Lebanon Threatened By Economic Crisis
BEIRUT, Lebanon (AP) _ The end of Lebanon’s civil war 17 months ago brought a large measure of peace, but the nation now faces an economic crisis that has people struggling to feed their families.
A recent plunge in the value of the Lebanese pound has jarred a country already devastated by 15 years of fighting.
Prices of meat, bread and gasoline have increased 50 percent since Feb. 27, and the cost of vegetables, fruit and other essentials have tripled.
An American ship arrived on Monday carrying $18,000 in U.S. food donations, but it will not go far.
″We’re barely able to make ends meet,″ said Wajih Issa, a garbage collector who has a family of seven.
Issa’s monthly salary of 225,000 pounds was worth $255 at the beginning of March. He lost 27 percent of that as the pound fell.
″They say the civil war has ended, but my family and I don’t feel it,″ Issa said.
The war began in 1975. By the time it ended in 1990, Lebanon had a domestic debt of $2.3 billion and a foreign debt of $250 million.
Moreover, Lebanon must import 85 percent of its basic needs. The American shipment of 7,550 tons of rice, wheat, beans, lentils and vegetable oil may help feed 135,000 needy families, but it’s just a fraction of the needed aid.
″The whole country is threatened and we should all work to save it,″ Prime Minister Omar Karami said Monday after meeting with economic experts.
″We shouldn’t forget that we’ve emerged from a bloody war that destroyed all the country’s infrastructure and that we still haven’t received all the promised financial aid,″ he said.
The United States has promised $30 million, and Europe has said it will help. But this will not cover the $25 billion the government says it needs to rebuild roads, bridges and utilities.
″The tragedy of Lebanon today is that its legislation and infrastructure have fallen so far behind that it’s not a viable place for investments except short-term trade operations that don’t contribute to employment, development or a good reputation,″ said Marwan Iskandar, an economist.
Hundreds of telephone lines are down; sometimes it is even impossible to get through to one’s next-door neighbor. Electricity is still rationed to six hours a day.
Streets are littered with garbage, and highways are riddled with large craters.
Until the pound’s recent plunge, Lebanon had been relatively stable for a year. The army, with Syrian help, crushed rebel Gen. Michel Aoun in October 1990, effectively ending the war.
Lebanese abroad came home to look into the possibilities of opening businesses, and foreigners began investing in real estate.
Cash flowed into the country and the exchange reserves of the Central Bank rose, pushing up the exchange value of the pound.
Then came the crash, which appears to be a sign of lingering concerns.
The government still has not established firm control over the entire country, notably the south where Muslim guerrillas clash with Israelis ensconced in their so-called ″security zone″ in southern Lebanon.
But there also are other reasons for lack of confidence.
″Caught in a vicious circle ... the more the state flails about like a drowning man, the deeper it sinks,″ the French language daily L’Orient Le Jour said recently.