usr001

What's keeping the economic situation from freefalling even deeper into the abyss, is the money of the diaspora. Expats send back money to support their families. That's the lifeline, without which there would be famine.

What's keeping the economic situation from coming back up, is exactly what brought it down in the first place:

It's the complete failure of the state, with a political system that is rotten with power-hungry warlords, old and new, who won't let go. A people who remains divided because every few decades a faction decides it's so powerful now that it's its prerogative to hijack the country's destiny by use of force... And some big countries with huge influences (follower factions), using Lebanon as a card on their negotiating tables - some even see the situation as "chemothraphy to remove a cancer", and don't mind it staying. (Pardon the vagueness; the politics is quite complicated and not possible to give a clearer picture than this in a brief comment).

If with a magic wand all of those problems disappeared, and a new government materializes with full support from everyone to start fixes and reforms, it is estimated that it would take at least 10 years to bring the economy back to a healthy state.

But 3 years into the crisis and the governments since then still have not provided a single plan to come out of it. Just grandstanding, mutual accusations, deadlocks, hindering investigations, etc.

They always hope that some rich country would want to help and make big investments. But those countries, and world organizations, rightfully, do not trust the country's consecutive governments anymore because no reforms have been made and it's still the wild west of corruption.

The biggest problem is that those 3 years have witnessed the largest brain drain in the history of the country. Most doctors and nurses left; engineers, technicians, scientists, students, you name it. Resilient people who had seen everything and stayed, but there's always an edge too far.

Nowadays to buy one would be expensive, a black market.

But there is a defensive gun in every house in Lebanon. Some regions more than others. It's part of the history and, in a way, the culture.

There is no "random mass shootings" problem though. Innocent gun victims die in other ways, like stray bullets from celebrations in weddings and in speeches of political leaders, or the casual skirmish between the followers of two opposing political factions!

The crisis had already started.

The explosion came in a really bad time, and made things quite worse. Other than the destruction of half the capital, it also closed the main port for trade. And the tragedy pushed more people to lose hope and leave.

So did the pandemic. Salt to the wound, as people were unable to travel anymore (to get to their jobs, as most of the jobs are abroad).

So did the Syrian refugee crisis due to Syria's war (right next to the border). Lebanon has about 30% of its current population made of Syrian refugees, so there is less resources to go around for everyone. No country in a perfect economy could support that much influx of refugees at once.

When it rained, it poured!

It was bad financial policy to peg the Lira to the Dollar. It should have been free so that the exchange rate reflect its true value. The lifestyle with all the things you could buy in the country since the 90s at the official 1,500 LBP rate was a big lie; things should have been more expensive.

It was bad economic policy to ignore agriculture and industry, and make everything about tourism and services. So many imports could have been produced locally but weren't. E.g. as it became evidently clear when people couldn't find things like cheese and milk to buy anymore.

> There was no 'corruption' vodoo. Its just debt.

Debt that was spent to do nothing, to build nothing, but to fill the pockets of politicians and their cronies. Through 10 levels of contractors who fix nothing, to 100K new government jobs given in one year to people who don't even know where their offices are...

There was about 80B dollars lost only in the Ministry of Energy, presumably spent to get electricity to people, all now unaccounted for and still no electricity.... Politicians are billionaires, and only their cronies can get the important jobs and the big projects. And on and on...

Yes, there was rampant corruption. Still is. And it had a lot to do with the crisis.

He was asking for 15% of his own money, and not for a donation. To save a sick family member in an emergency.

If you come to me asking for your own money in such a situation, and I say - hard luck, I can't give them to you because I only have 5 ferraris now instead of 100 ferraris, and I kick you out humiliated... yeah I'd expect you to, at some point, snap!

It's easy to argue from an ivory tower, in a just society. But harder to imagine what it would be like when there's no justice anymore and there is no rule of law protecting your rights.

I think it's a moral question, and everyone will see this question from their viewpoint. Which is fair.

It used to be a big thing; a major attraction for international depositors.

But it's beginning to be removed under the current situation, because they want to disallow (criminalize) people from transferring their money out of the country (to protect it)

The run on the banks was an effect, not the cause.

