BEIRUT, Lebanon – In normal times, Ziad Hassan, a grocery store manager in Beirut, received a daily email from his chain’s management letting him know what prices needed to be adjusted and by how much.
But when the Lebanese currency collapsed and the economy began to falter, the emails came in three times a day ordering price hikes across the store.
“We have to change everything,” said a disgruntled Mr Hassan, adding that often his staff were not even able to finish one price hike before the next came. “It’s crazy.”
The country’s economic plight worsened last week when the Lebanese pound fell to $ 15,000 on the black market – the lowest level ever – and was deprived of value from people’s salaries as prices of once affordable goods rose out of reach. It has since recovered to around 12,000.
Lebanon has grappled with a web of economic and political crises since late 2019, leading to rampant unemployment, skyrocketing prices, road closures by angry demonstrators and a government with no clear plan to slow the decline. A catastrophic explosion in Beirut’s port in August, killing 190 people and leaving much of the capital in ruins, only exacerbated the misery.
In a country where most products are imported, the currency collapse has left no sector untouched.
According to government statistics, food prices were up 400 percent in December from a year earlier, while prices for clothing and shoes were up 560 percent and hotels and restaurants were up more than 600 percent.
Numerous pharmacies across the country went on strike last Friday to protest the conditions under which they were out of medication and reducing their profits. Professionals such as lawyers, teachers, doctors and university professors have seen the value of their salaries decline. Many others were pushed into poverty.
In August the United Nations said that more than 55 percent of the Lebanese population had become poor, almost twice as many as the previous year. Extreme poverty had tripled to 23 percent. And the situation has worsened since then.
The crisis stems from the collapse of a policy by the Lebanese central bank to peg the Lebanese pound or lira to the dollar at a rate of around 1,500 to 1 since 1997. This enabled people to use the two currencies interchangeably, and made it easy for merchants to sell products in pounds in order to convert their profits into dollars and pay for imports.
However, the state’s ability to maintain the bond stalled in late 2019 when mass protests erupted over decades of political corruption and poor governance. Since then, two governments have resigned and the pound-dollar gap has widened. The calls by officials of the West and the United Nations for reforms that could free up foreign aid and a possible bailout from the International Monetary Fund have gone unnoticed.
For many Lebanese people, the most personal element of the crisis is the grocery store, where products that were once considered a staple food have disappeared and other key items have tripled or quadrupled their price. There was a run with staples like oil, flour, sugar and rice.
“Everything is rising,” said Suheir al-Jizini, 60, after discovering that the price of the jug of cooking oil she bought last week was now two-thirds higher. “I’m really shocked.”
She had come to the store to also buy laundry detergent and pasta, but found that she did not have enough cash. She said her husband was making £ 750,000 a month as a driver. It used to be worth $ 500, now it was less than $ 60.
The World Food Program announced in November that food prices in Lebanon have risen 423 percent since October 2019. This is the biggest jump since surveillance began in 2007. Prices have continued to rise since then, putting the poor under acute pressure.
Faten Haidar, 29, said she was struggling to put meals together for her three children when food prices skyrocketed and her husband’s income from his coffee stall declined. Speaking on the phone from the northern city of Tripoli, she said that she only had labneh – a strained yogurt – in the refrigerator and that she already owed her local business.
“I don’t know how to pay her,” she said.
Other important things also used up her money, like sanitary towels, the price of which has quadrupled. This burden will increase when your 12 year old daughter reaches puberty.
“I can’t afford mine,” she said. “How can I afford hers?”
Soldiers ‘and police officers’ salaries have also fallen in value, adding to concerns that social unrest and crime will rise. This month, Mohammed Fahmy, the interior minister who oversees the security forces, said these salaries had “hit rock bottom”.
“Three months ago I would have said that the security situation was gradually collapsing,” Fahmy told a local news network. “Now I’m saying it collapsed.”
The chief of the Lebanese army, General Joseph Aoun, addressed military leaders earlier this month with a rare public criticism of the leaders of Lebanon’s sect-based political system, warning them that its soldiers also “suffer and starve”.
He spoke to the guides and asked: “Where are we going? What are you going to do? “
Parliament recently approved a US $ 246 million loan from the World Bank to provide cash to poor families. However, no significant effort has been made to stop the further collapse.
The cabinet of outgoing Prime Minister Hassan Diab resigned after the catastrophic explosion in the port of Beirut on August 4th and has yet to be replaced. This has meant that the government has been in a reduced capacity as caretaker longer than in power.
A former prime minister, Saad Hariri, was appointed to form a new government in October. Despite 17 meetings to discuss the political horse trade with President Michel Aoun, he has made little progress. Last Thursday they agreed to meet again on Monday.
48-year-old Jihad Sabat has watched the decline from the window of the Beirut butcher’s shop, which he has been running since 1997. Last year, the price of meat continued to rise, while the number of customers decreased.
A pound of beef now costs more than three times what it would have been before the crisis, he said – more than three times what it would have cost before the crisis. He’s also seen an increase in people who want to buy on credit and are interested in using bones to cook for soup.
“Meat has become a luxury,” he said.
He accused the country’s politicians of stealing the state’s money through corrupt schemes and criticized them for failing to stabilize the economy.
A friend hanging out in the store interjected, “The problem is with the people.” Mr. Sabat nodded.
“That is an essential point,” he said. “If there were elections tomorrow, the same people would be back.”
In the grocery store, the manager Hassan said his branch had sold less meat and more lentils every month, although these are also imported and cost five times more than before the crisis.
Fighting over government-subsidized staple foods such as rice, sugar and cooking oil had broken out in the aisles, he said. And it’s common for customers to get a sticker shock at the checkout when they find they can only afford a few essentials.
“I don’t know how people go on,” he said. “But it will cause an explosion at some point.”
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