Middle East: As tensions mount, a look at Lebanon’s myriad crises

The conflict between Israel and militarised groups in Gaza and Lebanon is unfolding against a backdrop of financial and political crises in Lebanon. 

The chances of an all-out conflict increased after Israel said it would strike hard against Hezbollah, based in southern Lebanon, after a rocket attack on a football field in the Israel-governed Golan Heights.

Though the conflict has been relatively contained so far, it is weighing heavily on a country where five years of domestic crises have hollowed out the state.

The conflict has forced some 95,000 people to flee southern Lebanon, according to the UN Office for the Coordination of Humanitarian Affairs.

Here’s an overview of Lebanon‘s troubles:

Lebanon’s contracting economy

Lebanon is still suffering after a catastrophic financial collapse that rocked the country in 2019.

Caused by decades of profligate spending and corruption in the ruling elite, the meltdown sank the currency, toppled the banking system, paralysed the state, and fuelled poverty and the biggest wave of emigration since the 1975-90 civil war.

The World Bank has described it as one of the sharpest depressions of modern times. Lebanon‘s economy shrank from $55bn in 2018 to $31.7bn in 2020. The government has yet to enact reforms needed for recovery.

It notes that the unfolding economic and financial crisis that started in October 2019 was further exacerbated by the dual economic impact of the Covid-19 outbreak, and the massive Port of Beirut explosion in August 2020.

Public sector workers, their salaries decimated, are among those still feeling the impact. Aid from Qatar and the US has given a slight boost to the wages of the Lebanese army, long seen as vital to preserving the civil peace.

The lingering damage was captured in a World Bank report in May that found poverty had more than tripled in Lebanon over the past decade, reaching 44 per cent of the population.

It found that one in three Lebanese was poverty-stricken in 2022 in five surveyed governorates, including Beirut. While new Beirut restaurants serve the rich, the World Bank report said three out of five households had cut back on food spending.

The International Monetary Fund said in May a lack of action on necessary economic reforms continued to exert a heavy toll on the economy and people. It said there was no credible and financially viable strategy for the banking system.

Lack of governance

Lebanon has not had a head of state or a fully empowered cabinet since Michel Aoun’s term as president ended in October 2022, leaving an unprecedented vacuum.

The government of Prime Minister Najib Mikati has been serving in a caretaker capacity since then. Filling the presidency and installing a fully empowered government requires a deal among Lebanon‘s deeply divided factions. Previous such crises have only been resolved through foreign mediation, but there has been no sign of effective intervention this time.

On one level, the standoff reflects rivalries among Maronite Christians, for whom the presidency is reserved under Lebanon‘s sectarian power-sharing system.

On another, it reflects a power struggle between the Shi’ite movement – which propelled its ally Aoun to the presidency in 2016 – and its opponents.

Syrian refugee crises

Thirteen years since Syria’s conflict broke out, Lebanon remains home to the largest refugee population per capita in the world.

About 1.5 million Syrians – half of whom are refugees formally registered with the United Nations refugee agency UNHCR – in a country of approximately 4 million Lebanese.

Funding for the Syria crisis is dropping, reflecting fatigue among donors grappling with other conflicts around the world. Despite their differences, parties from across Lebanon‘s political spectrum agree the Syrians should be sent home.

Read: Lebanon: Which countries are urging their citizens to evacuate now?