Name: How the Beirut explosion was a government failure
Uploaded: 2020-09-18T18:05:39.000Z
Duration: 10 min 53 s
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On Aug 4th, this warehouse in Beirut, Lebanon, caught fire.

When the fire spread through the building, this happened.

Adverbs of degree

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 far… and 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

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

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

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 Christians are entrenched in the east.

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

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

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

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

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

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.

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.

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

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

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

And then poured that money into the central bank.

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

"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

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

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

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

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

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