Lebanon is currently going through food insecurity, shortages of electricity or political unrest. Crippled economically and politically, there is no end to Lebanon’s problems.

Lebanon’s fragmented parliament

For months, Lebanon has been operating without a fully functioning government. In May, general elections were held and the outcome was the lack of a majority for anyone in the parliament. The closest was Hezbollah and its allies who obtained 58 seats, lesser than the 65 necessary to secure a majority. The parliament was in charge of electing a prime minister that could form a new government. In June, Najib Mikati was named caretaker prime minister. However, forming a new government often takes months and has not yet taken place with contacts currently stalled. This crisis is further exacerbated by the fact that the mandate of current president Michel Aoun will terminate in October. It is uncertain if his term will be extended or if there will be new elections before the mandate expires. Regardless in order for these to happen, there is need for a two-thirds majority vote in parliament.

Lebanon’s Economic crisis

With a fragmented parliament and no appointed government, Lebanon is suffering from the worst economic crisis in its history. Since 2019, Lebanon has endured a financial and banking systems breakdown. Its GDP dropped from US$55 billion in 2018 to a projected US$20.5 billion in 2021, while the real GDP per capita fell by 37.1 percent. With the failure of the banking sector, which has ceased both lending and attracting investment, came a massive devaluation of the Lebanese Lira. In May this year, the pound reached an all-time low of more than 35,000 to the dollar, having lost more than 95% of its value since 2019 when it was valued at 1,500. The banking sanctions imposed by the US and targeted sanctions by the EU contributed to exacerbating this financial catastrophe.

The problem worsened with the explosion in the Port of Beirut in 2020, which practically destroyed the silos in the port. The silos were used to store 85% of Lebanon’s cereals. The Port was responsible for 60% of Lebanon’s imports. The war in Ukraine added to the problem further. In 2021, over 80% of Lebanon’s wheat imports came from Ukraine and with the war, a shortage has been occurring. Though there is some hope that a grain shipment may now get through under the Turkish negotiated deal.

Last but not least another contributor to the crisis had been the ongoing COVID-19 pandemic, which also increased oil costs.

Lebanon’s Electricity shortages

One of the problems related to the economic crisis are electricity shortages. Lebanon’s national electricity company (EDL) has been cutting down their energy output due to lack of payment from the government and the high cost of fuel. EDL currently provides less than 10% of the country’s power needs, with Lebanon barely having any electricity per day. Regarding this, a surprising agreement was signed in July between Lebanon, Syria and Egypt in which Egypt will provide natural gas to Lebanon. If this deal ever does go through (it is by no means certain), it could mean an additional four hours of electricity per day to the Lebanese. It is surprising because some of the pipeline that may be used to transfer the gas runs through Israel.

Lebanon’s Food insecurity and poverty

The economic crisis is taking its toll on three-quarters of Lebanon’s population who live in poverty. Compared to last year, there is a rise of 46% in the number of people needing urgent aid (including over two million Lebanese and 1.5 million Syrian refugees). With 22% of the Lebanese population food insecure and with the steep rise in inflation on food and beverages to 332% in June, it is likely that more people will suffer from the crisis. Another issue is water scarcity due to electricity shortages. Equally worrying is the rising oil price and the lack of medicines. With protests ascending and the occurrence of ongoing civil strikes, the situation is dire for the Lebanese population.

In April, a draft economic deal was made with the IMF worth US$ 3 billion, depending on preconditions such as the approval of the 2022 budget. The political instability of Lebanon including the opposition from the banking sector and proposed changes from the prime minister Mikati to the deal led to a gridlock in terms of advancing with the deal. Nonetheless, a vote was approved at the end of July to use a loan of US$150 million to pay for wheat imports, which should secure wheat for 6 months. Accordingly and in spite of the shortage, there was news of Lebanon importing 35,000 tons of wheat in July from Ukraine and Russia.

Lebanon’s Tensions with Israel

Lebanon’s problems also extend outside its country and tensions with Israel have been skyrocketing related to their maritime border dispute. The negotiations on their maritime border started in 2020 and initially Lebanon demanded 860 square kilometres of waters and later asked for an additional 1,430 square kilometres including part of the Karish field. Negotiations were halted in May of last year however; talks were resumed in June, after Israel installed a natural gas platform in Karish. Lebanon’s president Aoun indicated “any action or activity in the disputed area represented a provocation and an aggressive action”. Since then, Israel and Lebanon have been engaging in talks mediated by the US with the objective of defining who has right to claim the offshore gas field and the demarcation of the maritime borders between both countries.

In July, Hezbollah sent unarmed drones for reconnaissance purposes towards the Karish gas field with Hezbollah’s Secretary-General Hassan Nasrallah stating that the movement will “go to war” if gas is extracted by Israel before the issue is resolved. Israel is also taking defensive measures in the disputed area with caretaker Prime Minister Lapid condemning Hezbollah’s actions and replying that Israel has the strength necessary to defend its interests.

Lebanon’s future: What is next?

Israel has plans to start extracting gas from Karish in September and is pushing to secure an agreement. With the current difficulties in securing gas, it is unlikely that Lebanon will give up on the Karish gas field. However Lebanon has many internal problems to solve and there are more questions than answers to provide. The solutions presented by the caretaker prime minister such as the US$150 loan or the gas deal with Syria and Egypt are short-term for long existing problems. With the political instability, chaos looming and the president’s mandate ending, the next months are predicted to be even more difficult for the country and the Lebanese people.