As the Lebanese economy shakes, dollar bills and ties are paying off

Ibrahim al-Masri wipes the sweat from his forehead as he lines up behind two dozen other cars in front of a gas station in Beirut. It could take hours to refill his empty tank – but since he has no cash left to bribe the attendant, all he can do is wait.

As Lebanon’s deepening economic crisis results in shortages of basic goods such as fuel, medicine, and even bread, some privileged people are finding ways to skip the lines and facilitate rationing through personal connections or bundles of banknotes.

“I saw other people give the guard 100,000 Lebanese pounds (about $ 5 at market prices) to get in line in front of me,” said Masri, 45, a government official.

“I can’t afford that,†he said, adding that a bribe of this amount would be equivalent to a day’s wage for him.

Even before its economy collapsed, Lebanon had one of the most unequal distributions of wealth in the world. According to the United Nations Economic and Social Commission for West Asia (ESCWA), the richest 10% owned 70% of the country’s personal wealth in 2019.

According to ESCWA, 42% of households in Lebanon at that time suffered from “multidimensional povertyâ€, which means that they were deprived of at least one basic service such as health care, electricity or accommodation.

Two years after the financial crisis broke out, that number has doubled to 82%, the agency said this month.

“Tectonic Shift”

In Beirut and its suburbs, residents said that access to basic goods and services is now increasingly dependent on foreign exchange, personal connections or the knowledge of arriving travelers who can bring the bare essentials.

“It’s a tectonic shift in every facet of life in Lebanon,” said Nasser Yassin, professor at the American University of Beirut and director of the crisis observatory that is tracking the effects of Lebanon’s financial collapse.

The “have” include Lebanese who work for embassies, multinational corporations and international aid organizations, whose foreign exchange income has been protected from the loss of more than 90% of the value of the pound since 2019.

They can still afford to buy groceries, eat out in restaurants, pay for their children’s education and even travel – in contrast to the new “rabbit-less” of the Lebanese middle class, who are paid in pounds.

To avoid frequent blackouts, the privileged hard currency earners can afford to rent apartments in luxurious complexes with guaranteed diesel supply for private generators.

“The shrinking percentage of the population who have access to foreign currency is doing much better now,” said Yassin.

Basic goods are sold in “parallel markets,” he said, so people can avoid long lines for a rationed product if they are willing to pay more.

Some buy black market fuel from plastic containers for many times the official price, while others pay someone else to wait for them in their car at the gas station.

Chadia Akiki, a 48-year-old who lives north of the capital, said some bakeries have started selling “black market bread” for £ 10,000 a bag – more than double the state maximum.

Like Masri at the gas station, she said she couldn’t pay a premium.

“I had to queue behind 20 people at the regular bakery to buy it at the normal price, and they didn’t let me buy more than one bag,” she told the Thomson Reuters Foundation.

While supermarkets in urban areas have experienced a shortage of the staple pita flatbread, more expensive sliced ​​and artisanal breads are still readily available.

“No low point”

But since some goods are harder to find, even cash is not enough.

“Personal contacts work better than money these days,†says Chadi Chahla, an IT officer who lives in northern Lebanon and drives 90 km to his office in Beirut every day.

Family friends and other connections have helped him buy plastic tanks of gasoline on the black market, despite still running out of gas three times on the highway.

Other motorists have managed to refuel their vehicles after friends with links to nearby gas stations warned them that the pumps were about to open.

Since drug stocks are also becoming scarce, contacts are often the only way to get urgently needed supplies.

Hassan, an e-commerce entrepreneur from southern Lebanon who refused to give his full name, said his connections with expatriates had proven to be a lifeline.

“We struggled for six months to find hormonal drugs for my mother, who was recovering from cancer, until we found people from outside Lebanon to bring them,” he said.

Basic initiatives have popped up on Instagram to connect incoming travelers with patients looking for drugs not available in Lebanon – from antidepressants to pain relievers and chemotherapy drugs.

But even though he has failed so far, Hassan said he was preparing for harder times.

“I have neither the privilege nor the connections to have drugs or diesel for the generators or gasoline for my car brought to me on a regular basis,” he said.

“Every time we say it can’t get worse, it does. There is no low point.”