relief agency UNRWA must leave Jerusalem by Jan. 30

A law banning UNRWA’s contact with Israeli authorities takes effect on Jan. 30

JERUSALEM: The UN Palestinian relief agency UNRWA must “cease its operations in Jerusalem, and evacuate all premises in which it operates in the city” by Jan. 30, Israel’s UN envoy told UN Secretary-General Antonio Guterres in a letter on Friday.
A law banning UNRWA’s operation on Israeli land and contact with Israeli authorities takes effect on Jan. 30. Israel annexed East Jerusalem in a move not recognized abroad.

Hamas buries 2 leaders slain in Israel strike in Gaza months ago

Updated 48 min 24 sec ago
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Hamas buries 2 leaders slain in Israel strike in Gaza months ago

  • Hundreds of people attended the funerals of Rauhi Mushtaha and Sami Mohammad Odeh during Friday prayers
  • The bodies, draped in the green flag of Hamas, were carried on stretchers from the mosque

GAZA CITY: Two senior Hamas members, whom Israel said it had killed months ago, were buried in Gaza on Friday after their remains were discovered under rubble during the truce, AFP journalists reported.
Hundreds of people attended the funerals of Rauhi Mushtaha and Sami Mohammad Odeh during Friday prayers in the courtyard of the Omari mosque, a historic landmark in the heart of Gaza City that has been heavily damaged by Israeli bombing.
The bodies, draped in the green flag of Hamas, were carried on stretchers from the mosque to their burial site, accompanied by around 16 masked members of the Ezzedine Al-Qassam Brigades, the armed wing of the Palestinian Islamist group.
The Israeli army announced in early October that it had “eliminated” Mushtaha and Odeh along with another Hamas leader “about three months earlier” during an air strike in the Gaza Strip.
Mushtaha, designated an “international terrorist” by the United States in 2015, was a member of Hamas’s political bureau in Gaza, responsible for finances.
Odeh was the head of Hamas’s internal security agency.
Hamas officially acknowledged their deaths in a statement on Sunday, saying that they had fallen as “martyrs.”


ADNOC shipping rules out quick return to Red Sea, CEO says

Updated 24 January 2025
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ADNOC shipping rules out quick return to Red Sea, CEO says

  • Danish shipping company Maersk said on Friday it would continue to reroute around Africa via the Cape of Good Hope until safe passage through the Red Sea and Gulf of Aden area was ensured for the longer term

DUBAI: Red Sea shipping remains risky despite the Gaza ceasefire and an announcement by Houthis to limit attacks, according to the CEO of Abu Dhabi National Oil Company’s logistics and shipping arm.
Shipping executives remain cautious about a return to the Red Sea, given the risk to seafarers, cargo, and their assets.
Houthis have carried out more than 100 attacks on ships since November 2023, resulting in most shipping companies diverting vessels away from the Suez Canal to use the longer route around southern Africa instead.
“As we speak today, we cannot say it’s almost completely gone, and it’s a go-ahead for all the fleet to go inside the Red Sea. As I said, there is a people side to it, so we cannot risk our people going there while there may be a fragile ceasefire now,” said ADNOC Logistics & Services CEO Abdulkareem Al-Masabi.
Danish shipping company Maersk said on Friday it would continue to reroute around Africa via the Cape of Good Hope until safe passage through the Red Sea and Gulf of Aden area was ensured for the longer term.
The Houthis will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
However, they have conditioned their halt in attacks on US or UK-linked shipping with various provisos, which has added to caution on any return, shipping and insurance sources say.
The Houthis on Wednesday freed the crew of the Galaxy Leader, a vessel that the militia seized more than a year ago.
In another development, the UN has suspended all travel into areas held by Houthis after the militia detained more of their staff.
The Houthis have already detained UN staffers, as well as individuals associated with the once-open US Embassy in Sanaa and aid groups.
“Yesterday, the de facto authorities in Sanaa detained additional UN personnel working in areas under their control,” the UN statement read.
“To ensure the security and safety of all its staff, the United Nations has suspended all official movements into and within areas under the de facto authorities’ control.”
Before Friday, the UN had a total of 16 Yemeni staff in Houthi detention.
Staffers were trying to get a headcount across the UN agencies working in the country and had halted their work, which provides food, medicine, and other aid to the impoverished nation.
In June, the UN acknowledged the Houthis detained 11 Yemeni employees under unclear circumstances as the militia increasingly cracked down on areas under their control.
Several dozen others from aid agencies and other organizations are also held.
The UN added that it was “actively engaging with senior representatives” of the Houthis.

