Lebanon’s economy faces stark choice: Reform or collapse

Prime minister-designate Saad Hariri still has not formed a government to undertake the reforms necessary to unlock the donors’ funds. (AFP)
Updated 23 November 2018
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Lebanon’s economy faces stark choice: Reform or collapse

  • It has been more than six months since Lebanon held its first national elections in nine years
  • Lebanon still has a primitive infrastructure, widespread electricity and water cuts and a longstanding waste

BEIRUT: Lebanon is marking 75 years of independence with a military parade Thursday in Beirut, but many anxious Lebanese feel they have little to celebrate: the country’s corruption-plagued economy is dangerously close to collapse and political bickering over shares in a new Cabinet is threatening to scuttle pledges worth $11 billion by international donors.
The World Bank issued a stark warning last week, with one official saying that unless a government is formed soon to carry out badly needed reforms, “the Lebanon we know will fizzle away.”
It’s been more than six months since Lebanon held its first national elections in nine years but the prime minister-designate, Saad Hariri, still hasn’t formed a government to undertake the reforms necessary to unlock the donors’ funds.
The vote, in which the Shiite militant Hezbollah group and its allies made significant gains, did little to pull Lebanon out of a political impasse. Anger against politicians’ apparent indifference, worsening public services and distress over down-spiraling finances and gloomy predictions are building up.
Last Friday, heavy rains caused Beirut’s sewage system to burst, turning the city’s famous Mediterranean coastal avenue into a river of filthy, foul-smelling black water that engulfed motorists along the otherwise scenic route. On the same day, the military had closed a main artery for drills ahead of the Independence Day parade, paralyzing traffic for hours. Flights from Beirut’s international airport were missed and a woman reportedly went into labor on the road. The army later apologized.
Despite a population of over 4.5 million that is among the most educated in the region, Lebanon still has a primitive infrastructure, widespread electricity and water cuts and a longstanding waste crisis that over the past few years saw trash piling in the streets for weeks at a time.
“There is no independence (to celebrate) because corruption is eating us up,” said Mohammed Al-Rayyes, a shop owner in Beirut’s Hamra district. “The coming days are going to be very difficult.”
The tiny Arab country has coped with multiple political and security crises over the past decades and also suffered from the seven-year civil war in neighboring Syria, a conflict that has occasionally spilled over the border and brought more than 1 million refugees into Lebanon, putting even more pressure on its dysfunctional infrastructure.

 

A soaring debt of $84 billion and unemployment believed to be around 36 percent are compounding concerns that the country will finally cave in.
“It is a shame because so much time is being wasted,” Ferid BelHajj, the World Bank’s vice president for the Middle East and North Africa, said during a meeting with a group of journalists last week.
For years, he said, Lebanese officials have been promising to work on solving the electricity crisis, which costs the country about $2 billion a year and has been the main factor in accumulating Lebanon’s debt.
Of immediate concern is the future of $11 billion in loans and grants pledged by international donors at a meeting in Paris in April, which Lebanon risks losing if no Cabinet is in place soon to unlock the funds and approve reforms that were set as conditions by the donors and which have been delayed for years. In April, Hariri pledged to reduce the budget deficit by 5 percent over the next five years.
The crisis has prompted some Lebanese to change their deposits from the local currency, which has been pegged to the US dollars since 1997, to US dollars for fear the Lebanese pound might collapse. Riad Salameh, the Central Bank governor, has been repeatedly reassuring the markets, saying the local currency is stable.
Mohamad Shukeir, head of the Chambers of Commerce, Industry and Agriculture, told the local MTV station that 2,200 businesses closed doors so far this year.
Aftershocks of rising tension between the United States and Iran are also felt in Beirut, with Tehran ally Hezbollah being blamed by opponents for preventing Western-backed Hariri from forming a national unity government.
Hezbollah has demanded that six Sunni lawmakers allied with the Shiite group and opposed to Hariri be included in his Cabinet — something that Hariri, the country’s top Sunni Muslim leader, categorically rejects.
Despite the dangers, political bickering is not likely to end soon and the debt is mounting.
“The level of debt that we have in Lebanon requires us to act very quickly,” said economist Kamel Wazne. “Any delay will expose us to financial collapse.”
BelHajj of the World Bank said that reforms would act as a buffer to the crisis. But in their absence, “the crisis can be very nasty.”
“If we don’t go about these reforms fast, the Lebanon that we know will fizzle away,” he said.

