Skip to main content

World Bank blames Lebanon for 'deliberate' economic crisis

The World Bank accused Lebanon’s elites of conducting “Ponzi finance” and deliberately pursuing harmful fiscal policies. Meanwhile, the Beirut port has caught fire again.
A picture shows the damaged grain silos at the port of Beirut.

The World Bank released another report on Lebanon’s dire economic crisis today, a day before the two-year anniversary of the Beirut port explosion. 

The DC-based institution titled its Lebanon Public Finance Review “Ponzi Finance?” referring to the Ponzi fraud scheme whereby new investors are paid with funds from old investors. The report began with a “message” to the Lebanese people in English, Arabic and French. In the message, the World Bank called Lebanon’s crisis “deliberate."

“A significant portion of people’s savings in the form of deposits at commercial banks have been misused and misspent over the past 30 years,” The World Bank said in the report. 

The World Bank specifically blamed the government for accumulating more debt than necessary and using public services for its own benefit. Specifically, the bank said that the country’s elites used state resources for private gains by weakening public services, which allowed lucrative private sector deals such as for fuel-based generators and private trash collection. This also enabled religious groups to “tighten their grip on citizens” by providing services themselves, which strengthened Lebanon’s power-sharing system between Muslim and Christian communities, according to the report. 

The World Bank also repeated its reform proposals from 2020, including a debt restructuring program, an infrastructure development package, and measures against corruption and inefficiency in the public sector. 

Lebanon has been suffering from an economic crisis since 2019, marked by food and fuel shortages, the depreciation of Lebanon’s currency and more. The situation worsened on Aug. 4, 2020, when fertilizer caught fire in Beirut’s port and led to a massive explosion. The blast killed hundreds and damaged much of the city. To date, no Lebanese officials have been convicted in relation to the explosion, despite an official inquiry. 

The Beirut port explosion aftermath has made headlines recently. Last month, fires broke out at the port’s grain silos. Today, some Lebanese media reported that the silos could collapse at any minute. 

Join hundreds of Middle East professionals with Al-Monitor PRO.

Business and policy professionals use PRO to monitor the regional economy and improve their reports, memos and presentations. Try it for free and cancel anytime.

Free

The Middle East's Best Newsletters

Join over 50,000 readers who access our journalists dedicated newsletters, covering the top political, security, business and tech issues across the region each week.
Delivered straight to your inbox.

Free

What's included:
Our Expertise

Free newsletters available:

  • The Takeaway & Week in Review
  • Middle East Minute (AM)
  • Daily Briefing (PM)
  • Business & Tech Briefing
  • Security Briefing
  • Gulf Briefing
  • Israel Briefing
  • Palestine Briefing
  • Turkey Briefing
  • Iraq Briefing
Expert

Premium Membership

Join the Middle East's most notable experts for premium memos, trend reports, live video Q&A, and intimate in-person events, each detailing exclusive insights on business and geopolitical trends shaping the region.

$25.00 / month
billed annually

Become Member Start with 1-week free trial

We also offer team plans. Please send an email to pro.support@al-monitor.com and we'll onboard your team.

What's included:
Our Expertise AI-driven

Memos - premium analytical writing: actionable insights on markets and geopolitics.

Live Video Q&A - Hear from our top journalists and regional experts.

Special Events - Intimate in-person events with business & political VIPs.

Trend Reports - Deep dive analysis on market updates.

All premium Industry Newsletters - Monitor the Middle East's most important industries. Prioritize your target industries for weekly review:

  • Capital Markets & Private Equity
  • Venture Capital & Startups
  • Green Energy
  • Supply Chain
  • Sustainable Development
  • Leading Edge Technology
  • Oil & Gas
  • Real Estate & Construction
  • Banking

Start your PRO membership today.

Join the Middle East's top business and policy professionals to access exclusive PRO insights today.

Join Al-Monitor PRO Start with 1-week free trial