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Even if politicians deal, Lebanon faces a bleak future

Wednesday, April 7, 2021

Significance

The audit and wider structural economic reforms are preconditions for urgently needed foreign aid. Economic conditions in Lebanon are still worsening, with power cuts, food shortages and rising poverty.

Impacts

  • A new government would allow reform planning to resume and temporarily stall the decline of the currency.
  • The easing of the global pandemic will somewhat reduce the financial strain, as Lebanon reopens its economy.
  • Soaring poverty rates could provoke large-scale ‘bread riots’ in the coming months.
  • Further devaluation of the currency will make poor Lebanese more dependent on sectarian protection and strengthen patronage.
  • If the situation worsens, sectarian rural areas could revert to warlordism in the medium term.
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