Beyond Repair? Lebanon’s Collapsing Financial System

Political instability, rampant corruption, record-level inflation, and a staggering rise in the cost of living. Lebanon’s economic crisis has plunged the country into a state of unprecedented turmoil

Lebanon’s economic crisis has reached unparalleled levels of severity. The country’s economy has collapsed, and the Lebanese pound has fallen to a record low of 100,000 to the US dollar. A crisis that has been further exacerbated by the COVID-19 pandemic, has led to widespread job losses,  an unemployment rate of 29.6%, and a collapse in tourism.

High unemployment, devaluation of the local currency, skyrocketing inflation, and the removal of subsidies on medicine and fuel have made it increasingly difficult for many people to meet their basic needs. A survey conducted by ASDA’A BCW for Arab Youth found that more than 77% of Lebanese youth have considered or are actively trying to leave their country.The brain drain of skilled workers from Lebanon has further exacerbated the economic crisis with the Lebanese diaspora numbering around 15.4 million, whereas internal population of the country stands at 6 million.

Food insecurity in Lebanon

Human Rights Watch published a report highlighting the severe poverty and food insecurity experienced by the Lebanese people. A combination of factors such as political instability, economic decline, and a rise in the cost of living has  led to the ongoing economic turmoil. The government’s response has been inadequate in ensuring that all citizens have access to a decent standard of living, including the basic need of food. The current social protection system in Lebanon is fragmented, leaving many workers, children, and the elderly without any form of protection, further exacerbating existing social and economic disparities.

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Brain drain in Lebanon has led to a major loss of human capital, and has affected social cohesion and stability. Many of the most skilled and educated individuals leave Lebanon to other countries, such as France, which 26% of Lebanese people cite as their preferred destination, and Canada, which 29% of Lebanese people cite as their preferred destination, hindering the country’s growth and development. The collapse of Lebanon’s economy and deep political uncertainty combined with hyperinflation, worsening shortages in food supplies, fuel, medicine and electricity, have led many of the skilled individuals to emigration.

An estimated 1,000 medical and health service workers have left since the Beirut port explosion in August 2020, creating a resource crisis in hospitals and clinics during and after pandemic throughout Lebanon.

According to the 2019 Arab Barometer report, young, well-educated and male citizens across the Middle East and North Africa (MENA) are most likely to want to leave their country. This brain drain costs countries in the MENA up to $1.5 billion annually. As a result of this continuing wave of mass migration, the World Bank has warned that Lebanon is suffering from a serious reduction of human capital, with permanent economic damage that will be difficult to recover from.


Arab Youth Survey, Al Jazeera, Human Rights Watch, Arab Barometer, Arab News.

Dawid Mliczek


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