Lebanon on Edge as Time, Money Run Out

FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
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Lebanon on Edge as Time, Money Run Out

FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir

Fouad Khamasi fills his taxi every day with about 40,000 Lebanese pounds' worth of fuel. It could cost at least four times that much if subsidies come to an end.

The Beirut cab driver, 53, can just about afford to buy fuel and feed his kids. He worries the price of subsidized foods and key imports - wheat, fuel, medicine - will skyrocket.

"These are the toughest days I've ever seen," Reuters quoted him as saying. "Some days, you stick your hand in your pocket and find nothing ... I leave the house and just pray. Whatever I make, it does nothing. It's a joke."

Time and money are running out for Lebanon.

Foreign reserves have dropped far below what the state already deemed "dangerous levels" when it defaulted on its huge debt in March, meaning it cannot afford to keep subsidies for long.

Leaders in power for decades have yet to enact a financial rescue plan, a year after huge protests against them swept the country, and they have failed to secure aid from foreign donors.

Talks with the International Monetary Fund (IMF) stalled earlier this year when Lebanese government officials, bankers and political parties could not agree over how big the losses were in the financial system and who should bear them.

After a massive explosion at Beirut's port in August that killed nearly 200 people and caused billions of dollars worth of damage, France stepped in.

But rival sectarian politicians could not get past the first hurdle on the French roadmap towards financial aid: naming a new cabinet quickly.

The currency, which has lost more than 80% of its value against the US dollar since last autumn, weakened after the French effort faltered.

Meanwhile, comments from officials indicating an end to some subsidies within months have triggered panic buying, raising the specter of food shortages and a more dramatic crash in the currency.

In the nation of some six million people, more than 55% of whom are below the poverty line, many are bracing for hunger and cold as winter looms.

"Everything that happened since last October could have been avoidable," Nasser Saidi, a former vice central bank governor, told Reuters.

He said targeted aid to the poorest Lebanese would be more effective than subsidies across the board, which had benefited smugglers taking goods into Syria.

"It's all kicking the can down the road. What should have been done is a full economic and financial plan," Saidi said.

Importers of key commodities said they had not been given a timeline to plan for how long subsidies could last.

Central Bank Governor Riad Salameh has said the bank could not finance trade indefinitely, although he gave no timeframe.

President Michel Aoun said recently of reserves: "The money will run out. What can we say?"

An official source close to the government told Reuters the money left for subsidies would last six more months by cutting support for some goods.

The state, which critics say is mired in corruption, and the paralyzed banking sector, its biggest creditor, have traded blame for the crisis.

Meanwhile, the wealth gap, already one of the region's largest, widens. In a country that relies heavily on imports and produces little, prices for many items including diapers have tripled.

In Beirut, men and women, some with young children, can often be seen digging for food in dumpsters near city intersections.

Two months after the port blast, Lebanese expect life to get even harder.

Many families now rely on charity. The meltdown could render people more dependent on political factions for aid and security, in a throwback to the militia days of the civil war.

Some analysts have warned that security forces, their wages fast losing value, would not be able to contain rising unrest. Hospitals fighting a surge in COVID-19 cases are overstretched. Fuel shortages have left city streets dark. Cars line up at petrol stations for rationed fuel.

"We're scared we won't be able to go on," said Siham Itani, a pharmacist who fears price hikes and being robbed. She said supplies of insulin and blood pressure medication had dwindled.

Another pharmacist said a masked man had held her up at gunpoint, asking for baby food.

Mostafa al-Mohalhal, who at 62 suffers from diabetes, stored four insulin vials in his fridge, but the daily power cuts spoiled them.

"If the price rises, how will I pay for them?" he said. "People will die in the streets."