 


Sudan army breaks paramilitary siege on key base: military source

Updated 24 January 2025
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Sudan army breaks paramilitary siege on key base: military source

  • “Our forces were able to lift the siege on the Signal Corps,” the source in the Sudanese army told AFP
  • “This victory opens the way to link our forces in Bahri (Khartoum North) with our forces in the General Command“

PORT SUDAN: The Sudanese army broke a paramilitary siege on one of its key Khartoum-area bases on Friday, paving the way to also freeing the besieged military headquarters, a military source said.
The paramilitary Rapid Support Forces (RSF) had since the outbreak of the war with Sudan’s army in April 2023 encircled both the Signal Corps in Khartoum North and the General Command of the Armed Forces, its headquarters just south across the Blue Nile river.
“Our forces were able to lift the siege on the Signal Corps,” the source in the Sudanese army told AFP.
With a months-long communications blackout in place, AFP was not able to independently verify the situation on the ground.
The RSF could not be immediately reached for comment.
“This victory opens the way to link our forces in Bahri (Khartoum North) with our forces in the General Command,” the military source said, requesting anonymity because he was not authorized to speak to the media.
A military source had previously told AFP the army was advancing closer to Khartoum North following days of military operations aimed at dislodging the RSF from fortified positions in the city.
This comes around two weeks after the army reclaimed the Al-Jazira state capital Wad Madani, just south of Khartoum, securing a key crossroads between the capital and surrounding states.
The army and the RSF had seemed to be in a stalemate since the military nearly a year ago seized control of Omdurman — Khartoum’s twin city on the west bank of the Nile.
RSF has controlled Khartoum North on the east bank.
They have regularly exchanged artillery fire across the river, with civilians reporting bombs and shrapnel often hitting homes.
The military source said Friday’s advance “will secure Omdurman from the artillery shelling launched from Bahri.”
Seizing the General Command would signal a major shift for the army, securing its positions in all three districts of the capital.
Since the early days of the war, when the RSF quickly spread through the streets of Khartoum, the military has had to supply its forces inside the headquarters via airdrops.
Army chief Abdel Fattah Al-Burhan was himself trapped inside for four months, before emerging in August 2023.
Khartoum and its surrounding state have been torn apart by the war, with 26,000 people killed between April 2023 and June 2024, according to a report by The London School of Hygiene & Tropical Medicine.
Entire neighborhoods have been emptied out and taken over by fighters as at least 3.6 million people fled the capital, according to United Nations figures.
Across the northeast African country, the war has claimed tens of thousands of lives and uprooted more than 12 million people in what the United Nations calls the world’s largest internal displacement crisis.
Famine has been declared in parts of Sudan but the risk is spreading for millions more people, a UN-backed assessment said last month.
Before leaving office on Monday, the administration of United States president Joe Biden sanctioned Sudanese army chief Abdel Fattah Al-Burhan, accusing the army of attacking schools, markets and hospitals and using food deprivation as a weapon of war.
That designation came about one week after Washington sanctioned RSF leader Mohammad Hamdan Dagalo and said his forces had “committed genocide.”


Israeli refusal to fully withdraw from Lebanon sparks regional concerns

Updated 24 January 2025
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Israeli refusal to fully withdraw from Lebanon sparks regional concerns

  • President Aoun holds talks with US, French officials to urge Israel to meet ceasefire deal criteria
  • GCC, Kuwaiti officials hold talks with Lebanese counterparts

