Lebanon’s energy crisis has led to 24-hour blackouts, food poisoning and business shutdowns

Anti-government protesters hoist the national flag in front of Lebanon’s central bank in the capital, Beirut, during a protest against the deteriorating economic situation, as they block roads.

Joseph ID AFP | Getty Images

Lebanon suffers a total power outage during the weekend, leaving millions of millions of people without power for 24 hours a day.

The state power company said in a statement that the shutdown of the country’s two main power plants due to energy shortages “has directly affected the stability of the power network and as a result it has been completely shut down, with no prospect of resumption.” . “

Electricity returned late Sunday night after the central bank gave a 100 100 million credit to the energy ministry to buy fuel and keep its factories running. Officials warned that the disruption could last several days.

This crisis is creating two night dreams for the people of the country, but it has taken a long time to create.

Gas shortages may seem familiar – the UK and the rest of Europe are in the midst of an energy crisis that has triggered panic buying and erratic behavior among many who have never imagined they would face such a shortage.

But for Lebanon, the same problem has become a reality over the months – another war on a long list of crises that has left the country relying on multiple daily power outages, a banking and economic crisis, a food crisis, overwhelmed hospitals, and a spiral of volatile black market exchange rates.

Walking through the capital Beirut-once a prosperous city often referred to as “Paris of the Middle East” যেক at any time of the day, one can shop or work in the dark, lucky enough to use a generator to turn on the lights depending on the backup. When the power goes out, many shopkeepers will refuse to sell anything other than water, because the volatile change in the price of the Lebanese lira every minute means that commodity prices may fluctuate from time to time.

And hundreds of businesses that were destroyed in the devastating port of Beirut in August 2020 are permanently gone. With a little help from the state, waste bars and other businesses have fixtures on the streets across the open and dilapidated inner city, including their entrances.

“It’s catastrophic,” Rabih Dau, owner of a small grocery store in Beirut’s Gitavi district, told CNBC from his shop in late September that many of the country’s daily power outages have gone dark. He pointed to the shelf of the empty refrigerator, where only a small fridge was running, containing a few dairy products.

“We can’t buy a lot. We can’t buy cheese and ham, we have to buy small pieces, because we don’t always have electricity and people are always scared.”

Rabih Dao, a shop owner in Beirut’s Gitaui district, stands on his generator, the only source of electricity during daily power outages across Lebanon. The country’s energy crisis has made it difficult to use fuel to run generators. Beirut, Lebanon, September 24, 2021

Natasha Turak | CNBC

Less talked about the consequences of Lebanon’s energy and power crisis, there has been widespread food poisoning, as grocery stores, restaurants and families struggle to keep products fresh amid power outages and summer heat. Most of Beirut had no electricity at night since the beginning of summer. Consumption of meat and dairy has declined dramatically, residents say.

“They don’t want to buy ham and cheese and yogurt, because they’re afraid the food won’t be good if we don’t have electricity,” Dau said.

How did Lebanon reach this stage?

Decades of corruption in Lebanon’s 1975-1990 civil war have destroyed decades of financial and public services.

For years, Lebanon had daily managed power outages due to massive mismanagement in its power sector. But the Lebanese people were accustomed to it; Those who can carry generators continue to use them to carry electricity, which includes many businesses in the country, and the divisions are usually predictable and not long lasting.

However, since the start of the nationwide energy crisis in early summer, even backup generators – which run on fuel – have not always been able to recover. Many residents cannot use their cars, and for gas stations some lines stretch for miles, sometimes drivers leave their cars and get into fights.

A gas station destroyed in the Beirut port explosion in August 2020 has not been repaired for more than a year. Beirut, Lebanon, September 17, 2021.

Natasha Turak | CNBC

Lebanon imports more than 80% of its food and products, such as fuel. The smuggling of fuel into Syria by militant and political groups Hezbollah and the stockpiling of fuel by other groups and traders on the black market have helped the country increase supply and prices.

And Lebanon’s central bank is now restricting subsidized fuel imports as it moves beyond the dollar, which it used to denote its economy. The central bank is working slowly to extend the line of credit to fuel importers and gas stations and has now stopped subsidizing diesel.

For Lebanon’s population of one million, it has made the product ineligible for many – of which%% have fallen into poverty over the past two years, according to the World Bank, in the sharp despair of modern times.

Lebanon’s central bank did not respond to a CNBC request for comment.

Crashing currency

The official exchange rate of the Lebanese lira has been set at 1,500 lira per dollar since the 1980s. However, the actual rate at which cash is exchanged on the black market fluctuated between 13,000 and 18,000 lira per dollar in September. It is currently trading around, 19,250.

Marwan Sweden runs a popular ice cream shop called Smushkis in Beirut’s Mar Mikhail district. He says he is lucky to be able to carry fuel for his own generator, without which it is impossible to keep his products cool and keep the business open. But he needs dollars to do that.

“You can buy diesel without subsidies, but you have to pay in dollars,” he said. “It’s like 600 600 a ton; the cost has gone up a lot, and there are a lot of new costs that have just come up for electricity, which has made it a lot harder.” This is the first time the Lebanese government has priced a product in dollars.

Antonella Hodge Nicholas, a physics student, spends hours in the smoshkis just for electricity. “We have no electricity in our house since last night, the generator does not work. This place has electricity and WiFi, so I have come to read for my test for a few days,” he told CNBC. For perishable food, his family cannot store it in their home.

“We don’t have food in the fridge because we don’t want to be poisoned … we buy our food every day, on the spot,” he said.

Savings deleted

Lebanon has one of the highest debt-to-GDP ratios in the world.

Since the start of its financial crisis two years ago, when the country is left with a default ইউরো 1 billion eurobond at its huge debt level-Lebanon’s economy has been in a fast-paced free collapse. Governments and institutions that have pledged to help the country are still holding back because of a lack of confidence in the government’s ability to reform and curb corruption, and Western officials have expressed concern about instability or the break-up of the country. Numerous armed political and militant groups.

Massive protests began in Lebanon in October 2019 as the currency depreciated, eventually losing 90% of its value. Lebanese depositors have been locked out of their foreign currency accounts, and those who have placed their deposits in lira have seen their life savings wasted.

Dedu El Hayek, the grandmother who once ran a busy breakfast shop in a residential area of ​​Beirut, now spends her days sitting alone at the shop’s dark entrance, occasionally chatting with neighbors. Since he could not carry fuel to run the generator, he had to close his business, and now sleeps on a bed in the storage room at the back of the store.

“I don’t have enough money to run the generator. I haven’t worked since three months ago,” he said, pointing to the empty shelf. “No one else comes here.”

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