Lebanon going back into a war economy, and the consequences will be disastrous | Jad Chaaban
▻https://jadchaaban.net/2023/02/17/lebanon-going-back-into-a-war-economy-and-the-consequences-will-be-disas
Yet not all Lebanese have suffered from this crisis. In fact a minority has benefitted from it and continues to thrive on what could be called a new war economy.
The crisis has substantially increased poverty (with the national poverty rate increasing from around 33% in 2019 to more than 80% in 2022) and destroyed traditional income sources. A look at the distribution of households income and its evolution between 2018 and 2021 reveals a significant downward shift: In 2018 57% of households earned more than 1000$ per month, while in 2021 this share was down to only 2%. In parallel, while 18% of households earned below 400$ a month in 2018, their share dramatically increased to 92% in 2021.
Changements spectaculaires des modes de consommation sur les deux dernières années :
hausse des importations de voitures, de viande, de caviar
Lebanon’s shadow economy is flourishing. A war-like economy based mostly on cash transactions where informal and shadow trading mostly governed by the USD currency is thriving.
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All in all, the shadow economy estimates for Lebanon including legal and illegal activities could easily reach 50% of GDP. This would amount today to an estimated total of around 10 billion dollars annually. For comparison, the government’s annual revenues are now worth just $0.5 billion, twenty times less.