BEIRUT: Israeli Prime Minister Benjamin Netanyahu announced on Thursday Israeli troops would not withdraw from the border area of southern Lebanon in accordance with the time frame set in the ceasefire agreement with Hezbollah, amid claims that the Lebanese Army has not fulfilled its obligations.
Lebanon’s President Joseph Aoun held talks with France and the US to urge Israel to fully implement the agreement and withdraw within the stipulated timeframe to prevent the situation from deteriorating.
Caretaker Prime Minister Najib Mikati also called on the US to “intervene to ensure the implementation of Resolution 1701 and Israel’s withdrawal.”
On Friday, Netanyahu’s office said that “the gradual withdrawal from Lebanon will continue in full coordination with the US administration.”
However, the Israeli Cabinet decided that “the Israeli Army will remain in its current positions,” warning that “the Israeli Army is prepared for any scenario and will respond harshly and immediately to any violations by Hezbollah.”
Israeli media reports said “Israel is requesting an additional one-month delay in the withdrawal of its army from Lebanon and an extension of the ceasefire agreement.”
The Israeli Broadcasting Corporation said that “the political leadership has instructed the army to remain in the eastern sector of Lebanon,” noting that “the additional period before the complete withdrawal from southern Lebanon may range from days to weeks.”
The development accompanied continued Israeli operations in the border region, particularly in the eastern sector.
Army spokesperson Avichay Adraee claimed Israeli forces “uncovered several underground tunnel routes belonging to Hezbollah in Wadi Saluki, intended for the party’s members to take shelter,” asserting that “these routes have been destroyed.”
Adraee spoke about “the discovery of a stockpile of weapons inside a mosque, as well as a vehicle loaded with weapons, and hundreds of mortar shells, improvised explosive devices, rocket-propelled grenades, rifles and other military equipment.”
He said: “In another operation by the Golani Brigade, trucks loaded with heavy rocket launchers were found, along with weapons depots that contained large quantities of rocket shells, mortars shells, shoulder-launched rockets, improvised explosive devices and military equipment.”
Calls intensified from border area residents following Israel’s announcement to gather on Sunday and demand to be allowed to return to their villages.
On Thursday, Parliament Speaker Nabih Berri was informed by US Gen. Jasper Jeffers, head of the international committee monitoring the implementation of the ceasefire agreement, of “Israel’s intention to extend the presence of its forces in several locations in southern Lebanon,” according to information distributed about the meeting. Berri told the general “that people will head to their villages on Sunday.”
In a statement, Hezbollah said that “Israel’s failure to adhere to the 60-day deadline is an attack on sovereignty that requires the state to act and address it, using all international means and conventions to reclaim Lebanese territories and liberate them from the grip of occupation.”
At the political level, Lebanon received further Gulf support for its new leadership.
Kuwaiti Foreign Minister Abdullah Ali Al-Yahya and the Gulf Cooperation Council’s Secretary-General Jasem Mohamed Albudaiwi, along with a delegation from the Kuwaiti Foreign Ministry and the GCC, held meetings with Lebanese leaders in Beirut on Friday.
This visit, along with the visit of Saudi Foreign Minister Prince Faisal bin Farhan less than 24 hours earlier to Beirut, where he met with Lebanese officials and emphasized the importance of implementing Resolution 1701, carry exceptional importance in light of the developments in Lebanon and the wider region.
During his meeting with Aoun, Al-Yahya reaffirmed Kuwait’s “support, endorsement and commitment to standing by Lebanon to provide all necessary aid in all fields.”
He stressed “activating the Lebanese-Kuwaiti joint committees to address the issues raised according to Lebanon’s needs” was of the utmost importance, recalling that Lebanon “was the first country to condemn the Iraqi invasion of Kuwait through the stance of late Prime Minister Salim Al-Hoss.”
Albudaiwi conveyed the GCC’s “unwavering support for Lebanon and its sovereignty,” emphasizing its commitment to “the non-interference in Lebanon’s internal affairs.”
He affirmed that “the GCC is moving toward helping Lebanon in terms of economic development projects after implementing the intended reforms,” noting that “a Gulf program for Lebanon is set to be developed in cooperation with the future Lebanese government.”
Aoun said he hoped “for Kuwaitis in particular and the Gulf people in general to come back and visit Lebanon,” stressing that “the Arab countries’ unity is the cornerstone for confronting current challenges.”
The president affirmed that “after forming the government, we will establish new foundations for cooperation with the Gulf countries,” adding that “the main titles of these new foundations were included in the inauguration speech, which set the rules for building the state.”
Both Gulf officials met with Prime Minister-designate Nawaf Salam, who affirmed “the importance of working to confront the internal challenges faced by Lebanon during this period.”
Salam stressed “the significance of restoring Lebanese-Gulf relations, which he sees as a priority in the near future.”
The Gulf officials also met with caretaker Mikati and Berri.
The Kuwaiti minister and the GCC secretary-general held a joint press conference with Lebanese Foreign Minister Abdallah Bou Habibi following a meeting.
Al-Yahya said: “We reaffirm our solidarity with Lebanon, and our firm commitment to supporting its sovereignty and territorial unity, as well as the importance of implementing the UN Security Council resolutions, including Resolution 1701, and the Taif Agreement.
“We look forward to building the best relations with Lebanon and strengthening security and stability in the region,” he added.
Al-Yahya affirmed that “the GCC had called for the full adherence to the ceasefire agreement and the cessation of Israeli hostilities against Lebanon and the UN peacekeeping forces,” pointing out “the importance of the role played by the army and the security forces to achieve security in the country.”
He said: “We encourage the implementation of the intended reforms. There’s a historical chance to overcome the past challenges and start the reconstruction and development process in a way that achieves the Lebanese people’s prosperity aspirations.”
Al-Budaiwi stated: “We are very pleased with what we heard from the Lebanese leadership and its keenness to achieve the needed reforms and the internationally-recommended programs to ensure the country’s stability.
“These reforms constitute the right path toward Lebanon’s recovery. We believe in the necessity to implement these mandatory reforms and the security council’s resolutions, namely Resolution 1701, and the Taif Agreement.”
He reiterated the final communique of the ministerial committee’s extraordinary meeting in regard to supporting the five-nation group on Lebanon.