Im. Back out on the story or tester is alive and on target government and financial buildings are angry at the failure of their leaders to deal with unprecedented hardships as the country slips further into crisis what can be done and what will the fallout both at home and for the region this is inside story. Hello welcome to the program im Richelle Carey struggling to make ends meet and begging for food lebanese people have defied restrictions to contain cobra 1000 and resume their protests rallies started in october but run erupted by the lock down violence escalated on tuesday banks were set on fire and Security Forces pelted with stones one demonstrator was killed and dozens were wounded and riots are testers are angry at the political elite thats been in power for so long and accuse their leaders of corruption and mismanagement lebanon is suffering its worst economic crisis in decades food prices are soaring in the lebanese pound is in freefall the countrys appeal for assistance from the International Monetary fund sent to her reports in the capital beirut. The state is close to bankruptcy this country spends more than it earns theres a huge step in for the 1st time in lebanon to st it defaulted on the debts now that there was a leaked document which really caused the rise because the government looked at the thinking of touching peoples deposits in the banks and of course there are informal capital controls now you cannot access your savings in the banks that they were going to touch these the closets to fund the states there was an outcry even politicians raised the concerns because the Prime Minister said 2 percent of the deposits will be will be touched and those 2 percent are the Bank Accounts of politicians and their cronies accounts in the millions and billions of dollars so this doesnt seem to be an option a few weeks ago the Prime Minister and the president they invited the International Support group for lebanon ambassadors from western nations arab nations and they appealed for Financial Assistance they told them please unlock the funds billions of dollars in aid that you promised us in the past and the answer really hows been we are not being aid and were not bailing lebanon out unless there are structural an Economic Reforms politicians are reluctant to do that because if you do that they lose control of other states resources which theyve been accused of using for political gain so the only option seems to be going to the International Monetary fund and again politicians are reluctant to do that for 2 reasons 1st of all the austerity measures will hurt the poor and the austerity measures will hurt the politicians have a look at how bad the Economic Situation is lebanese people have been struggling to get their own money from banks after capital controls were imposed last year they fear their savings will be wiped out as the lebanese pound has lost 3 times its value on the black market banks have stopped giving Short Term Loans to businesses and no longer provide them with dollars for imports inflation has increased by 50 percent since the start of the year and 45 percent of the population lives below the poverty line and that projects lebanons economic slowdown will be the regions worst this year its Gross Domestic Product is expected to fall 12 percent. A new government was formed in january it has criticized the governor of the central bank for his handling of the crisis has defended his organizations policies and hes supported by the opposition and the lebanese are calling on the government to resign so. The dollar is now worth 4200. 00 lebanese pounds everything has become more expensive food has grown more expensive all of the prices have risen and we cant even buy food or bread we cant afford anything but if you. Were duly workers if we work we eat we dont work we dont eat may god change the situation for the better when he ought to look to. The economic collapse of the lebanese pound will normally lead to this people have lost their purchasing power and the state has no plan to do anything banks are closed not giving money i think the government should resign and leave. Lets get the thoughts now of our guests they are all in beirut Patrick Martini hes the president of the lebanese institute for market study abraham and im not as a Civil Society activists and jamil watt hes a lecturer in politics at the American University of beirut thank you all for joining me for this conversation before we talk policy lets just talk about what it feels like right now in lebanon and you all are in beirut some a start with you patrick what does it feel like right now. So people lost their jobs because of the bad economy Situation Companies have been closing down they also lost their income and the purchasing power of their money those who had some savings at the bank either those savings were in lebanese pounds and now they can buy them much less because of the short devaluation of the pound or it was in dollar and now they can not with throw it in the other they are forced to is draw them in lebanese pounds at it evaluate i mean at a rate that is not the real actual market rate making them lose for their money on them so people simultaneously lost their income their jobs the purchasing power of their income and their savings they are mad they think that they were robbed they please their money at the bank the bank lending the money to the government the government wasted it and now we are telling them you want to be paid back so thats the general sentiment yet how your thoughts on how well talk policy but just how would you characterize how people feel matt patrick says theyre just mad yes absolutely they are and whats even worse i think and adds to the problem is that they have lost