How Bad Is Lebanon’s Economic Meltdown?

Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)
Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)
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How Bad Is Lebanon’s Economic Meltdown?

Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)
Men fill a private generator, which provide electricity with diesel oil in Beirut, Lebanon January 21, 2022. (Reuters)

Lebanon is suffering an economic meltdown that began in 2019 when the financial system collapsed under colossal state debts and the unsustainable way they were funded, while politicians have yet to come up with a rescue plan.

Just how bad is the situation?

- Gross domestic product has plunged to an estimated $20.5 billion in 2021 from about $55 billion in 2018, the kind of contraction usually associated with wars, the World Bank says, ranking the collapse as one of the worst globally since the mid-19th century.

- The Lebanese pound has lost more than 90% of its value, driving up the cost of almost everything in a country reliant on imports, and demolishing purchasing power. A soldier's monthly wage, once the equivalent of $900, is now worth about $50.

- Poverty rates are sky-rocketing in the population of about 6.5 million, with around 80% of people classed as poor, the UN agency ESCWA says. The situation is worsening. In September, more than half of families had at least one child who skipped a meal, UNICEF has said, compared with just over a third in April.

- The financial system has suffered eye-watering losses, including about $44 billion at the central bank related to failed efforts to prop up the currency, according to 2020 government figures, a level that is roughly twice the size of economic output. Overall losses, including anticipated sovereign debt write-downs, are even bigger.

- Lebanon's banks are paralyzed. Savers have been frozen out of US dollar accounts. Withdrawals in local currency apply exchange rates that erase up to 80% of the value. During an October visit to Beirut, US official Victoria Nuland said the Lebanese people deserved to know where their money had gone.

- Reliant on imported fuel, Lebanon is facing an energy crunch. Even before the crisis, power supplies were in short supply, including in the capital. Now households are lucky to receive more than an hour or so a day. Fuel prices have soared. A ride in a shared taxi, a popular form of transport, cost 2,000 pounds before the crisis but now costs about 30,000 pounds.

- Lebanese are emigrating in the most significant exodus since the 1975-90 civil war. Believing their savings are lost, many Lebanese have no plans to return this time as they start over again.

- Among those leaving are doctors. The World Health Organization has said most hospitals are operating at 50% capacity with around 40% of doctors, mostly specialists, permanently emigrating or working part-time abroad.

- Officials and the media talk of Lebanon becoming a "failed state". Michel Aoun, the president, warned in December that the state was "falling apart". Lebanon's top Sunni cleric said after unrest over fuel shortages in August that the country risked complete collapse unless there was action.



Israeli Raids Displaced Tens of Thousands in the West Bank. Now Few Places to Shelter Remain 

Boys sit by during the funeral of 18-year-old Palestinian Malik Hattab who was killed the previous day after succumbing to injuries sustained during an Israeli raid on the Jalazun camp for Palestinian refugees north of Ramallah in the occupied West Bank, at the camp on April 15, 2025. (AFP) 
Boys sit by during the funeral of 18-year-old Palestinian Malik Hattab who was killed the previous day after succumbing to injuries sustained during an Israeli raid on the Jalazun camp for Palestinian refugees north of Ramallah in the occupied West Bank, at the camp on April 15, 2025. (AFP) 
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Israeli Raids Displaced Tens of Thousands in the West Bank. Now Few Places to Shelter Remain 

Boys sit by during the funeral of 18-year-old Palestinian Malik Hattab who was killed the previous day after succumbing to injuries sustained during an Israeli raid on the Jalazun camp for Palestinian refugees north of Ramallah in the occupied West Bank, at the camp on April 15, 2025. (AFP) 
Boys sit by during the funeral of 18-year-old Palestinian Malik Hattab who was killed the previous day after succumbing to injuries sustained during an Israeli raid on the Jalazun camp for Palestinian refugees north of Ramallah in the occupied West Bank, at the camp on April 15, 2025. (AFP) 

For weeks, the family had been on the move. Israeli troops had forced them from home during a military operation that has displaced tens of thousands of Palestinians across the occupied West Bank. After finding shelter in a wedding hall, they were told to leave again.

"We don’t know where we’ll go," said the family's 52-year-old matriarch, who did not want to be identified for fear of reprisal. She buried her face in her hands.

The grandmother is one of more than 1,500 displaced people in and around the northern city of Tulkarem who are being pushed from schools, youth centers and other venues because the people who run them need them back. It was not clear how many displaced in other areas like Jenin face the same pressure.

