Lebanon Is Collapsing, Along With Its Banks and Hospitals

The country is in lockdown, unemployment is over 30 percent, coronavirus patients are being left outside hospitals, theft is soaring – and there’s no government

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Members of the Lebanese Red Cross transfer a coronavirus patient to the COVID-19 department of the Nabih Berri university hospital, in Nabatiyeh, January 9, 2021.
Members of the Lebanese Red Cross transfer a coronavirus patient to the COVID-19 department of the Nabih Berri university hospital, in Nabatiyeh, January 9, 2021.Credit: Mahmoud ZAYYAT / AFP
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

The enormous overcrowding in Lebanon’s hospitals and the shortage of beds, especially in intensive care units, has created a new problem.

Coronavirus patients who need urgent care call ambulances that take them to the hospital’s door. They are then left there in wheelchairs, on the assumption that the hospital won’t just let them sit there. That’s because when people try to call in advance to say they’re coming, they are told that there’s no space and they have to find someplace else.

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But the assumption that the hospital will eventually admit the patient is already outdated. According to reports from Lebanon, patients are waiting outside hospitals for hours, until their families finally take them back home.

The lucky ones who do gain admission have to bring food, medicine and bedding from home. Many patients lie in the corridors, without being connected to monitors or ventilators. The hospitals are severely understaffed, as some staff have been infected and others have simply left their jobs due to overwork and frustration – and, no less importantly, because they haven’t been paid for months.

According to the unreliable official statistics, some 200,000 Lebanese have contracted the coronavirus. Over 1,500 have died, and more than 4,500 new cases are diagnosed every day.

Last Thursday, the caretaker government headed by Prime Minister Hassan Diab announced a loose three-week lockdown that includes a curfew from 6 P.M. to 5 A.M. and restrictions on movement. On different days, travel is restricted to cars with odd or even license plate numbers.

Hundreds of checkpoints were set up and thousands of lockdown violators were fined. Within two days, however, the government realized that these steps were insufficient. Consequently, this Thursday it imposed a much tighter lockdown, requiring citizens to receive a one-hour permit before leaving home for emergencies and forcing supermarkets to close their doors and only make deliveries. 

As for vaccines, the Lebanese can currently only dream about them. According to the Lebanese Health Ministry, the first shipment of Pfizer vaccines will arrive only in February, and it will suffice to vaccinate only around 20 percent of the country.

To treat patients in serious condition, the country’s hospitals need hundreds of additional beds – each at a cost of $30,000 to $40,000 per bed, including accompanying equipment. That’s a huge sum, especially for Lebanon’s 127 private hospitals, which say the government owes them $1.5 billion, dating back to 2012. To buy equipment and medicine, they need to pay importers in advance and in dollars. The importers won’t accept checks or promises, even those backed by state guarantees. This distrust is well founded: the central bank has announced that its reserves have fallen to only about $2 billion, and these are earmarked for imports of essential staple goods.

Billions under the mattress

Lebanese dollar deposits are imprisoned in the banks, with government regulations prohibiting the money from being withdrawn. One result is that individuals and companies started hoarding their money, whether local or foreign currency, under the floorboards or in safes. By one estimate, more than $10 billion are currently being held outside the banking system.

To ease dollar transactions, mainly for importers, the central bank decided to raise the liquidity ceiling. But this could make it harder for the banks to meet their obligations to depositors.

A customer next to nearly empty shelves after authorities began discussing the latest measures to implement to curb the spread of coronavirus, in Beirut, Lebanon, January 11, 2021. Credit: REUTERS/Mohamed Azakir

The central bank also took the pointless step of ordering commercial banks to demand that anyone who took more than $500,000 out of the country last year – in violation of regulations barring money from leaving the country – repay some of that money. The banks sent letters to their customers to this end, but so far, it doesn’t seem as if any of them intend to obey the order.

Nor is any new infusion of dollars, in the form of either special assistance or a loan from the International Monetary Fund, visible on the horizon. As long as there’s no broadly acceptable government and no orderly economic reform plan, no country or financial institution will send so much as a single dollar to that cash sieve known as the Lebanese state treasury.

The only aid the government is getting is for dealing with the coronavirus. But that isn’t even enough to cover day-to-day needs, much less a long-term recovery program or repayment of the government’s debts to the hospitals.

Awaiting Biden

With the country under lockdown and an unemployment rate above 30 percent, new “industries” are developing. According to the Lebanese Interior Ministry, the rate of theft is up by double digits compared to previous years.

Car theft is a particularly lucrative business, evidently. Stolen cars go to Syria, where there are two options – selling them to ordinary Syrians at a low price, or selling them back to their Lebanese owners. If the owner agrees, the car will arrive at the Syrian-Lebanese border, where the owner can pick it up and drive it back home – until the next time it’s stolen.

Smuggling to Syria has long been a thriving industry, but there has recently been a change in the variety of goods being smuggled. They now include staple products like flour, oil and gas, which are highly subsidized in Lebanon but sold at market prices in Syria.

The government is now, very belatedly, considering ending these subsidies, which cost the state some $6 billion a year, and replacing them with direct aid to the poor. A needy family would get an estimated $400 a month.

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

But like every other proposal considered by the caretaker government, it will have to get through a political minefield before it’s approved. It’s therefore not clear if it will actually be adopted.

Some families are supported mainly by remittances from relatives working abroad, mainly in the Gulf states. Remittances account for 36 percent of gross domestic product, and Lebanon ranks third in the world (behind Tonga and Haiti) in terms of remittances per capita. Yet that source of income also fell last year, by more than six percent, to around $7 billion.

The country’s situation isn’t likely to change anytime soon, since talks on forming a new government have stalled over a political dispute involving ministerial appointments between the prime minister-designate, Saad Hariri, and President Michel Aoun.

Like every other country, Lebanon is awaiting Joe Biden’s entry into the White House to find out whether the conditions set by outgoing U.S. President Donald Trump, under which Lebanon’s new cabinet must not include any Hezbollah representatives, will remain in force – thereby thwarting the establishment of a government – or whether this condition will be softened due to Biden’s desire to resume negotiations with Iran, thereby allowing a government to be formed.

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