all the trust in the all the put on the establishment of the state institutions and all the political establishment and this i think puts matter into a worse kind of that action where they dont see any hope of change because they believe that the Political Parties have been. Who has been robbing the country of the resources are still in power and there is no serious initiative in the direction of making serious reforms or any kind of intervention that can really shed some light at the end of the tunnel with the deliberate his people to find this. This kind of. Clinching to power from the political establishment. Really the major problem here is that and theyre using all the tools they can to remain in power and thus they are depriving that at least the lebanese people from. A way to salvage the country from its imminent collapse jamail what about that sir patrick says that theyre angry abraham says there is also mistrust how would you describe the feeling in beirut right now. And actually i wouldnt say that everyone and pretty sure for Different Reasons and that is definitely an attempt to spin off series to see in lebanon the Lebanese Society and at this specific moment in limbo so no one knows exactly where were heading to for some people not anything but this anger is not to be able to trust on the streets and that is a lot of uncertainty and knocking on my pubes whole order to have ordered the exhaust the whole some people are already questioning and the so were going to show this to the notion has achieved so and this is generally legacy of course. That is no longer and get to the sinking boat and no one seems to be in control and this is that leadership and the way. That it seems is adopting an order to and to govern and that are not multiple matins on why we have a crisis in lebanon and these matters are not one but not concentrated in one narrative and were not going to each his own attitude of the central bank has been on that and the government has its own negative ok thanks the United States so this is a recent uncertainty. And its you know betty having to live in these i. T. That the struggle is being and if its your lives we saw that in one moment or toward it was kind of a collective action and now this struggle is being individualized because every individual every scout family is fighting for its own so im going to ok lets talk about this you talked about the basically that everyone has theres a different narrative lets talk about the government narrative and im gonna come back to you on that patrick so people wanted a new government they kind of shuffle the deck theres theres other people but is there really a new government as you see it patrick. So the new government adopted most of the plans of the past governments which actually were inspired from the i. M. F. Recommendations i see the policy is continuing in the law in the in the same direction as before government spends a lot of money on government monopolies specifically electricity electricity is responsible of roughly 50 percent of the huge debt that lebanon has why do you like that 10750 percent why is that. Because because an extra state is subsidized in lebannon and even today despite the very low oil prices the subsidy remains and the Electricity Company continue to lose money and the ministry of energy and finest never had the courage to switched for it to switch from and from a fixed price to an indexed price where it might go up with the oil prices and go down with the oil prices so thats a big chunk of it the other chunk is that Huge Investment have been made in the Electricity Sector we import electricity through power barges from turkey it cost us a lot of money weve also tried to build some electricity factories and those all those massive project cost billions of dollars and the final result is simply we still dont have electricity we only have 12 hours of electricity per day and all the past investment have been a huge failure leading to half of the current debt without actually an actress if this is all due to the government monopoly the government mismanagement of the sector the government does not let anybody come in produce electricity more efficiently they want to do with themselves and they can do it they lose a lot on the sec Patrick Holland i can tell that jamail had a right to Say Something to it and what youre saying about the electricity and the situation there. Yeah i mean of course going back to arson and yes we have a new government it doesnt mean that the government is doing that i saying or approaching politics differently or trust structurally properly and structural problems between b. P. To be fan we cannot just yet the government because and 100 days were going to see markets and cannot produce words that arent these are more structures and the problem unless were not just having you know are connected to the factory and so you and we are surprised that the Prime Minister has a new discourse yes he has a new discourse whereby his reviving the idea of the state and his speeches which is something we havent seen and necessarily before but the problem is that there is this kind of didnt see between what his preaching as a Prime Minister and to practice then the Prime Minister and the government they did not take on the one decision that it did because you know the economy situation that can keep the you know on the margins youve seen that they have no 12 are older than creation they have no control over the Banking Sector they have no control over whatsoever you know exactly when its the little mafia so what responsibility does he have the responsibility that he does have is to come up with this force not on the active or which to the Financial Connections the government should have been