Lebanese people have been denied access to their life savings as a result of a Ponzi scheme.

A policy was implemented encouraging an influx of US Dollars into the country by urging Lebanese citizens to deposit cash in banks on the promise of unrealistic double-digit interest rates. This Ponzi scheme inevitably collapsed in 2019. As a result of this, Lebanese citizens were denied access to their life savings. Switzerland is investigating the scheme alleged that the orchestrators transferred more than USD300 million in funds to an offshore company. Overnight, Lebanese people lost 70% of the value of their deposits in Lebanese banks and are only allowed to withdraw whatever is left in small increments due to the shortage of cash supply.

As a result of the Ponzi scheme, the value of the Lebanese pound (pegged to the US dollar) has plummeted.

Historically and for a very long time, one US dollar could be exchanged for 1,500 Lebanese pounds. The rate is now ~40,000 Lebanese pounds for one US dollar. Hyperinflation means a month’s worth of food for a family of five now costs four times Lebanon’s minimum wage. For example, a kilogram of fresh beef has gone from 15,000 Lebanese pounds to 160,000 Lebanese pounds.

Covid-19 has had a devastating and irreversible effect on the Lebanese people.

Lockdowns occurred to protect life but this came at a very big economic cost. As a general rule, there is no government support or benefits available to the Lebanese people due to financial mismanagement by government and corruption. While Lebanese people are hard-working and self-sufficient and have in the past managed to get by in these circumstances, being locked in their homes meant that they were not able to work. In circumstances where most people are barely surviving on what little they earn, this resulted in widespread poverty.

Historically, government supplied electricity in Lebanon would only be provided for 6 to 12 hours per day. Houses and businesses would then rely on generators (that they owned or subscribed to) to have electricity for the remainder of the day.

The significant fuel shortage in Lebanon has meant that there isn’t enough diesel to run generators. This has led to a huge increase in the price of these subscriptions, making them unaffordable for most citizens. Most homes and businesses are therefore being forced to live without electricity.

The flow on effects of hyperinflation are numerous. One of the most devastating effects has been the immense shortage in the supply of medicine.

Supplies have been so scarce that citizens have been required to drive for hours around the country checking pharmacies for basic medicines like Paracetamol or antibiotics. This has been particularly difficult when children have been sick with fevers or have been suffering from an infectious disease requiring immediate treatment.

Over the last few years, hospitals have reached crisis point. Many hospitals have been forced to turn patients away and close down a number of their departments due to the shortage of essential medications and a lack of electricity; electricity which is predominantly supplied through generators running off petrol and diesel. A shortage in the supply of fuel as well as a significant reduction in government supplied electricity has not only devastated hospitals but also disrupted essential businesses.

The Beirut warehouse explosion caused billions of dollars in damage which directly dismantled the livelihoods of the Lebanese population.

In August 2020, a warehouse exploded at the Beirut port housing 2750 tonnes of ammonium nitrate. At least 100 people were killed and 4000 wounded. The homes and businesses of some 250,000 people were impacted. This led to a surge in unemployment and weakened food security. The devastation of the explosion is still being felt today.