A long war will damage Lebanon economy to ‘point of no return’, says Lebanese economy minister

We spoke to Amin Salam, Lebanese Economy and Trade Minister.

Krishnan Guru-Murthy: The economy was already in such trouble. What is the impact of this war?

Amin Salam: Definitely the impact of the war on the economy is devastating. Everybody knows very well that prior to the beginning of this war, Lebanon was already struggling for almost three years with the collapse and the economy, loss of the value of the Lebanese national currency, unemployment, social issues. I mean, the country has been struggling for a while, way before the war. The war came to add another layer of challenge to Lebanon. Now we’re talking about over a million displaced people and not to mention the million and a half million, or 700,000 Syrian refugees, that are still in Lebanon. All that has really piled up to turn this nation into crisis mode.

Today, the GDP is in terrible shape because hundreds of thousands of people lost employment over the past year. Most of them are youth, working power in the south and the agricultural sector in major industries in the Bekaa Valley in the south and parts of Beirut. So let that alone. We’re not talking yet about losing entirely the tourism season, which was a very major, major, major economic support to Lebanon in the past three years, given that it was one of the few remaining sectors pumping cash into the economy. So now we’re not talking anymore about growth. We’re not talking about GDP getting better. We’re talking about a big emergency cost on Lebanon that is going to last, and we don’t see the end of it yet.

Krishnan Guru-Murthy: So many people, as you say, are displaced, they’re not working. They have no income. At what point are people going to start running out of money to eat?

Amin Salam: The good thing is that the government had in place, I mean, given the fact that we’ve been functioning in emergency mode for many years before the war started. So thank God we are good on the food security level, on the medical aid level. That’s how we’re keeping the people surviving now. But the biggest challenge now is if we don’t reach an immediate, and I say immediate, ceasefire with serious talks for peace, this war is pending for longer or expanding further will get Lebanon into a very critical place that will get the economy to a point of no return. That is where people will begin really facing serious challenges, having income, having cash. They will probably be spending everything they have left in the next few months if they are living in the streets and are having no jobs.

Krishnan Guru-Murthy: But when you talk about ceasefire, the Lebanese army was drawn into the war today, returning fire against Israeli troops in the south. And you have lost soldiers to that war already. You’re being drawn in, aren’t you?

Amin Salam: I said a few days ago. It’s a full-fledged war against Lebanon. I mean, the Israeli side is saying that we’re targeting Hezbollah., we’re not targeting Lebanon, we’re not fighting the Lebanese people, while they’re bombing the city. I’m talking to you now from less than a mile away from where the explosions had happened last night. And that is even two miles less from the governmental palace. So drawing the Lebanese army in is very dangerous, is very critical. Expansion of that might take us to somewhere where we don’t want to go as a nation.

Krishnan Guru-Murthy: But when you talk about ceasefire, isn’t the fact that Hezbollah has said they are not prepared to cease fire without a ceasefire in Gaza?

Amin Salam: The government’s message today was very clear – from our prime minister, minister of foreign affairs, after their meeting as well with the speaker of the house, President Berri – that the entire government, with all its political parties, Hezbollah included, are in favour of a ceasefire. But the Israeli side is not helping with that because the Israeli side is not showing any intention of ceasefire, any flexibility. It’s just a continuous attack on Lebanon and on the people of Lebanon.