The Economic and Financial Effects of the Lebanon Crisis

By Ryan Lee

Sunny Hills High School

In current events, a terrible tragedy has struck the city of Beirut in Lebanon. An absolutely disastrous explosion occurred on Tuesday, August 4th leaving around 300,000 residents homeless. 

Before discussing the explosion’s impact itself, let’s set the scene. Even before this event, Lebanon as a whole was having an extremely hard time both financially and politically. With forms of corruption and debt mismanagement in the government, urgent problems were not being solved. This is proven by the fact that over 45% of the population lived under the poverty line, 33% are unemployed, and inflation in the market makes primary resources even more unattainable. With all of these problems, and more, I feel that the tragic event that happened was the catalyst for Lebanon’s largest recent crisis.

As Daniel Kong, an 11th grader at Sunny Hills High School, says, “I assume that the Lebanon crisis negatively affected its economy because of the recovery process.” As Daniel said, the recovery process is going to be extremely difficult for Lebanon due to its, as mentioned before, corrupted government and poor debt management skills. The country won’t know what to prioritize, and what actions to take. In addition, Beirut’s ports and the country's main grain silo were destroyed. The effects will not only be limited to the city of Beirut, but extended to the whole nation. With the main source of grain gone, Lebanon can probably expect even more inflation due to lack of supply, which leads to even more poverty and people in need. Another very direct impact was the 300,000 people left homeless. This kind of sudden change in demographics would cause so many changes such as local/small businesses failing, more demand for living essentials, and reconstruction costs. With the state of the country being how it was before the tragedy raising and finding the funds for recovery seem near impossible. This kind of damage is hard enough to deal with in even a large and economically stable country, but in a country such as Lebanon, the task becomes exponentially harder.

In the simple yet to the point words of Chris Choi, an 11th grader at Orange Lutheran, “The Lebanon explosion impacted the economy greatly.” There are dozens of more possible economic problems in Lebanon that were not even covered in this article so it is hard to accurately predict the state of this country in the future. At this point, we’ll have to observe and see what happens to Beirut, as well as Lebanon.