By Shafiqa Rehayee | Staff Writer
The LBP has been subjected to a multiple exchange rate system, plunging the Lebanese population into national outrage and poverty.
More than three years have passed since the Lebanese currency began to drastically decline. On the eve of the uprisings in October 2019, the official exchange rate was 1507 LBP to $1. On the so-called “black market,” where the full scope of supply and demand is unevenly mirrored, the rate of exchange for one dollar increased to 30,000 LBP at the beginning of 2022. The market value of the Lebanese pound was further eroded in 2023, losing 97 percent of its value, while food prices have increased more than tenfold since May 2019. Currently, as of January 2023, the rate of LBP is in a constant state of change between 50,000 and 63,000 LBP, hitting a record low against the US dollar.
The sky-high rate of the dollar has pushed three-quarters of the citizens into severe poverty, earning the title of the world’s worst economic crisis in the 21st century. The bottom line is that this liquidity crisis has created a barrier for people with Lebanese bank accounts, as they are not allowed to withdraw their cash directly and are forced to withdraw their savings in LBP at a very low rate.
After having their back to the wall, some depositors resorted to extreme measures such as deciding to break into banks in order to withdraw their savings. In a video recording that leaked in mid-2022, one of the dispositors breaks in and shouts “Count the money, before one of you dies,” while holding a gun to the stuff in the bank. The depositor claims that he had to sell his kidney to cover his son’s college expenses and rent after the bank put up barriers to prevent him from withdrawing money. Lebanon’s cash-strapped banks have imposed informal limits on cash withdrawals. The break-ins reflect growing public anger toward the banks and the authorities, who have struggled to reform the country’s corrupt and battered economy.
The Lebanese authorities’ inadequate measurements push the country to the brink of failure, putting it on the verge of being labeled a failed state. Olivier De Schutter, the UN Special Rapporteur on Poverty and Human Rights Violations, says that the international community will not take its reforms seriously unless a viable strategy is put forth by the Lebanese political elites for how to transform the economy, address inequality, assure tax integrity, and stop further political deadlocks.
The government and the banking sector must sort this crisis out by making all income, stock ownership, and financial market participants available to the public and allocating funds to effective accountability measures. The foreign community won’t believe the government’s promises of transformation unless there is significant action.
It has become tiresome to see a consistent stream of crisis after crisis. Yet, the only way to see the light at the end of the tunnel is to never stop talking about it and to continue to fight for basic human rights against political elites who have failed us on every level. We must remain strong while facing all the uncertainties that threaten us on a daily basis.