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  • Fadi Amer

Quo Vadis?: An Examination of “Crisis” Through the Microcosm of Contemporary Lebanon


The El-Houssami house amidst the ruins of ancient byblos showing a building in a field by the ocean
Jbeil, Lebanon: The El-Houssami House Amidst the Ruins of Ancient Byblos. Photo credit: Fadi Amer.

In the Epic of Gilgamesh, the King of Uruk journeys to the Cedar Forest, the realm of the gods, to vanquish its Guardian, the demi-god Humbaba, and cut down its blessed trees. The ensuing battle was so fierce that “the ground split open with the heels of their feet, as they whirled around in circles, [and] Mount Hermon and Lebanon split.” Were you to find yourself amidst this quarrel, your only choice would be to patiently await the cataclysm’s passing. Today, another rupture in the same sacred land reveals an altogether different beast: unlike what might otherwise be called a transient “shock,” this “crisis” is the result of systemic contradictions which will persist until we address the root causes—ultimately, the social choicesthat produced it.


The financial and economic crisis in Lebanon has been described by the World Bank as one of the worst in the history of capitalism. In numerical terms, the country’s GDP fell from a high of nearly $55 billion (£43.7 billion) in 2018 to an estimated $23 billion (£18.3 billion) in 2021. The local currency has lost nearly all its value and is still falling precipitously. Living standards have also been crippled by persistent triple-digit year-on-year inflation. Much of the population has been thrown into harrowing poverty as a result: throughout the past year, over half of all households in Lebanon were unable to afford either heating or schooling, while just under half could no longer pay for transportation or medicine. What could have caused such devastation?


Economists commonly teach that a market economy left to its own devices will achieve an equilibrium, as a given set of resources is diverted to its most productive uses and people become as well off as they could be. Any change in the economy thereafter is thought to result from outside the system itself—not necessarily outside in a literal sense, as in the outbreak of war, but outside these given parameters, like the development of a new technology. This is called a “shock.” From this perspective, an economic downturn can either result from the impingement of a force external to an otherwise sound system—the resolution of which ought to restore harmony—or the maloperation of market forces. Let us delve into both possibilities.


To be sure, Lebanon had succumbed to several shocks in the years leading up to and during the initial stages of the current collapse. Along with the rest of the world, the Lebanese economy suffered from the Covid-19 pandemic and soaring prices, particularly those of grains and hydrocarbons. And one need only recall the horrific port blast of 4 August 2020, which rocked the capital, Beirut, when 2,750 tonnes of ammonium nitrate exploded, killing hundreds, wounding thousands, and leaving hundreds of thousands without homes. And yet to see these events as simply “shocks”—in the most dreadfully literal sense in the case of the port blast—misses the more fundamental crisis of governance that allowed them to occur, or magnified their impacts.

"While Lebanon aggressively pursued growth through an economic model built around the banking, construction, and tourism sectors, it totally neglected development; industrial and infrastructural investment were virtually nonexistent."

The mainstream economic model described earlier rightly points out that government and central bank intervention in Lebanon had run dangerously contrary to market forces, trying to swim upstream. In simple terms, the cash the economy needed (in US dollars) to meet its import needs, support the local currency, and satisfy certain debt obligations was no longer forthcoming. Lebanon was not exporting enough goods or attracting enough foreign capital to generate the dollars needed to keep the game running. Eventually the cash ran out, and people’s life savings vanished into thin air. Had the authorities preemptively acted with appropriate monetary and fiscal interventions, the downturn would not have been so severe, but—and here’s the catch—it would have happened all the same.


This is partly to do with the difference between economic growth and economic development. While the former is principally concerned with an increase in the exchange value of goods produced and services rendered—for instance, GDP—the latter underscores the need to improve the capacity of a country to produce—for instance, its manufacturing prowess. While Lebanon aggressively pursued growth through an economic model built around the banking, construction, and tourism sectors, it totally neglected development; industrial and infrastructural investment were virtually nonexistent. This begins to explain why the economy became so unbalanced and so sensitive to external conditions. Essentially, the authorities had spent several decades building a house of cards—and it was only a matter of time before a gust of wind tore it down.


Nevertheless, a purely economic analysis remains insufficient to understand Lebanon’s current crisis. After all, if the country’s woes were simply the consequence of neoliberal economic policy, it would have pursued an international bailout and the ensuing austerity long ago. Instead, nearly four years on, the financial sector has yet to acknowledge its losses, let alone face any recovery and restructuring legislation; the political class cannot agree on a presidential candidate with whom to form a government and begin negotiating with international financial institutions; and the judiciary has been weaponised against the Lebanese people, stopping the investigation into the port blast dead in its tracks and relentlessly going after critics instead. A full account of Lebanon’s collapse, therefore, must explain this deliberate policy of no policy at all.

"The crisis in Lebanon therefore transcends the balance sheet and, parodying the Mesopotamian epic, amounts to an earth-shattering clash between oligarchical sectarian rule and the demands of dignity and prosperity."

In a nutshell, political power in Lebanon continues to be apportioned to religious communities. As these are hierarchically organised themselves, governance structures in Lebanon reflect the interests of sectarian elites, particularly those that undermine the State’s monopoly on violence. Consequently, fundamental and broadly applicable socioeconomic issues are transformed into narrow, vertically organised sectarian disputes that are disarmed in the process. And so long as the elites disagree, nothing is accomplished…leaving the everyday person lacking even a basic guarantee that they will remain safe and sound in the sanctity of their own home. The crisis in Lebanon therefore transcends the balance sheet and, parodying the Mesopotamian epic, amounts to an earth-shattering clash between oligarchical sectarian rule and the demands of dignity and prosperity.


The mythical battle between Gilgamesh and Humbaba tore apart the ground where they stood. By the terms presented in this piece, however, this event constitutes a “shock” that we would be entirely powerless to resist. We are fortunate that many of our present ails are of our own doing, and, therefore, we can ensure they never happen again. Crises, unlike shocks, demand more of us precisely because they are manifestations of structural deficiencies and not simply reactions to evanescent adverse phenomena. This too shall not pass, as it were, unless we get our act together and use every tool at our disposal to diagnose and address the root causes of the catastrophes that plague communities in Lebanon and the world over.

 

Fadi Amer [2021] is a PhD Student at the Centre of Development Studies, researching the relationship between state formation, state capacity, and economic development in Lebanon.

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