Lebanon economic crisis among world's worst since 1850s, says World Bank

The World Bank in a report released on June 1 said that Lebanon’s economic collapse is likely to rank among the world’s worst financial crisis since the mid-19th century. It also said that since late 2019, Lebanon has been flooded with challenges including the largest peace-time economic and financial crisis, COVID-19 pandemic, and a massive blast at Beirut’s port in 2020 which is also considered reportedly as one of the largest non-nuclear explosions in the history. As per reports, Lebanon defaulted on its debt last year and its currency has also lost around 85% of its value. The World Bank report also predicts that the country’s economy is likely to plunge by close to 10% this year and noted that there is “no clear turning point in the horizon.”

The World Bank stated in its report titled, “Lebanon Sinking: To the Top 3,” that “The Lebanon financial and economic crisis is likely to rank in the top 10, possibly top three, most severe crises episodes globally since the mid-nineteenth century.”

“This illustrates the magnitude of the economic depression that the country is enduring, with sadly no clear turning point on the horizon, given the disastrous deliberate policy inaction. The social impact of the crisis, which is already dire, could rapidly become catastrophic; more than half the population is likely below the national poverty line. Lebanon, with a history of civil war and conflicts, faces realistic threats to its already fragile social peace,” it added.

Lebanon’s power struggle between President, PM-designate

As per reports, the crisis in Lebanon has deteriorated further due to a paralysing power struggle between the president and the prime minister-designate that has delayed the formation of a government. Just days after August 4, 2020, blast the cabinet of Lebanon’s outgoing Prime Minister Hassan Diab. Since then, the country has not been ruled by a fully functioning government and the explosion at the Beirut Port also killed over 200 people and injured more than 6,000 while damaging the entire neighbourhood. "Policy responses by Lebanon's leadership to these challenges have been highly inadequate," the report says.

IMAGE: AP/Representative