FASTFACTS

Despite a population of more than 4.5 million that is among the most educated in the region, Lebanon still has a primitive infrastructure, widespread electricity and water cuts and a longstanding waste crisis that over the past few years saw rubbish piling in the streets for weeks at a time.


Iranian bread permanent guest at Kuwaiti tables

For decades, Taftoon bread has been a staple of Kuwaiti dinning tables. (AFP)
Updated 17 July 2019
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Iranian bread permanent guest at Kuwaiti tables

  • Taftoon has remained popular in Kuwait despite escalating tensions in the past year between Iran on one side and the US on the other

KUWAIT CITY: Khalil Kamal makes sure he regularly visits Kuwait’s popular Souq Al-Mubarakiya, where he enjoys his favorite kebab meal with onion, rocket and freshly baked Iranian bread.
The smell of the bread wafts through the market as it bakes in a traditional oven at the Al-Walimah restaurant in downtown Kuwait City.
The restaurant’s Iranian baker takes one of the many dough balls lined up in front of him and spreads it over a cushion, using the pad to stick the dough against the inside wall of the clay oven.
Once ready, he uses a long stick to reach in and pull out a steaming rounded loaf, served piping hot to customers.
For decades, Iranian bread — known as taftoon — has been a staple of Kuwaiti breakfast, lunch and dinner tables.
“Iranian bread is the only bread we’ve known since we were born,” 60-year-old Kamal told AFP.
Hassan Abdullah Zachriaa, a Kuwaiti of Iranian origin, opened Al-Walimah in 1996. Its tables are spread across a courtyard, surrounded by wooden columns and entryways.
Zachriaa, in his 70s, said the restaurant puts out between 400 and 500 loaves of Iranian bread a day.
“The big turnout in Kuwait for Iranian bread stems from the fact that for decades, our mothers used to make it at home,” he told AFP.
“We then started to buy it from bakeries and stand in lines to get it fresh and hot in the morning, noon and evening.”
The flat bread is offered alongside many dishes popular in Kuwait such as Al-Baja, lamb bits stuffed with rice, Al-Karaeen, cooked sheep feet, classic chickpea plates, or beans and cooked fish.
Almost all restaurants in the old market have their own traditional clay ovens where either Iranian or Afghan bakers work.

HIGHLIGHTS

• Taftoon is offered alongside many dishes popular in Kuwait such as Al-Baja, lamb bits stuffed with rice.

• Almost all restaurants in the old market have their own traditional clay ovens where either Iranian or Afghan bakers work.

• The bread has remained popular in Kuwait despite escalating tensions in the past year between Iran on one side and the US on the other.

• Bakeries specializing in Iranian bread began popping up in Kuwait in the 1970s and have since expanded to more than 100.

Derbas Hussein Al-Zoabi, 81, a customer at Al-Walimah, said many Kuwaitis were raised on Iranian bread.
“Since childhood, Iranians baked bread for us ... and we used to eat it in the morning with milk and ghee” — clarified butter.
Other than at street markets, Kuwaitis can buy Iranian bread from co-ops, where people line up in the early hours of the morning and again in the evening to get the freshly baked goods.
Some bakeries even have designated segregated entryways for men and women.
Some Kuwaitis customise their orders with spreads of sesame, thyme and dates, and many come prepared with cloth bags to keep the bread as fresh as possible on the trip home.
Bakeries specializing in Iranian bread began popping up in Kuwait in the 1970s and have since expanded to more than 100, according to deputy chief of the Union Co-operative Society Khaled Al-Otaibi.
“These bakeries produce 2 million loaves of bread a day to meet the needs of Kuwaitis and residents,” he told AFP.
“They receive fuel and flour at a subsidised price so that bread is available for not more than 20 fils (less than seven cents).”
The price however can go to up to 50 fils depending on the amount and type of additives, including sesame and fennel.
Taftoon has remained popular in Kuwait despite escalating tensions in the past year between Iran on one side and the US on the other.