The collapse of the Central Bank of Lebanon following a major state scam plunged the country into an unparalleled economic and financial crisis. The country is now paying for its 76 years of political dependence and 8 years of complete political vacancy. The reality of its situation is very different from the perception of its citizens.
The three presidents. In the centre is General Michel Aoun, Christian President of the Republic, on the left the Shiite Speaker of Parliament Nabih Berri, on the right the Sunni President of the Interim Government Saad Hariri. Lebanon is not a democracy based on a balance of power between the Executive, the Legislative and the Judiciary, but a confessional system based on 17 religious communities. The extreme complexity of this system ensures the sustainability of warlords and foreign influence. Thus Michel Aoun was the main Christian leader during the civil war, Nabih Berri that of Amal, and Saad Hariri succeeded his father Rafik Hariri who ruled Lebanon exlusively in the name of Saudi Arabia and France after the civil war.
The Central Bank of Lebanon has again authorized private banks to freely deliver Lebanese pounds, but still no dollars.
This exchange control is illegal in law because it has not been validated by Parliament. Several large companies have already filed an application for interim relief before the courts. The wheat, oil and medicine import sectors are out of business, all the others are in recession.
Public debt stands at 154% of GDP. The Lebanese pound was depreciated by half its value in three months, taking the Syrian pound, already mistreated during the war by the Saudi and Qatari counterfeit currency, into its fall.
Causes of the crisis
This financial crisis led Parliament to adopt a new tax that triggered the demonstrations that have paralysed the country since October 17, 2019. In all likelihood, it originated in a massive scam set up by the country’s political leaders through the Central Bank.
A historical reminder is necessary here:
In fact, Lebanon has never been an independent state since its creation during the Second World War (1943). France set up a confessional system there that allowed it to preserve its influence after decolonization by depriving the Lebanese of any national political life.