Maduro on the Mediterranean

Lebanon is rapidly sliding into a Venezuelan scenario. The eruption of spontaneous protests that have been prompted by a simmering public anger were looming on the horizon since the middle of 2018, if not much earlier. The reason is simple: a kleptomaniac ruling class protected by an Iranian militia are hardly a good recipe for investments and prosperity.
Current legitimate anger at the deteriorating economic conditions has been at the genesis of the latest street outrage. A ballooning c.$100 bln public debt, a world-record deficit, a c.40% unemployment level, a decades-long malfunctioning power grid and public services, and the lack of any glimmer of hope for an entire nation after almost 15 years of a fiercely fought civil war and another 15 of a fake after war truce, have finally come to fruition.
The current scenario is presently caused by the lack of ‘tricks’ & ‘treats’ that an isolated, coffers-depleted government can no more offer to the unemployed, and over-frustrated masses. Panem et Circenses no more!.
Between the late 1990s and 2005 the so-called postwar miracle of Lebanon was nothing, but an open reconstruction site dominated by newly moneyed Oligarchs and carpetbaggers who were protected by Syria with the acquiesce of the Arab League, and the complicit approval of the Western world. Still, as long as crumbs and leftovers were trickling down to the middle and lower classes via handouts, corruption and a racket in public contracts, the average Lebanese was forgiving of its blood-sucking ruling elite.
Today, the ruling elite’s practices have not changed but the economic landscape has been transformed beyond recognition, and way above the intellectual grasp of its local politicos. The ruling junta has continued to deplete the coffers of the government through corruption and State largess while begging the Arab world and the European powers particularly, France, to continue to support its decaying economic model with inflated debts and donations. Add to that, the Lebanese Diaspora which was sending annual remittances at the tune of c. $7 bln per annum. These were deposited in Lebanese banks, who in turn ‘invested’ them in TBs at phenomenal rates. The Ponzi scheme was perfect. The government secured its budget and, through it, the allotment of each sect and factions. The banks made more money than their Wall Street peers, and depositors, yes depositors, were happy to live off the interest income, fueled by this artificial scheme of ‘sovereign’ debt which held the crumbing edifice. This edifice can hold a little more, but we reckon, not too long.
Iran and Syria, both isolated by the international banking system, have been foraging Lebanon’s market for US banknotes. Lebanon’s lack of serious reforms has rendered the European lenders more suspicious and demanding of real changes and guarantees. The drastic drop in oil prices and the cold War between the unofficial Lebanon (Hezbollah) and the official Arab regimes have brought down donations and remittances from the Gulf to abysmal levels. The Central Bank has pulled the last ‘rabbit’ from its magical hat by luring millions of deposits at junk bond rates to plug the holes of a sinking vessel. Notwithstanding, the government ignored all these regional and international developments and kept on ploughing its way through the carcass of a depleted State and the emptied pockets of its population.
Unfortunately, like in Venezuela, (or in HK) this government will survive the latest pristine outburst in popular anger. The ruling military militia and the official armed forces will jointly hold the glue of this degraded Sphinx despite popular demands to the contrary. None of the political parties will jump ship, not because of any other reason except their survival instinct. A locked zoo is better than an open field for large mammals used to being hand fed. Staying in the government is safer, and till recently, more lucrative than being on the outside.

Lebanon is rapidly sliding into a Venezuelan scenario. The eruption of spontaneous protests that have been prompted by a simmering public anger were looming on the horizon since the middle of 2018, if not much earlier. The reason is simple: a kleptomaniac ruling class protected by an Iranian militia are hardly a good recipe for investments and prosperity.

Current legitimate anger at the deteriorating economic conditions has been at the genesis of the latest street outrage. A ballooning c.$100 bln public debt, a world-record deficit, a c.40% unemployment level, a decades-long malfunctioning power grid and public services, and the lack of any glimmer of hope for an entire nation after almost 15 years of a fiercely fought civil war and another 15 of a fake after war truce, have finally come to fruition.

The current scenario is presently caused by the lack of ‘tricks’ & ‘treats’ that an isolated, coffers-depleted government can no more offer to the unemployed, and over-frustrated masses. Panem et Circenses no more!.

Between the late 1990s and 2005 the so-called postwar miracle of Lebanon was nothing, but an open reconstruction site dominated by newly moneyed Oligarchs and carpetbaggers who were protected by Syria with the acquiesce of the Arab League, and the complicit approval of the Western world. Still, as long as crumbs and leftovers were trickling down to the middle and lower classes via handouts, corruption and a racket in public contracts, the average Lebanese was forgiving of its blood-sucking ruling elite.

Today, the ruling elite’s practices have not changed but the economic landscape has been transformed beyond recognition, and way above the intellectual grasp of its local politicos. The ruling junta has continued to deplete the coffers of the government through corruption and State largess while begging the Arab world and the European powers particularly, France, to continue to support its decaying economic model with inflated debts and donations. Add to that, the Lebanese Diaspora which was sending annual remittances at the tune of c. $7 bln per annum. These were deposited in Lebanese banks, who in turn ‘invested’ them in TBs at phenomenal rates. The Ponzi scheme was perfect. The government secured its budget and, through it, the allotment of each sect and factions. The banks made more money than their Wall Street peers, and depositors, yes depositors, were happy to live off the interest income, fueled by this artificial scheme of ‘sovereign’ debt which held the crumbing edifice. This edifice can hold a little more, but we reckon, not too long.

Iran and Syria, both isolated by the international banking system, have been foraging Lebanon’s market for US banknotes. Lebanon’s lack of serious reforms has rendered the European lenders more suspicious and demanding of real changes and guarantees. The drastic drop in oil prices and the cold War between the unofficial Lebanon (Hezbollah) and the official Arab regimes have brought down donations and remittances from the Gulf to abysmal levels. The Central Bank has pulled the last ‘rabbit’ from its magical hat by luring millions of deposits at junk bond rates to plug the holes of a sinking vessel. Notwithstanding, the government ignored all these regional and international developments and kept on ploughing its way through the carcass of a depleted State and the emptied pockets of its population.

Unfortunately, like in Venezuela, (or in HK) this government will survive the latest pristine outburst in popular anger. The ruling military militia and the official armed forces will jointly hold the glue of this degraded Sphinx despite popular demands to the contrary. None of the political parties will jump ship, not because of any other reason except their survival instinct. A locked zoo is better than an open field for large mammals used to being hand fed. Staying in the government is safer, and till recently, more lucrative than being on the outside.

The answer is for this popular movement to take the form of civil disobedience. Doctors, lawyers, teachers, pilots, bankers, bakers, carpenters, cab drivers, students and all elements of society should strike. Then, they should refuse to pay taxes. Then they should vote a shadow government. Then they should lobby the world to hear their voices. Then if nothing else, they should still continue their civil, peaceful disobedience till the government crumbles and their voices heard through new free elections under the supervision of international observers.

Even if one, only one, person agrees with this recipe of civil disobedience it would be a momentous start.  Henry David Thoreau said: “Any man more right than his neighbors constitutes a majority of one already.”