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Lebanon's deep financial crisis is affecting every aspect of life there. There is no consistent electricity, most poor go hungry and joblessness is at record levels. With its currency nearly worthless, most keep their savings in U.S. dollars which are still hard to retrieve from banks. Leila Molana-Allen and Nick Schifrin look at the depths of despair driving people to extraordinary measures.
Lebanon's deep financial crisis is affecting every aspect of life there. There is no consistent electricity. Most poor go hungry. Joblessness is at record levels. And, with its currency nearly worthless, most Lebanese keep their savings in U.S. dollars. But even those savings are now hard to retrieve from banks.
In a moment, Nick Schifrin will speak with special correspondent Leila Molana-Allen, who's in Beirut.
But, first, Leila has this look at the depths of despair driving Lebanese to extraordinary measures.
This woman is robbing a bank, but the money she's demanding is from her own account. For three years, Lebanese have watched helpless as the value of their life savings plummeted, denied access to their money by the banks, as Lebanon's economy tanked.
Now, increasing numbers are storming banks to demand it back. Some take weapons. Others threaten to hurt themselves. All of them say they're desperate.
Bassam Al Sheikh Hussein, Lebanon (through translator):
I went to the bank many times trying to withdraw my money and explain that I have lost my job and I needed to live. I demanded my deposit so many times, only for them to refuse, claiming they have no money.
This summer, Bassam Al Sheikh Hussein raided his local branch armed with a shotgun and held employees hostage, forcing them to hand over $35,000 from his savings account. He says he will do it again if he has to get the rest. What's
Bassam Al Sheikh Hussein (through translator):
What has happened has happened. But what comes next will be much more severe. From now on, more drastic measures are going to be taken. I will forcibly take back what's rightfully mine on, even if it cost me my life, even if I had to kill them all at the bank.
Banks have shut down for weeks in response. But watching their countrymen take the law into their own hands has lit a fire amongst enraged depositors across the country.
Protesters have attacked the Central Bank, demanding justice. They say it's not them, but the government who are thieves. Many Lebanese refuse to believe their money is gone for good, and they're not entirely wrong. Those who can afford to wait years or even decades for the economy to improve may get a lot of the value of their savings back.
But with public services collapsing and prices going through the roof, this is the rainy day they have been saving for. And for those in the most desperate situations, waiting isn't an option.
Earlier this year, Clara and Rami (ph) Roukouz got the devastating news that their 2-year-old daughter, Martine (ph), has cancer. But while dealing with a mother's worst nightmare, Clara is also dealing with the stress of being unable to for Martine's treatment.
Clara Sfeir-Roukouz, Mother (through translator):
We spent what little savings we had trying to get her into a hospital, but they weren't enough.
Before the crisis, Martine's parents were a typical middle-class family. After the economy plummeted, at the exchange rate the bank is offering, their hard-earned $45,000 in savings is now worth less than $10,000.
But they can't even get hold of that. The bank has limited the family's withdrawals to only $100 a month.
Clara Sfeir-Roukouz (through translator):
What can $100 a month do for us? That won't even pay for a one-night stay at the hospital. That doesn't include surprises like tests and infections. The banks are withholding what's rightfully ours. They're making us beg for our dignity.
Martine's leukemia has a 90 percent survival rate among kids her age if treated quickly. But if there's a break in treatment, her chances will plummet fast. Martine's doctor is doing everything he can to raise donations to help, but it can't last.
If they have to stop, they could lose her.
Time is against us. Plenty of people are resorting to illicit measures. And I'm not saying I support it. But when it comes to the health of one's child, a person will do anything.
My husband might go wreak havoc at the bank. Who knows.
As they wait nervously for Martine's next round of chemotherapy, praying they will find a way to access their money and continue the treatment they know she will need for years, Clara and Rami do what they can to distract their daughter from the stress and fear enveloping their home.
While I'm facing these challenges, she's suffering all this pain and is so afraid. She holds my hand and asks me over and over again: "Why, momma?" And for that, I have no answer.
And Leila now joins us from Beirut.
Leila, you lay out this story about the banks. How did that situation unfold?
So, Lebanon's economy has been plummeting for about three years now.
And every time people thought that it had reached its lowest ebb, it's gone further. A little over three years ago, Lebanon's banks started to notice that the exchange rate was slipping. It used to be 1,500 to the dollar, 1,500 Lebanese lira to the dollar.
So, as the exchange rates started to slip, the banks worried there would be a run on the banks, meaning that everybody would come and take their money out, and they wouldn't be able to carry on. So, they started imposing capital controls, but not official ones.
That meant they stopped people from taking their money out. And, eventually, they closed. So people started to watch their savings disappear, even as the exchange rate went down and down and down.
Now, as I said, it was 1,500 to the dollar three years ago. It's now hit 40,000 Lebanese lira to the dollar in October. That is a monumental drop. People have lost 90 percent of their savings in the bank. The bank is now saying to people, they can take their money out at a rate of 8,000 Lebanese lira to the dollar.
So they would lose about 75 to 80 percent of their savings.
It's just extraordinary.
What are the economic prospects for the country? Any chances of fundamental reforms that it needs?
At the moment, it doesn't seem so.
As I said, the lira just keeps plummeting. The country has used a lot of what it had in foreign exchange reserves to try and plow those into the economy to lift the value of the lira. All that happens, it goes up for a couple of weeks, and then plummets back down even further.
And just give us a sense. What are the day-to-day conditions that people are having to endure today?
People are starving now. Many who haven't lost their jobs have lost their savings. As I just said, they can't feed their children at this point.
There are food banks feeding people, but their donations are running out too. People who used to donate to charity now are living off charity. Meanwhile, hospitals are barely functioning. And, where they do function, people can't afford the services. People can't get medicine. And, of course, we were just talking about the government.
There is no electricity in this country. We're currently getting about one hour of government-provided electricity a week. Everyone else runs on generators that run for 10 to 12 hours a day, if you can afford it, and those bills go up every month.
There are often petrol shortages. Pretty much just getting through the day is becoming impossible for people. And that's if you have the money to afford the daily things you need.
Leila Molana-Allen reporting for us from Beirut, thank you very much.
Watch the Full Episode
Nick Schifrin is the foreign affairs and defense correspondent for PBS NewsHour, based in Washington, D.C. He leads NewsHour's foreign reporting and has created week-long, in-depth series for NewsHour from China, Russia, Ukraine, Nigeria, Egypt, Kenya, Cuba, Mexico, and the Baltics. The PBS NewsHour series "Inside Putin's Russia" won a 2018 Peabody Award and the National Press Club's Edwin M. Hood Award for Diplomatic Correspondence. In November 2020, Schifrin received the American Academy of Diplomacy’s Arthur Ross Media Award for Distinguished Reporting and Analysis of Foreign Affairs.
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