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  • On Aug 4th, this warehouse in Beirut, Lebanon, caught fire.

  • When the fire spread through the building, this happened.

  • The fire detonated about 2700 metric tons of ammonium nitrate; a highly explosive material

  • that was stored here in the Port of Beirut.

  • The explosion leveled the port and left a zone of destruction 6 miles wide, killing

  • nearly 200 people, and wounding thousands.

  • Long before the explosion, Lebanon's economy was in a deep crisis.

  • Unemployment and poverty were on the rise.

  • And people flooded the streets in outrage over and over again.

  • For many, the explosion was the last straw.

  • So, how did Lebanon fall so farand what can be done to fix it?

  • The first thing to understand is the make up of Lebanon's population.

  • For centuries, it's been home to both Christians and Muslims.

  • Both communities are further divided into religious subgroups or sects; the largest

  • being Maronite Christians and Sunni and Shia Muslims.

  • In the mid-20th century, these three sects shared power, but there was tension between

  • them.

  • In 1975, Maronite and Muslim militias sparked a civil war.

  • In Lebanon, a country now torn in two by the vicious battle for supremacy

  • between Christians and Muslims.

  • Two dozen ceasefires have been agreed and broken.

  • Soon other sects formed militias and joined the conflict.

  • In 1976, Syria invaded and in 1982 Israel followed, fueling more violence.

  • Fighting was particularly brutal in Beirut, which was divided among

  • the militias.

  • The Muslims control West Beirut.

  • The Christians are entrenched in the east.

  • The toll of human life is horrifying.

  • Over the course of 15 years, more than 120,000 people died.

  • Finally, in 1989, representatives of Lebanon's sects came together with other international

  • leaders to end the war.

  • They signed the Taif Agreement which divided the government among the sects.

  • In parliament, each group received a set number of seats and specific positions.

  • The President would be a Maronite, the Prime Minister a Sunni, and the Speaker of the Parliament

  • a Shia.

  • Shortly after signing the agreement, most of the militias disbanded but many of their

  • leaders found a place in government.

  • In this system, political parties were formed along religious lines and each sect claimed

  • different government ministries.

  • But this system wasn't designed to be permanent.

  • Instead, the politicians separated their portions of the government and turned them into fiefdoms.

  • Using them to enrich themselves and their sects.

  • While using public money for personal gain, the politicians neglected to spend money on

  • the services they were supposed to provide, like garbage collection.

  • A report found that Lebanon was paying about $420 million a year for waste management.

  • Despite that, in 2015, garbage piled up around the country while politicians argued over

  • a new contract.

  • It was the same story across the government.

  • It spent $1 billion a year on electricity, a sector controlled by the Maronites, but

  • there were blackouts multiple times a day.

  • Every household paid a fee for public water, but much of it was undrinkable.

  • By 2015, discontent against government corruption was on the rise.

  • But nothing changed.

  • And that meant the same people stayed in power.

  • So government corruption continued to go unchecked.

  • Over time, the government racked up dangerous amounts of debt.

  • By 2015, it owed nearly $70 billion.

  • More than the country's entire GDP.

  • But instead of trying to fix the problem, the government turned its attention to Lebanon's

  • most important industry.

  • Lebanon's businesses pay for imports with US dollars, which they get through the banks.

  • And Lebanon's banks famously offer high interest rates, which attract deposits from

  • clients all over the world.

  • Making it the most important sector in Lebanon.

  • Most of the banks are owned by or have ties to the sectarian politicians. And together,

  • they created a scheme to bring more money into the government.

  • It started with the central bank, which funds the government, offering very high interest

  • rates as an incentive to commercial banks.

  • So the banks deposited money there and made a huge profit from this interest.

  • In turn, the banks hiked their own interest rates even higher to attract deposits from

  • around the world.

  • And then poured that money into the central bank.

  • But this was unsustainable, neither the banks nor the government could really cover all

  • this interest.

  • "It's quite accepted that it's a bit of a Ponzi scheme."

  • The only thing keeping this scheme together was the banks ability to attract more and

  • more money.

  • And that started to crack in 2011 when Lebanon's neighbor, Syria, collapsed into civil war.

  • Worried about putting their money so close to the conflict, investors started pulling

  • out of Lebanon's banks.

  • But the scheme didn't fully unravel until 2017, when Lebanon's Prime minister disappeared.

  • I hereby announce my resignation as Prime Minister from Lebanon's government.

  • Knowing that the will of the Lebanese is stronger and their determination is steadfast..

  • The Sunni Prime Minister, Saad Harari, resigned via a televised statement

  • from Saudi Arabia.

  • Then reports claimed the Saudis forced him to resign and were keeping him there.

  • Nothing has justified the apparent detention of Hariri by Saudi Arabia.

  • Saad Hariri and his family are hostages in the Kingdom.

  • After ten days the Prime Minister returned to Lebanon and took back his office but the

  • damage was done.

  • This time international investors lost faith in Lebanon and deposits plummeted.

  • Even Lebanese residents rushed to pull their money out of the banks.

  • Without new deposits, government and bank debt skyrocketed.

  • In 2019, the banks ran out of money and froze accounts, limiting what people could withdraw.

  • Leaving Lebanon's people with a catastrophic problem.

  • To cover its debt, the government announced a new tax, sparking a revolution.

  • Lebanon is in the grip of unprecedented protest.

  • The anger was sparked by a government's announcement of a daily tax of 20 cents a

  • day on messaging apps such as WhatsApp.

  • To many, it was evidence that the whole system was corrupt.

  • And people from all sects flooded the streets in some of the biggest protests Lebanon had

  • seen in decades.

  • It was enough to force Prime Minister Hariri to finally step down, but the political parties

  • stayed in power.

  • Meanwhile, other countries and international organizations offered economic aid to Lebanon

  • if the government could reform itself.

  • But the politicians couldn't agree and the economy kept falling apart.

  • In one year, Lebanon's currency lost more than 80% of its value.

  • And unemployment has reportedly surged.

  • This was the state of the country when an explosion rocked Beirut.

  • While at first the explosion appeared to be an accident, it turned out to be the result

  • of this dysfunctional system.

  • According to reports, the ammonium nitrate sat in the port for seven years while government

  • officials bickered over who was responsible for it.

  • It's criminal negligence at best.

  • Prime minister Hassan Diab and several ministry leaders resigned, but the power-sharing agreement

  • remains intact.

  • It's why many in Lebanon feel the country can't recover until this system is abolished.

  • To make matters worse, there's been a spike in coronavirus cases since the blast.

  • And now with its only major port destroyed in the explosion, Lebanon is struggling to

  • import what its people need to survive.

  • It's left the Lebanese people to simultaneously demand for change and pick up the pieces.

On Aug 4th, this warehouse in Beirut, Lebanon, caught fire.

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B1 INT lebanon government prime minister minister prime explosion

How the Beirut explosion was a government failure

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    林宜悉   posted on 2020/09/18
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