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Lebanon’s failed system now threatens food shortage

Can the country be reoriented towards production, wealth redistribution, secularism and social progress? OMAR DEEB explores the political situation

CRISES are piling up in Lebanon. People are satirically wondering what will be the next apocalypse facing the country after all it has witnessed during the past few months.

The inevitable economic collapse had been mounting for several years. 

A rentier economy that lacks production and hunts remittances, bank deposits and loans to survive is not sustainable, as left forces have warned and as bitter reality has now demonstrated. 

After accumulating historically unprecedented levels of debt to GDP, the government defaulted in March 2020. 

The currency has been devalued by almost 300 per cent in the past six months, falling from 1,500 liras to the dollar to about 4,400 liras. 

With an economy importing most basic necessities, this translated into a huge inflation in prices and cut the purchasing power of the local wages by half. 

The country has long been in political stagnation. Sectarian politics have led to a corrupt clientelism where any job, public service or welfare entitlement is dependent on local sectarian leaders who distribute them through pipelines that buy loyalty in return.  

However, even before the current crisis, a growing fraction of the Lebanese people was turning against this sectarian system. 

In the past few years, protests organised by left, democratic and social organisations as well as by trade unions were attracting more and more people.  

In 2018 and 2019, left and secular forces organised a national campaign under the slogan of “Together we rescue our country through political change,” which mobilised tens of thousands of people. 

In October 2019, the largest popular uprising in the history of Lebanon flooded the streets of all major towns and cities. 

About a third of Lebanon’s four million people actively took part in protests denouncing sectarianism and taxes on the working class. 

They called for a radical political change: a secular system combined with new economic policies that would redistribute income and force the richest 1 per cent to pay for the economic collapse. 

The uprising suffered several attacks from pro-governmental groups and paramilitary forces linked to the sectarian parties. Yet it persisted in massive mobilisations until the beginning of 2020.

Only the spread of coronavirus saved the government and halted the popular uprising. 

The new government formed in February sealed an alliance with the infection. 

People were forced to stay at their homes and the social distancing and mitigation measures provided an opportunity for the ruling forces to reorganise and take the initiative. 

The current government, led by the new Prime Minister Hassan Diab, issued a long list of promises and actually claimed it would meet the material demands of the popular uprising. 

Its first statement called for economic reforms that would force the central and the private banks to pay their share of the crisis.

Yet no concrete actions were taken. After the spread of the coronavirus, the left called on the government to provide an immediate relief package for workers and the unemployed and to ensure universal health coverage for all with a proposed budget of $1.2 billion, equivalent to 1.6 per cent of the GDP. 

The governmental response was minimal: a small assistance programme totalling $50 million or 0.1 per cent of GDP. 

Even this micro-amount was delivered through the usual channels of corruption and clientelism.

As a result of the economic shutdown, the working classes and large sections of the middle class face immediate poverty. 

Devaluation makes food and basic necessities increasingly unaffordable — with recent studies classifying about half of the population as below the poverty line. 

Worse, foreign reserves are only enough to cover a few months of imports and face the country with actual food shortages. 

The government has failed to deliver on any of its promises and is now seeking more loans from the International Monetary Fund (IMF) as its only way of generating foreign reserves. 

Needless to say, the IMF is imposing a list of demands that include the privatisation of the public-sector companies (electricity, telecoms, water), cancelling government subsidies for essential goods (wheat, medicine), “reforming” the pension schemes by lowering pensions and cutting the public sector. 

In addition the US State Department has announced its own political conditions for support on the IMF board.  

These require Lebanon to apply US sanctions against Syria by sealing the frontier and realigning Lebanon’s southern borders in a way that will widen Israel’s maritime claims over offshore gas. 

These economic and political conditions require a complete surrender to the interests of big capital and the geopolitical interests of Israel and imperialist forces led by the US. 

This is economic and political suicide for the working and low-income classes in Lebanon as well as for the sovereignty of the country.   

Our government learned nothing from the IMF’s neoliberal prescriptions for Latin America and more recently Egypt and Greece.

The Lebanese Communist Party has proposed an alternative plan. It opposes privatising public-sector institutions.  

A public sector based the collective good provides services far more cheaply if it does not have to generate private profits. 

Instead Lebanese communists call for new and increased taxes on income and wealth, on financial services companies, bank deposits, individuals with net wealth above $500,000, wealth inheritance, profits generated from real estate services and the cancelling of tax exemptions for holding companies.

They argue that this gives the public sector a tool, independent of the markets, to transfer part of the capitalist surplus towards rebuilding the infrastructure of electricity, roads, water and communications in addition to preserving the natural environment and to support productive sectors.

“Exploiting” the rentier sectors in order to infuse the current economic system with “socialist elements” is the only possible way of building and sustaining a dynamic, productive, and modern economic model that can serve the interests of the majority of the Lebanese people.

The upcoming months will be decisive for the country and determine its future. 

The government can use the threat of extreme poverty to take the Lebanese people hostage in the interests of capital. 

Alternatively the people can fight back for a new salvation government to enforce deep reforms which work in the interests of the working people and those on low incomes and reorientate the country towards production, wealth redistribution, secularism and social progress. 

Omar Deeb is head of international relations of the Lebanese Communist Party.


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