Lebanon: An economy in crisis

If you need local money in Lebanon, it's just a WhatsApp call away. As the country's banking system has collapsed, Lebanon's economy has gone back to cash-only — and finds make-shift solutions to keep cash available. At the centre of all this is a group of men on scooters: Lebanon's "money guys". They exchange foreign currency, which comes in as remittances or through trade, into Lebanese pounds, which they deliver to your door. All you need is a money guy's mobile number. And don't worry! Any Lebanese will be able to share one with you.

What has forced this Eastern Mediterranean country, once known as "the Switzerland of the Middle East" for its flourishing banks, into this situation? Well, one could say it was gambling. For decades, the country's corrupt elite kept the currency's value artificially high. This boosted the economy in the short term, but drained local industry and agriculture. It also made it highly likely the economy would crash in the long term. That happened in 2019.

Ordinary people pay the price

Since then, the Lebanese pound has lost more than 90 per cent of its value (despite what the official exchange rate might be). The money that average Lebanese people had saved in banks is most likely lost forever. For over a year now, regular customers haven't been allowed to withdraw more than the equivalent of a few hundred euros a month from the few ATMs that are left. Meanwhile, inflation for basic goods — including drinking water, bread and electricity — was well over 200 per cent in 2021. Four out of five Lebanese are now living in poverty, while the elites responsible for the crisis benefit from savings abroad. A World Bank report described the crisis in Lebanon as possibly one of the three most severe economic depressions since the 1850s.

Why don't Lebanese people revolt? Oh, they have! When the crash began, over a million people took to the streets, nearly a quarter of the population, to demand that the corrupt leaders step down. The protests were loudest in Tripoli, Lebanon's northernmost and poorest city. But the clique of corrupt leaders protected each other, and then, the pandemic began. "Our youth are now totally consumed by everyday struggles," says Mustafa Shamseen, a social worker in Tripoli.

It's now about survival

To feed their families, most Lebanese people now rely on relatives who live abroad. The money transfers are usually in euros or US dollars. Hence, every few days, people make the call to exchange their foreign cash into Lebanese pounds at the current rate. The money guy will usually arrive on a run-down scooter, pull out an old plastic bag from under the seat and count out the banknotes right there. Even for a small sum, the bundle will likely be thick: Lebanon's highest-denominated banknote is 100,000 pounds. As the currency continues to lose value, the money guys' bags just get heavier.