The World Bank and the Vatican are criticizing Lebanon’s rulers for plundering the country’s resources and abusing their positions of power. The World Bank recently reported that government revenues in Lebanon have collapsed by almost 50%, registering less than a 7% share of the country’s GDP in 2021—one of the lowest ratios in the world after Somalia and Yemen. While a visiting Vatican envoy tells Lebanese leaders they “must stop using Lebanon and the Middle East for foreign interests” ahead of talks for a planned papal visit.
The World Bank has accused Lebanon’s political rulers and the financial elite of “orchestrating a deliberate depression” by exploiting their grip on economic resources and “threatening the country's long-term stability and social peace." It says meager amounts of foreign aid and the central bank’s resources have been sapped. Meanwhile, the Lebanese currency has lost more than 90% of its value since 2019, plunging most Lebanese below the poverty line.
"Over two years into the financial crisis, Lebanon has yet to identify, least of all embark upon, a credible path toward economic and financial recovery," said Saroj Kumar Jha, the World Bank's near east regional director.
The Vatican has also weighed in. Visiting Archbishop Paul Gallagher said that Pope Francis is very concerned and would like to visit Lebanon soon.
Gallagher, the Vatican secretary for relations with states, criticized the country’s elite, calling for “an end to the few profiting off the suffering of many." "The Lebanese people must be given the opportunity to be the architects for a better future in their land without undue interference," the archbishop said, after meeting President Michel Aoun, a Christian ally to Iran-backed Hezbollah.
Joseph Bahout heads the Issam Fares Institute at the American University of Beirut. He told VOA Lebanon’s rulers are making the following proposal to the International Monetary Fund to secure a bailout: Of the $70 billion of losses Lebanon has incurred, 70% will be borne by the individual depositors. The banks will take 16% and the state will bear the rest. The basic rule worldwide, Bahout says, is the state first takes responsibility, then the banks and lastly the depositors.
“What is happening is not the result of certain accidents or economic misfortunes, but it is a deliberate act of leading the country to where it is. This is what I think the World Bank and the Vatican envoy are pointing out. Instead of trying to solve the crisis for the benefit of the majority, the political and financial oligarchy is only taking care of its own interest at the expense of the people,” said Bahout.
It’s unclear how the International Monetary Fund would respond to this proposal as talks continue. But to date, politicians have struggled to implement several financial and accountability reforms the IMF requested months ago, including forensic audits of the central bank and state institutions and a capital controls law.
The World Bank reported that "worryingly, key public and private actors continue to resist recognition of these losses, perpetuating the zombie-like state of the economy."
Archbishop Gallagher offered the Vatican as a possible host for a dialogue between Lebanese political actors, if it is requested by all parties involved. But he also told President Aoun that “any weakening of (the) Christian presence would destroy the internal balance and Lebanese identity.”
Gallagher said the Vatican’s position was that “reforms, along with the support of the international community, are necessary to help Lebanon preserve its own identity as an example of peaceful coexistence and brotherhood between different religions.”