World Bank: Lebanon’s crisis among world’s worst since 1850s

Jun 1, 2021, 4:20 AM | Updated: 7:17 am
FILE - In this Monday, March 22, 2021, file photo, a man rides his bicycle past garbage containers ...

FILE - In this Monday, March 22, 2021, file photo, a man rides his bicycle past garbage containers set on fire by protesters blocking a main road in front the Lebanese Central Bank building, background, in Beirut, Lebanon. The World Bank said in a report released on Tuesday, June 1 that Lebanon's severe economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years. (AP Photo/Hussein Malla, File)

(AP Photo/Hussein Malla, File)

BEIRUT (AP) — Lebanon’s severe economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years, the World Bank said in a report released Tuesday.

The World Bank said that since late 2019, Lebanon has been facing compounded challenges, including its largest peace-time economic and financial crisis, the spread of coronavirus and a massive blast at Beirut’s port last year that is considered as one of the largest non-nuclear explosions in history.

The crisis has worsened in recent months amid a paralyzing power struggle between the president and prime minister-designate that has delayed the formation of a new government, The Cabinet of outgoing Prime Minister Hassan Diab resigned days after the Aug. 4 blast, and the country has been without a fully functioning government since. The explosion in the Port of Beirut killed 211 people, wounded more than 6,000 and damaged entire neighborhoods.

In the face of these colossal challenges, continuous policy inaction and the absence of a fully functioning government threaten already dire socio-economic conditions and a fragile social peace with no clear turning point in the horizon, the World Bank report said.

“The economic and financial crisis is likely to rank in the top 10, possibly top 3, most severe crises episodes globally since the mid-nineteenth century,” it added.

The report said the country’s gross domestic product is projected to contract 9.5% in 2021, after shrinking by 20.3% in 2020 and 6.7% the year before. Lebanon’s gross domestic product plummeted from close to $55 billion in 2018 to an estimated $33 billion in 2020, while GDP per capita fell by around 40% in dollar terms, the report said.

“Such a brutal contraction is usually associated with conflicts or wars,” the World Bank said.

The report was released two days before the World Bank’s vice president for the Middle East and North Africa, Ferid Belhaj, and Merza Hussain Hasan, its executive director, were set to arrive in Lebanon to meet with Lebanese officials and urge them to address the crisis “with urgency,” a World Bank spokeswoman said.

For decades, Lebanon has been dominated by the same political elites, many of them former warlords and militia commanders from the civil war. Corruption has been widespread over the past decades, brining the tiny country to near bankruptcy.

In March 2020, Lebanon defaulted on paying back its debt for the first time in its history as the local currency lost more than 85% of its value. Tens of thousands have lost their jobs while many others left the country seeking opportunities abroad. Nearly half the country’s 5 million people live in poverty.

“Lebanon faces a dangerous depletion of resources, including human capital, and high skilled labor is increasingly likely to take up potential opportunities abroad, constituting a permanent social and economic loss for the country,” said Saroj Kumar Jha, the World Bank regional director.

“Only a reform-minded government, which embarks upon a credible path toward economic and financial recovery” can reverse further sinking of Lebanon, he said.

In recent weeks, with foreign currency reserves dwindling at the central bank, Lebanon has been witnessing severe shortage in medicines as well as fuel, with people having to wait in line at gas stations to fill their cars. Electricity cuts last more than 12 hours a day.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

FILE - In this July 23, 2020, file photo, a homeless woman drinks water from a garbage dumpster in Beirut, Lebanon. The World Bank said in a report released on Tuesday, June 1, 2021, that Lebanon's severe economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years. (AP Photo/Hassan Ammar, File) FILE - In this Monday, March 22, 2021, file photo, a man rides his bicycle past garbage containers set on fire by protesters blocking a main road in front the Lebanese Central Bank building, background, in Beirut, Lebanon. The World Bank said in a report released on Tuesday, June 1 that Lebanon's severe economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years. (AP Photo/Hussein Malla, File)

AP

Elon Musk leave the Phillip Burton Federal Building and United States Court House in San Francisco,...
Associated Press

Elon Musk’s Tesla tweet trial delves into investor damages

SAN FRANCISCO (AP) — An Elon Musk tweet declaring he had the financing to take Tesla private in 2018 caused billions of dollars in investor damages after the deal collapsed, according to estimates presented Tuesday at a trial examining the haphazard handling of the buyout proposal. The mind-bending estimates laid out by two experts hired […]
17 hours ago
Associated Press

Reports say 2022 was good for Nevada casinos, Vegas tourism

LAS VEGAS (AP) — The year 2022 was good for gambling and tourism in Nevada, where winnings at casinos statewide set calendar year records and Las Vegas visitor tallies nearly reached levels before the coronavirus pandemic. “Las Vegas enjoyed a robust recovery trajectory across core tourism indicators in 2022,” the regional Convention and Visitors Authority […]
17 hours ago
Elliot Morehead, 16 of Sioux Falls, tells a House Health and Human Services committee Tuesday, Jan....
Associated Press

S. Dakota lawmakers push bill to bar transgender youth care

PIERRE, S.D. (AP) — A state House committee voted Tuesday to advance a bill that would ban gender-affirming care for transgender youth in South Dakota. Supporters argued a bill barring youth from accessing puberty blockers, hormones and surgery would protect adolescents from irreversible damage, while opponents argued it only blocks them from becoming their authentic […]
17 hours ago
FILE - Dozens of tribe members and other protesters beating drums and waving signs rally in front o...
Associated Press

GM conditionally OKs $650M Nevada lithium mine investment

RENO, Nev. (AP) — General Motors Co. has conditionally agreed to invest $650 million in Lithium Americas Corp. in a deal that will give GM exclusive access to the first phase of a mine planned near the Nevada-Oregon line with the largest known source of lithium in the U.S. The equity investment the companies announced […]
17 hours ago
FILE - Travelers wade through the line to drop off bags at the Southwest Airlines check-in counter ...
Associated Press

Lawmakers aim to raise penalties for US airline disruptions

Senators who want to impose tougher penalties when U.S. airlines strand or delay passengers say they finally might be able to turn their ideas into law because of outrage over debacles like the one at Southwest Airlines in December. Democrats Richard Blumenthal of Connecticut and Edward Markey of Massachusetts said Tuesday they will again offer […]
17 hours ago
FILE - President Joe Biden, right, at the top of a meeting with congressional leaders to discuss le...
Associated Press

Biden, McCarthy, once breakfast mates, wrangle over US debt

WASHINGTON (AP) — Not so long ago, Joe Biden and Republican leader Kevin McCarthy used to talk things over at breakfast in Biden’s vice presidential home at the Naval Observatory. Biden was intent in those days on “keeping up relations with the opposition party,” as he writes in his memoir, and the new House majority […]
17 hours ago

Sponsored Articles

(Pexels Photo)...

Sports gambling can be fun for adults, but it’s a dangerous game for children

While adults may find that sports gambling is a way to enhance the experience with more than just fandom on the line, it can be a dangerous proposition if children get involved in the activity.
...
Fiesta Bowl Foundation

Celebrate 50 years of Vrbo Fiesta Bowl Parade magic!

Since its first production in the early 1970s, the Vrbo Fiesta Bowl Parade presented by Lerner & Rowe has been a staple of Valley traditions, bringing family fun and excitement to downtown Phoenix.
...
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
World Bank: Lebanon’s crisis among world’s worst since 1850s