Many say they have nowhere else to go. Israeli forces destroyed some homes.

The cash-strapped Palestinian Authority, which administers parts of the West Bank, has little to offer. The UN agency for Palestinian refugees, the largest aid provider in the occupied territories, struggles to meet greater needs in the Gaza Strip while facing Israeli restrictions on its operations.

Approximately 40,000 Palestinians were driven from their homes in January and February in the largest displacement in the West Bank since Israel captured the territory in the 1967 Mideast war.

Israel says the operations are needed to stamp out militancy as violence by all sides has surged since Hamas' Oct. 7, 2023, attack ignited the war in Gaza.

Fears of long-term displacement Israel's raids have emptied out and largely destroyed several urban refugee camps in the northern West Bank, like Tulkarem and nearby Nur Shams, that housed the descendants of Palestinians who fled or were driven from their homes in previous wars.

Israel says troops will stay in some camps for a year.

People with means are living with relatives or renting apartments, while the impoverished have sought refuge in public buildings. Now that the Muslim holy month of Ramadan has ended, many are being told to leave.

"This is a big problem for us, as the schools cannot be used for the displaced because there are students in them, and at the same time, we have a shortage of financial resources," said Abdallah Kmeil, the governor of Tulkarem.

He said the Palestinian Authority is looking for empty homes to rent to families and plans to bring prefabricated containers for some 20,000 displaced. But it’s unclear when they will arrive.

Seven minutes to pack

The matriarch said Israeli troops gave the family seven minutes to pack when they evicted them from the Nur Shams camp in early February. They left with backpacks and a white flag to signal they weren't a threat.

Shelters were overcrowded. People slept on floor mats with little privacy, and dozens at times shared a few toilets and a shower.

The family tried to return home when soldiers allowed people to go back and get their belongings. Days later, they were forced to leave again, and soldiers warned that their house would be burned if they didn’t, the woman said.

The family found a charity center that doubles as a wedding hall in a nearby town. Now, with the onset of wedding season, they have had to leave.

When the family feels homesick, they walk to a hilltop overlooking Nur Shams.

Palestinians sheltering in and around Tulkarem say they feel abandoned. Much of the aid they were receiving, such as food and clothes, came from the community during Ramadan, a time of increased charity. Now that has dried up.

Israel's crackdown in the West Bank has also left tens of thousands unemployed. They can no longer work the mostly menial jobs in Israel that paid higher wages, making it harder to rent scarce places to stay.

Iman Basher used to work on a Palestinian farm near her house in Nur Shams. Since fleeing, the day's walk there is too far to travel, she said. The 64-year-old was among dozens of people recently forced from another wedding hall. She now sleeps on a mat in another packed building.

Basher said soldiers raiding her house stole about $2,000, money she had been saving for more than a decade for her children’s education.

An Israeli military spokesperson said the army prohibits the theft or wanton destruction of civilian property and holds soldiers accountable for what it called "exceptional" violations. The army said gunmen fight and plant explosives in residential areas, and soldiers sometimes occupy homes to combat them.

‘The scale of the displacement is beyond us’

Aid groups said some displaced people are living in unfinished buildings, without proper clothes, hygiene, bedding or access to healthcare.

"It’s hard to find where the need is ... The scale of the displacement is beyond us," said Nicholas Papachrysostomou, emergency coordinator in the northern West Bank for Doctors Without Borders.

The charity's mobile clinics provide primary healthcare, but there’s a shortage of medicine and it’s hard to get supplies because of Israeli restrictions and financial constraints by the West Bank's health ministry, he said.

The UN agency for Palestinian refugees, known as UNRWA, plans to disburse $265 a month to about 30,000 of the most vulnerable displaced people, but there is enough money for only three months, said Hanadi Jaber Abu Taqa, head of UNRWA in the northern West Bank.

The agency's money mostly goes to Gaza. Just over 12% of the funds it seeks from donors for this year will be allocated to the West Bank.

Portable housing for the many displaced would only be a temporary fix. Some Palestinians said they wouldn't accept it, worrying it would feel like giving up their right to return home.

Isam Sadooq had been helping 60 displaced people staying at a youth center in Tulkarem. Last month, he was told, by the people who run the center, that they should consider evacuating so children can resume sports.

"If we cannot find them another place to live, what will be their fate?" he said. "They will find themselves in the street, and this is something we do not accept."