One of the top 3 worst economic crises of the last 200 years, the 3rd largest non-nuclear explosion in history, a worldwide pandemic. One could say that the Lebanese suffered one of the worst humanitarian disasters in history.
Most countries in the world rarely see more then 3 months of negotiations for coalition governments to be formed. And yet, despite the current conditions, it took the cartel over a year to be able to form any kind of government.
There is nothing worth elaborating about regarding the new cabinet. Many people think there might be some sort of gradual adaptation to a new reality, that not much will change politically, and that people will just get used to new lows.
Most countries that face balance of payments crises know the protocol to get out of it. Cut fiscal expenses, tighten the money supply, stimulate exports and reduce imports. These crises usually require collective sacrifice, distribution of losses, but down the line, countries can see the light at the end of the tunnel.
In Lebanon’s case, the recovery is not just about tightening spending, adjusting labor costs, local production and bearing losses. There are also large political, infrastructure, institutional, constitutional, cultural challenges. The political battle requires firstly the confrontation of the mafias’ influence. Without electricity or internet, there is no hope for recovery. The state lacks institutional strength. It lacks the constitutional structure to manage reforms. The population’s cultural instincts are currently misaligned with proper reforms.
At the same time, the economy is small and holds potential, if reforms are enacted. A small $10bn injection in infrastructure could create over 800,000 jobs and act as a catalyst for a new growth cycle.
The cartel has proven its complete impotence at stopping the crisis. There are only two paths ahead: the fall of the cartel, or the fall of our society.
Don’t expect much from this government, other then maybe adding a few more hours of electricity per day or organizing the distribution of rationing cards.
The impediment to action advances action. What stands in the way becomes the way.