in even who is responsible for this economy and carmencita maps they should have us up when it comes to the political economy and not only the financial aspect of the crisis who is responsible in ok. I dont accept relation to mock we havent seen this discourse and so it very much id be id be curious on your inner thoughts on this i mean what there are there is a new Prime Minister there is a new leadership but i mean how hopeful are you hopeful about what he can do. Work to be honest i dont think the issue is here is my i mean the Economic Policy or whether theyre just you or any of those of course this is the result of the kind of policies that have been conducted by the establishment by the political establishment the same study shipment that brought this government into power and i believe that this is not really a new government it might be in terms of of the persons at charge or but i think its still tied in to the political establishment and the Political Parties all voted for for confidence for this government in the 1st place and like your guest were saying there has not been a single initiative. From this government serious want to do you deal with the problems we have been hearing a lot of talk and a lot of promises and working on plans etc but nothing nothing serious on the ground. I think that im not having very much hopes because the interests of the political establishment and into this government are very much constraining its its movability theyre not able to read it to work. To dissolve or cut to come out of the lebanese people with with transparency talk them about the situation are long bringing back some and if any of the comp any confidence into them so it may behave and as a result that their protests are not going anywhere i mean that they took a break because of a pandemic because they had to and now theyre right back out there or theyre not going anywhere at some point will it not have to be more than just shuffling the deck and who can actually make that happen i mean we all know that theres always been outside forces that have played a role in the in the internal dealings of lebanon where are those people now. Well basically i think the people are after a coronavirus. And then nic they have been because of the lockdown they have been on at Home Building really just so angered because of this uncertainty and the kind of how they say this the government is sort of a cripple you know and people are trying to give it a chance but it seems that theyre not going to get anywhere and i think the protests that have come. In the gradually coming into the streets and building up now are the result of people having no no a light at the end of the tunnel so do you see whats happening in tripoli and beirut and the un and cider and other parts of the country people are just going down to the street because they believe that this government all the whole of the establishment i think does not really have any solutions to the problem whatsoever that there are certain things like throwing a back and forth the responsibility on each other and today we saw a press conference with the governor of the central bank bloodying to press conference conducted earlier by the Prime Minister accusing each other of and you know this this game really doesnt really solve the problem and people are sick and tired of this kind of start they want to really have serious interventions ok so much let me tell you coming out let me pivot to patrick for a 2nd there patrick where where is the a were is the bailout when lebanon has been a precarious situations before theres always been somebody there to kind of step in and help be it saudi arabia or iran has a head in this where where is the aid why is no one doing this right now. I think that the International Community and even our neighborhood the countries in the region lost confidence in the honesty and integrity of the lebanese Economic System they feel that they wasted a lot of money on this country and this money has been spent on on bad project with no real no real. Added value to the population right so everybody is saying guys you need to reform food we need to be sure that the money that we give you either through the i. M. F. Or through the cedar you know the International Donor community will be spent in a good way and wont be wasted like before and thats why the current government has designed a plan they published it and they made it available for everybody now the problem with this specific plan is that it aims at increasing taxes they think that they can reduce government deficit by increasing taxes now increasing taxes in every session theyre repeating it is a cut thats why its a suicide you cannot expect higher income from taxation if you increase taxes during a recession right and especially that if you plan to pay out or to waste the money of the taxes you might raise on elektras city Water Telecom right so if we remain in the past system where we want to waste the money whether that whether the money that we get from taxes or the money that we get from the nation on the same failed project as before well nobody would let me let me ask you something when when you say failed projects lets just be honest you think al projects because of poor Decision Making or because of corrupted Decision Making. If you look at lebanon on the ranking in the world of the. On the doing business not the doing business in the next what do you call it i forget the no name anyway lebanon the ranks very poorly on government Decision Making on bribes on cronyism in the granting of public contracts and all those decisions are channeled through government owned monopolies like electricity water and telecom right thats where the lebanese government waste the money and