‘The government is letting us starve’: Nationwide protests erupt in Lebanon as currency plunges to record low

‘It’s a freefall with no safety net,’ economists warn

Lebanon’s prime minister held an emergency cabinet meeting on Friday as he scrabbled to fix a worsening financial crisis.

The plunging currency has sparked mass rallies where protesters shut down key roads and set fire to banks.

Financial institutions across the country were set ablaze by angry crowds who took to the streets late on Thursday, shouting chants against the government and the economic collapse.

In central Beirut, protesters set fire to tyres and a private bank, smashed shopfronts and pelted police and soldiers, who fired back volleys of tear gas.

Up north in Lebanon’s impoverished city of Tripoli, the Lebanese Red Cross said that 41 were injured in clashes with security forces as infuriated crowds also set fire to a branch of the central bank.

Similar scenes were repeated in the southern city of Nabatiyeh and Akkar in the north, where demonstrators pelted bank branches with rocks, smashing glass exteriors.

“It is ‘we do or die’ right now,” Karim, a Beirut protester, told The Independent as clashes erupted in the centre of the capital at midnight.

“We cannot afford to eat any more, and the government is letting us starve.”

Prime minister Hassan Diab cancelled all scheduled meetings for Friday to hold an emergency session of the cabinet. The governor of the central bank, meanwhile, urged foreign exchange bureaux to stick to the rate he had ordered.

Despite efforts to control the depreciating currency, including a new pricing system introduced last week, the Lebanese lira plunged to more than 7,000 to the dollar on the black market on Thursday, down from 4,000 last week. Officially, the lira remains pegged at 1,500 to the dollar.

The rapidly sinking value of the currency has seen food prices soar with some monitoring groups recording a 100 per cent increase in the cost of basic goods such as sugar since last year.

The Beirut fire brigade extinguishes a smouldering bank after it was set on fire overnight (EPA)

The heavily indebted Lebanese government has been in talks for weeks with the International Monetary Fund after it asked for a financial rescue plan, but there are no signs of an imminent agreement.

Lebanon was already limping through financial crisis and revolution last autumn when the coronavirus pandemic hit the country, worsening the economic situation.

Decades of chronic corruption and mismanagement had shrunk resources in the tiny Mediterranean country, which is also struggling to look after the world’s largest refugee population per capita.

The World Bank initially predicted that more than half the country would sink below the poverty line this year, which means living on a few dollars a day.

But in January a social affairs ministry spokesperson said the rate would reach 70 per cent. The International Crisis Group reported that many public-school students in peripheral areas such as the Beqaa valley were showing signs of malnutrition.

Lebanon is in the grip of its worst economic turmoil in decades (AFP/Getty) (AFP via Getty Images)

The arrival of the coronavirus lockdowns across the world has only piled on further pressure. Lebanon heavily relied on remittances from nationals abroad, which have all but dried up since the virus shuttered business across the world.

The latest crash appeared to reflect the growing shortage of foreign currency on the market amid the crisis.

Lebanese economists said that the collapse of the economy in neighbouring Syria and upcoming new US sanctions due to take effect there in the coming days has also worsened Lebanon’s situation. The two economies are heavily intertwined.

Experts painted a bleak future for the country, saying that the government has pushed through no reforms to try to create a climate of trust to understand the rapidly deteriorating situation.

“The Lebanese currency will continue to sink because nothing has been done to contain the inflation, to contain the pressure on the dollar,” Sami Nader, director of Levant Institute for Strategic Affairs told The Independent.

“The situation is more unstable than ever. It’s a free fall and I’m not seeing any safety net,” he added.