Lebanon's Army Chief Joseph Aoun, a Man with a Tough Mission

Lebanon's Armed Forces Commander General Joseph Aoun attends a cabinet meeting in Beirut on November 27, 2024, to discuss the ceasefire between Israel and Hezbollah. - AFP
Lebanon's Armed Forces Commander General Joseph Aoun attends a cabinet meeting in Beirut on November 27, 2024, to discuss the ceasefire between Israel and Hezbollah. - AFP
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Lebanon's Army Chief Joseph Aoun, a Man with a Tough Mission

Lebanon's Armed Forces Commander General Joseph Aoun attends a cabinet meeting in Beirut on November 27, 2024, to discuss the ceasefire between Israel and Hezbollah. - AFP
Lebanon's Armed Forces Commander General Joseph Aoun attends a cabinet meeting in Beirut on November 27, 2024, to discuss the ceasefire between Israel and Hezbollah. - AFP

Lebanese army chief Joseph Aoun, who is being touted as a possible candidate for the presidency, is a man with a tough mission following an Israel-Hezbollah ceasefire that relies heavily on his troops deploying in the south.

Aoun, 60, was set to retire last January after heading the army since 2017, but has had his mandate extended twice -- the last time on Thursday.

The army, widely respected and a rare source of unity in a country riven by sectarian and political divides, has held together despite periodic social strife, the latest war and a crushing five-year economic crisis.
A fragile ceasefire took effect on Wednesday, ending more than a year of war between Israel and Hezbollah that has killed thousands in Lebanon and caused mass displacements on both sides of the border.
Under its terms, the Lebanese army and United Nations peacekeepers are to become the only armed presence in south Lebanon, where Hezbollah enjoys strong support and had been launching attacks on Israeli troops for months, and fighting them on the ground since late September.

The move averted a military power vacuum as the army, which boasts about 80,000 Lebanese servicemen, seeks to bolster its deployment in south Lebanon as part of the nascent truce.

But it will be a difficult task in an area long seen as Hezbollah territory, and risks upsetting the country's already delicate social balance as tensions run high over the war's course and devastation.

- 'Integrity' -

Aoun "has a reputation of personal integrity", said Karim Bitar, an international relations expert at Beirut's Saint-Joseph University.

The army chief came into prominence after leading the army in a battle to drive out the ISIS group from a mountanous area along the Syrian border.

"Within the Lebanese army, he is perceived as someone who is dedicated... who has the national interest at heart, and who has been trying to consolidate this institution, which is the last non-sectarian institution still on its feet in the country," he told AFP.

Aoun has good relations with groups across the political spectrum, including with Hezbollah, as well as with various foreign countries.

Mohanad Hage Ali from the Carnegie Middle East Center noted that "being the head of US-backed Lebanese Armed Forces, Joseph Aoun has ties to the United States".

"While he maintained relations with everyone, Hezbollah-affiliated media often criticized him" for his US ties, he told AFP.

An international conference in Paris last month raised $200 million to support the armed forces.

The military has been hit hard by Lebanon's economic crisis, and at one point in 2020 said it had scrapped meat from the meals offered to on-duty soldiers due to rising food prices.

Aoun has also been floated by several politicians, parties and local media as a potential candidate for Lebanon's presidency, vacant for more than two years amid deadlock between allies of Hezbollah and its opponents, who accuse the group of seeking to impose its preferred candidate.

Aoun has not commented on the reports and largely refrains from making media statements.

- President? -

A Western diplomat told AFP that "everyone has recognized Aoun's track record at the head of the army".

"But the question is, can he transform himself into a politician?" said the diplomat, requesting anonymity to discuss politically sensitive matters.

Bitar said that "many, even those who respect him are opposed to his election as president, because he comes from the army mostly", noting a number of Lebanon's heads of state, including recently, were former army chiefs.

Most "left a bittersweet taste", Bitar said, noting any election of Aoun could also perpetuate the idea that the army chief "systematically becomes president".

This could end up weakening the military as it creates "an unhealthy relationship between political power and the army, which is supposed to remain neutral", he added.

Hage Ali said that the idea of Aoun's "candidacy for the presidency did not receive much enthusiasm from the major figures in the political class, even those who are opposed to Hezbollah".

Aoun, who speaks Arabic, French and English, hails from Lebanon's Christian community and has two children.

By convention, the presidency goes to a Maronite Christian, the premiership is reserved for a Sunni Muslim and the post of parliament speaker goes to a Shiite Muslim.

He is not related to the previous Lebanese president Michel Aoun -- also a former army chief -- although the two served together in the military.