Lebanon is grappling with its worst economic crisis in decades. The Lebanese pound, for many years pegged to the US dollar has significantly lost its value, leading to wide-scale inflation and unemployment.
At 150 percent, Lebanon has the third highest public debt-to-gross domestic product (GDP) ratio in the world. According to official statistics, in August last year unemployment stood at 25 percent, although numbers have sharply risen since. It is estimated that almost half the population now lives below the poverty line.
As an integral part of Lebanese society, the Lebanese Armenian community has also been significantly impacted by this severe economic decline, coupled with an increasingly deepening political crisis. In this interview with Shahan Kandaharian, editor-in-chief of Aztag Daily—the publication of the Armenian Revolutionary Federation (ARF) in Lebanon—we delve into this interrelated political and economic crisis, its impact on the Armenian community and what you can do to help.
Houry Mayissian: Lebanon has faced its fair share of economic and political turmoil. However, the current economic crisis has plunged the country into a new low and unprecedented hardship for a significant proportion of the population. How is the current crisis different?
Shahan Kandaharian: The current economic crisis in Lebanon is connected to the pressures and challenges faced by the country’s banks. In the absence of other industries such as mining, large-scale production and tourism, Lebanon’s banking system has been one of the main pillars of the country’s economy. Facilitating this have been the principles of easy and free money transfers, as well as account anonymity. This has largely encouraged foreign investment over the years.
In recent months, banks started imposing restrictions on the amount of US dollar transfers and withdrawals. Details previously not requested were made mandatory. These were the first steps in a gradual tightening of conditions ultimately leading to a significant devaluation of the Lebanese Pound, which for years and throughout many political and economic ordeals had maintained its stability against the US dollar.
The government has tried to adopt certain economic measures to help stabilize the Lebanese pound against the US dollar. However, their efforts haven’t borne fruit, because the exchange rate that is being set is often not being implemented on the black market due to a significant shortage of and demand for the US dollar. This is highly problematic in a country with a “dollarized” economy. The US dollar has been used interchangeably with the national currency for many years, and even salaries for many employees are set against the US dollar. The result has been skyrocketing inflation and unemployment, and predictions for the future are quite dire.
Of course, there is the political context to all of this. In today’s highly interconnected political and economic world order, any country that dares to “come out of line” becomes, in the first instance, subject to economic sanctions. Lebanon is currently under economic siege.
H.M.: What are the political factors driving this economic siege?
S.K.: The political knots of this siege are mainly three. The first is related to the political neutralization of Hezbollah, the Iran-backed, anti-Israeli Lebanese political party. US Secretary of State Mike Pompeo and various American delegations that have visited Lebanon in recent times have clearly indicated that an organization they consider to be terrorist should not be represented in Lebanese government and politics.
The second issue is the Israeli-Lebanese maritime dispute over oil and gas exploration in the eastern Mediterranean, including demarcation, drilling and usage rights.
The third relates to Trump’s so-called “deal of the century,” also known as his Middle East peace plan, which refuses Palestinian refugees the “right of return” to homes lost to Israel in previous conflicts. While Lebanon is not explicitly mentioned in the plan, the country has a significant number of Palestinian refugees, many of whom remain stateless.
As you can see, all three issues are related to Lebanon’s relations with the state of Israel, in an agenda that is being driven by Washington. Unfortunately, for now there seems to be no prospect that the ensuing economic and financial embargo might end any time soon.
H.M.: In the face of this tightening economic siege as you call it, large scale protests erupted in the country following a government proposal for new taxes on petrol, tobacco and VoIP calls in October last year. Initially peaceful, these protests turned violent. How and why did this happen?
S.K.: This tightening economic siege has provided fertile ground for large scale civic protests. At first they focused on social issues and were largely peaceful, with people gathering to sing, eat and dance together. This movement encompassed groups that subscribe to different political ideologies and agendas – from the far left and the environment to the far right.
However, it did not take long for these protests to turn political, with demands for snap parliamentary elections, the resignation of the government and the abolition of Lebanon’s confessional system. In this regard, it started to seem like they were part of a bigger plan or agenda that is being pushed forward. The methods the protestors were using also changed, increasingly becoming more violent and reverting to hooliganism, the destruction of shops, cars, etc.
Yielding to pressure, the government resigned in late October, paving the way for a government made of technocrats, who were not members of any political party – a key demand by the protestors. Nonetheless, this transition to a technocratic government was only partial, as new government members had their political and religious affiliations and loyalties.
It was under these conditions that Lebanon reported its first case of COVID-19 in early February. It should be said that while the pandemic became another challenge for the country to grapple with, the enforced strict lockdown somewhat stabilized the political situation in the country.
Of course, it was to be expected that as life starts returning to normal post COVID-19, these protests would restart and we’ve been seeing this in recent weeks. In these renewed protests, Hezbollah’s disarmament is also becoming a theme. It seems that new fault lines are appearing in Lebanese society and politics, aligned with a shifting geopolitical order on a wider scale.
H.M.: A very complex situation on all fronts. What has been the impact on the Armenian community – both on a personal and organizational level?
S.K.: All of this has had a very heavy toll on Lebanese society, and by extension the Armenian community. While we don’t have official statistics, alarming figures are often being reported regarding unemployment trends. While some of these figures may be exaggerated, on a daily basis we are witnessing the closure of many companies, shops and workplaces, paving the way to rampant unemployment.