So in the 1990s, after the country came out of a 2-decade civil war, the government adopted a policy of fixing the currency against the U.S. dollar. So regardless of the economic happenings, the conversion rate from LBP to USD was fixed.

But the economy was not really producing enough. It was mainly focused on tourism, which kept taking hits due to political instability. Too much imports, very little exports, but the currency was kept fixed.

This imbalance was sustained by the government borrowing from the central bank and the banks. They kept lending the government, even though it was clear that the money wasn't coming back.

Some of the money was being spent to support imports and big projects. But most of it was being siphoned away by corrupt politicians; which was pretty much all politicians.

After about 25 years, most of the money ran out. The depositors' money.

So what did the banks do? They started offering higher interest rates to attract foreign deposits. We're talking 10% or 15% interest rates. And they used those new deposits to support the continuing needs to lend the government. Incurring more debt to pay the previous debt.

That was essentially a Ponzi scheme, and the final tailspin began. Crash.

No juries, only judges. And most judges are heavily influenced politically.

A mix of both. Sometimes they tell people "we don't have cash anymore", they close the doors and don't let anyone in. Or just close the bank altogether for a long time (sometimes for fear of their lives).

Other times they give the account holder only one option to take money (say to send to their child's to pay for college abroad). And that option always involves the holder losing 5X to 10X of the value of their money. Write a check for $1000, sell it for $100, to get a $100...

At the end of the day, scarcity creates conflict.

And with that conflict, some employees choose to keep treating people with dignity and politeness, but without helping them (because they're following their bosses' policies.) And some just don't give a shit, slide into their dark side, and enjoy the power trip...

Everyone suffers. Bank employees are among the few who are maybe grateful they still have a job; their salaries are also reduced. They fear for their lives many days, because they get so much anger directed at them. Some branches close for a week in some areas because they're afraid of the people. But to do their jobs, many eventually become accustomed to treating the people as the "other"; perhaps similarly to how doctors/surgeons sometimes end up treating people like subjects.

The police went through periods of low wages as well. But the government prioritizes supporting them financially, because otherwise they'd have to make their money to support their families with other means!

At the end of the day though, every person's suffering is being delivered to them by another person.

I don't disagree. After all, without such deterrent, the very next day all the banks in the country would be held at gunpoint.

There are many, many people who feel just like he does and are already on the edge, after having been shit on by banks and bank employees for 2 years now. Bank employees humiliate people, as it became a kind of Stanford Experiment. There were even demonstrations outside in his support, during the hostage situation, the moment it hit the news!

And this is why this story is making the rounds.

Even from a legal perspective, the banks don't have the right to do what they're doing. But the government is enabling them to do so, while the parliament is "trying" to work on new laws to regulate this period of "capital control". But no one will come after the banks. The government(s) caused this situation in the first place by borrowing the money from the banks, so it's not like there is anyone on the side of the regular Joe in all of this.

People are on edge, and desperate. Poverty and humiliation, after long hard working lives, to see all of their life savings disappear.

This the kind of environment in which people stop believing that the rule of law is just or should continue.

Lebanese here. To answer some of the questions in this thread:

- No, Lebanon does not follow Islamic Banking.

- No, people can't make wire transfers anymore. All bank accounts are frozen, you can't withdraw your own money. You have to beg and wait in line for weeks to be able to get a tiny amount of your account to be able to buy bread etc.

- The local currency collapsed, lost more than 90% of its value. If the bank decides to give you some change (from your own money), they play money conversion tricks so that e.g. your account is down $1,000 but you get $100 only.

- This person did not "rob" the bank. He tried asking the bank for money because his father (and some people said his child as well) were in the hospital, needed medical care, and for that the hospital needed money. He had $210K in his account, but the bank kept kicking him away in previous attempts to appeal to them. He came back with a gun, and held hostages. Negotiated until they give back $35K, to his brother who was waiting outside. Then he surrendered without hurting anyone.

- He is now in bad health because he's on a hunger strike after they arrested him. (In the negotiation they promised him not to arrest him, but of course they need to make an example out of him.)

- Why is this all happening? Bad economic and financial policies for 40 years, rampant corruption. The economy was unproductive, but they kept the local currency subsidized, as it turns out by just spending the money that people deposited in the banks. And it's all gone now.