Why Lebanon is in the darkness?

International Oct 30, 2021

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A small country in the Middle East — Lebanon, is at the brink of complete darkness, with almost 80 percent of households suffering from complete blackout. Various think tanks have predicted the long-lasting nature of this electricity outage.

However, this situation was not something that hit the residents surprisingly, rather, if we render back into the timeline, it was a very predictable product of the inefficiency in the country. The government and the army are left with neither capital nor enough forex reserves to afford charges for their import. Amidst the political fragmentation and disturbance in the country, they were impacted by the August 4 Beirut blast last year — one of the worst non-nuclear blasts in the history of the world, which pulverized a port and damaged over half of the city in the country which is known for economic mismanagement. This series of events led to the fall of their central grid, which resulted in the “ENERGY CRISIS” today.

In Lebanon, oil imports fulfill the demands of electricity unlike India, which has coal to meet this demand. Coal-based electricity demands a more efficient and sustainable grid system, which Lebanon's policymakers never opted for and went ahead with the former, with oil imported from Syria. However, the recent chain of events that resulted in the shortage in finances, ultimately liquidated this blackout in Lebanon as previously-friendly Syria denied them any more grants.

The World Bank has explicitly stated that “Lebanon's crisis is one of the worst since the 1850s”. The International Monetary Fund (IMF), when asked for financial aid to Lebanon, showed reluctance. The US, on the other hand, also refused to give a bailout but agreed upon some substantial aid if Lebanon’s policymakers are willing to undergo reforms in banking as well as reducing the corruption in their political system. Such is the delicate situation in Lebanon that no one wants to include this economic pattern in their financial system.

Lebanon's crisis is way more critical than it seems to be. US crude oil prices have topped $80 a barrel, the highest since 2014, and any further hike will make an economic recovery for Lebanon harder.

In addition to as little as one or two hours of daily electricity, the incredibly expensive generators, hospitals, and other public utilities including transports are on a halt. Lebanon’s hyperinflation, as well as high unemployment along with the medicinal shortages, are some of the by-products of the crisis that has impacted the lives of citizens.

A transition from the religion-based political system to a value-based system where academics are the priority can be a step in the right direction. The International bodies and countries should provide humanitarian aid for goodwill rather than focusing on national interests.

Lebanon, which was once a heart for banking systems, where wealthy Arabs and Westerners enjoyed their time, where Beirut port once used to manage much of the oil billions, the country which was once considered a prototype for a future Dubai, is at the brink of darkness. The 10th best quality educational country where literacy rate touches almost 94%, is now left with no hope on the horizon.

This article has been written by Shrawan Deogirkar for Paradigm.

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