Page 4 - DMEA Week 32

DMEA COMMENTARY DMEA

Lebanon’s government resigns

amid unrest over port blast

The disaster has sparked nationwide protests against authorities over years

of economic mismanagement and rampant corruption

LEBANON LEBANON’S government resigned on August since then, as the coronavirus (COVID-19) pan-
10, after days of nationwide protests following demic has put further pressure on an economy
WHAT: last week’s massive explosion in Beirut. already deep in crisis.
Lebanon’s government Lebanese Prime Minister Hassan Diab Even before the pandemic, Lebanon’s public
has resigned after mass announced his resignation almost a week after debt-to-GDP ratio was the third highest in the
protests over last week’s the blast, which flattened most of the capital’s world, while its unemployment rate was 25%.
port explosion. port and surrounding area. It left some 200 Nearly a third of the country’s population was
people dead and wounded 6,000 others. It was estimated to be living in poverty.
WHY: caused by the detonation of 2,750 tonnes of For many years the central bank ran what
Lebanon’s economy ammonium nitrate, stored unsafely at the port many experts have described as a Ponzi scheme,
was in crisis before the for years. The disaster has stoked public anger, borrowing increasing amounts to pay back exist-
pandemic, and the blast sparking nationwide protests against authorities ing debts. This system finally became unsustain-
has stoked public anger over years of economic mismanagement and able last year and collapsed.
against corruption. rampant corruption. Against this backdrop, the state found itself
struggling to provide even basic services such as
WHAT NEXT: Economic tailspin electricity. Anger was mostly directed towards
Selecting a new PM Diab took office in January after months of dead- the ruling elite, seen as having profiteered
will be difficult, given lock, standing on a platform of reform. But his for years while the rest of the population has
sectarian politics. government has faced a series of major protests struggled.

P4 www. NEWSBASE .com Week 32 13•August•2020