Page 27 - Issue 34

ELITE Vol.1, issue 34, August 2021
Vol.1, issue 34, August 2021

pound collapsed against the U.S. dollar, inflation increased

significantly, millions of Lebanese were displaced from the country,
nearly 120,000 Lebanese citizens were killed, and the situation in

1990 was like a disaster in all respects, and this current crisis began
with the lebanese government's debt to pay salaries of employees,
due to the control of militias armed on some public facilities and

deprived the government of its revenues.

After the civil war and in order to try to rebuild Lebanon, the Government launched
A’afaak 2000 plan, and its plan to save money for this plan was to borrow by selling

bonds and treasury assets to Lebanese banks at high interest rates in order to encourage
the banks to buy that bonds. The Lebanese Government not only did so, but began

borrowing from abroad in 1999 through the sale of international bonds called Euro Bund,
and in 2004 the debt doubled fantastically due to continued and repeated borrowing and

inability to afford it. On repayment, debt accounted for nearly 180% of Lebanon's GDP, a
very large figure.
Although total debt amounted to about $34 billion, there was no improvement in living

conditions, quite the contrary, unemployment increased and poverty rates increased
because most of the funds borrowed were disbursed on non-productive projects that did
not achieve the required return, and the remaining part was devoted to the repayment of

external debt, until the Lebanese Government was not able to borrow until the
repayment of old debt repayments.

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