The World Bank claimed in a press release linked to its newest assessment on Lebanon on Tuesday that the country’s economic downturn “is managed by the country’s elite” and “has come to undermine the country’s long-term stability and social harmony.”
Lebanon’s financial collapse began in 2019, the consequence of a badly managed spending binge that pushed up debt, political stagnation as competing groups squabbled, and international lenders’ unwillingness to bail out the country unless it restructured.
The World Bank rates the crisis as one of the world’s worst since the mid-nineteenth century, wreaking havoc on a nation that was previously seen as a rich and liberal enclave in the Middle East before civil war erupted from 1975 to 1990.
“Lebanon’s purposeful downturn is organized by the country’s elite, which has long dominated the state and lived off its economic rents,” according to the statement, which cited the World Bank Lebanon Economic Monitor Fall 2021 study.
“Despite the severity of the crisis – one of the top ten, if not the top three, most devastating economic catastrophes worldwide since the 1850s – this capture remains; it has come to endanger the country’s long-term security and social harmony.”
According to a press statement issued by the bank on Tuesday, Lebanon’s government income would fall by nearly half in 2021, to 6.6 percent of its GDP, the third lowest percentage in the world behind Somalia and Yemen.
According to the World Bank Lebanon Economic Monitor, real GDP is expected to have fallen by 10.5 percent, while gross debt is expected to reach 183 percent of GDP in 2021, a level only exceeded by Japan, Sudan, and Greece, according to the release.
“Purposeful denial amid deliberate depression leaves long-term wounds on the economy and society,” said Saroj Kumar Jha, World Bank Mashreq Regional Director.
“After more than two years of the financial crisis, Lebanon has failed to establish, much alone begin on, a meaningful route toward economic and financial recovery,” he added.