Gov Accountability

Could a renewed Lebanon arise from the ashes?


A massive explosion devastated Beirut on Tuesday, August 4, at 6 pm local time. The capital's port was ruined: at least 158 people were killed; more than 5,000 people were seriously injured; and the country’s food reserves were destroyed, most notably including the grain silos. Authorities announced that 2,750 metric tons of ammonium nitrate that had been stored improperly since 2014 were the source of the catastrophe. The blast had a 3.5 magnitude earthquake and could be felt across the Mediterranean in Cyprus. Residential areas surrounding the port were ravaged, including Achrafieh and downtown. People are still missing under the rubble. The intensity of the blast destroyed doors, windows, furniture, and appliances—making more than 300,000 people homeless.

Before and after shot of a building in Lebanon.
The before and after of a residential building in Beirut that was severly damaged by the explosion.

“It’s the final blow,” declared Kristelle Mardini, director of the Lebanese Institute for Market Studies (LIMS). “The country was already going through an economic recession and people lost their jobs, businesses, life savings and the value of currency dropped by 75 percent. Then COVID-19 came on top of the crisis and when we thought we had it all, a wrecking explosion takes down the port and key districts of the country. Achrafieh and Downtown Beirut host most of the malls, shops, restaurants, bars, hotels, hospitals, schools and universities; the destruction will have a lasting effect. On the other hand, it is heartwarming to see all the young people who took the initiative, went down to the streets with their brooms and shovels and started cleaning the streets from the broken glass and rubbles. They came from all regions, religions and social backgrounds and they are doing a fantastic job. If you walk around, you will see tears and hugs from affected families and business owners in gratitude to the support they are getting form the youth.”

Prior to the explosion, LIMS’s team of nearly a dozen public policy professionals had been leading a national dialogue on necessary reforms the country ought to undertake. This week’s disaster being another in a long line of symptoms of poor management by the national government provides added urgency to the importance of LIMS’ work.

A group in Lebanon poses around a conference table in a. boardroom.
The Lebanese Institute of Market Studies delivers market-oriented policy reforms through working with policy makers and the media.

“There is no time to lose,” said Dr. Patrick Mardini, the president of LIMS, who has been interviewed by several news agencies in the days since the blast. “The port must be reconstructed quickly and the only way to do that is through privatization. The Lebanese government does not have the funds to finance reconstruction and they lost the ability to borrow when they defaulted on sovereign debt. Even if money were available, the Lebanese government’s inefficiency and entrenched corruption would lead to lavish overspending and they can’t even deliver a running facility anytime in the future—they'll just waste the money and ask for more. A privately built, owned and operated port would improve the time and cost of trade for Lebanon, bring prosperity and saving the taxpayers the reconstruction cost."

Dr. Mardini has appeared on several news programs to contextualize the need for reform after the explosion in Beirut. Source: Al Jazeera English.

The explosion in Beirut was not the cause, but the symptom of years of mismanagement, greed, and indifference by Lebanon's ruling class. Despite massive amounts of public spending, Lebanon’s government is unable to provide basic goods to the majority of its people, including reliable electricity, clean water, decent roads, and consistent internet access. The Lebanese Institute for Market Studies' BELIEF in Lebanon: Blueprint to Establish Leading Infrastructure, Economy & Finance in Lebanon report includes a series of policy prescriptions that take on wasteful and ineffective public spending, dismantle government-backed monopolies, and establish checks and balances on future public expenditures. The time is now, perhaps more than ever, for holistic reforms to Lebanon's infrastructure, economy, and finance to lay the groundwork for future prosperity, freedom, and peace.

The people of Lebanon deserve real change. LIMS is their champion.