Community organizations are also bearing the brunt as declining income levels have led to staff cuts and shift reductions. The impact on community organizations is very important and cannot be emphasized enough. The Lebanese Armenian community has provided a unique environment for the development of human resources through our many community schools, the only Armenian university in the world (Haigazian University), the Hamazkayin Higher Institute of Armenian Studies, as well as the Catholicosate of Cilicia, through its spiritual and religious education.
This is also true for the preparation of political cadres specially through the ARF and its affiliated structures and organizations. Our professionally staffed offices such as the youth affairs office, and publications such as Pakin, Gaydzer, Troshag and others have played a unique role in this regard.
Our community and party organizations and structures are characterized by a level of professionalism that is unique to the community. When these organizations are impacted by the economic crisis and if this ultimately leads to cuts or downsizing, then this process of developing human resources will also be affected. In this regard, supporting our community and its organizations should also be a pan-Armenian, pan-Diasporan and pan-ARF agenda, because the cadres developed here have not only served our own community but the worldwide Diaspora.
The Diaspora’s support is essential to ensure we can keep up this mission. The Lebanese Armenian Diaspora has a key role to play, as it knows very well the impact and capabilities of our community in preparing manpower for the entire Diaspora.
It is a very, very tough time, and as I mentioned before it is difficult to visualize how we can come out of this crisis. The donation drives that are being organized outside of Lebanon are critical. They should not be seen only as a contribution to the Lebanese Armenian community, but as an investment in the development of human resources for the entire Diaspora.
H.M.: There are many fundraising campaigns currently underway in various communities across the Diaspora. Can you provide details of how some of these funds are being used?
S.K.: These funds are mainly being directed towards providing basic needs such as food and medicine to vulnerable community members, through the ARF Central Committee’s Coronavirus Crisis Committee. The Committee was formed in the initial days of the pandemic to educate community members, assist in prevention efforts, distribute protective gear such as masks, sanitizers, etc. The Committee also assisted with the medical needs of infected community members.
Fortunately, Lebanon is considered one of those countries, where the response to COVID-19 has been quite efficient. The Ministry of Health was very organized from day one and the population, with some exceptions, displayed a high level of social responsibility. We don’t know how many community members got infected with COVID-19, but sadly we have had three deaths.
From the Coronavirus Crisis Committee’s work on the ground, it became apparent very quickly that there is also an urgent need for access to basic goods. Soon the Committee started working on this front as well, assisting thousands of families with no income through the provision of food boxes or vouchers, medications and hospital care costs when required.
Of course, coordinating this requires large sums of money, especially because the crisis is ongoing and we have to continue providing this level of basic emergency aid for as long as required. We would not be able to do this without the support of other communities in the Diaspora.
H.M.: What additional support does the community need right now?
S.K.: Our immediate priority is emergency relief. If this crisis is prolonged, however, we will need a coordinated effort to support community organizations.
To give you an example, Aztag Daily is currently being published in four pages – a significant reduction from our long-established 10-page daily newspaper. After COVID-19 we started working with minimum staff due to social distancing requirements. With many of these restrictions over, we can now gradually increase our staff count and number of pages. However, this requires additional budgets – keeping in mind that income from paper sales, ads, community announcements and donations has decreased. To boost income, we have been selling our searchable, digitized archives of 90 years to different organizations across the Diaspora. We have also called on our readers overseas to donate to the paper online.
Of course, all community organizations will be impacted long term. The most vulnerable in this regard are our schools due to parents’ inability to pay tuition fees. This kind of support requires careful study and planning of how we can optimize community organizations, how and where funds can be raised, etc. This is a process we have already started looking into.
H.M.: When asked about the situation in Lebanon and its impact on the community during a recent session of the National Assembly, Foreign Affairs Minister Zohrab Manatsakanyan said, “Armenia can’t remain indifferent towards the difficulties faced by the Lebanese Armenian community. Through our diplomatic representatives we are in constant contact with all community organisations and we will continue that dialogue… Armenia has been and will continue to be the motherland of every Armenian who decides to live here. We will continue to work in this regard and prepare the necessary foundation…” From your knowledge on the ground, what has been the response of the Armenian government thus far?
S.K.: The Armenian Ambassador in Lebanon is continuously consulting with community leaders on the various financial, educational and security challenges facing the community. It is worth mentioning that the Hayastan All Armenia Fund has made donations to community schools and media outlets. This was a decision made in Armenia and facilitated by the Fund’s local branch as well as the Armenian Embassy. I think other such assistance will follow in the future.
However, the central element of support from the Armenian government will revolve around repatriation, especially once travel resumes between the two countries. Even before the COVID-19 pandemic, we had been seeing repatriation intentions among Lebanese Armenians. I think the Armenian government needs to be prepared for this. An important factor to mention here is that many Armenians living in Lebanon are also citizens of Armenia. As such, in addition to supporting Armenian nationals in general, the government has an obligation to care for its citizens – from providing financial support to evacuating them, if and when necessary.
This is a pan-Armenian agenda and should be viewed within the context of the dwindling number of Christians in the Middle East in general. Other Christian communities in Lebanon such as Chaldeans and Assyrians are stateless. Armenians now have a country and a state. This is a very important factor. The government of Armenia needs to start thinking in this direction. This means looking into a repatriation law, but also measures to support people once they arrive. If Syrian Armenians fled war and bombs with limited or no resources, Lebanese Armenians will be fleeing an economic crisis and will find themselves in a weak position in Armenia.
From financial and social assistance to educational issues and repatriation, Yerevan should stand ready to support the community. As community leaders, we are able to assist the government in these discussions.