Driven to bankruptcy: The corrupting forces behind Lebanon’s economic meltdown

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Driven to bankruptcy: The corrupting forces behind Lebanon’s economic meltdown

The huge explosion that ripped the Port of Beirut apart in 2020 highlighted Lebanon’s collapse as a functioning state, dominated as it is by a handful of corrupt sectarian leaders. Can anything reverse the rot?

By Rania Abouzeid

At least 216 were killed and more than 6500 injured by the blast, yet no one has been 
held responsible.

At least 216 were killed and more than 6500 injured by the blast, yet no one has been held responsible.Credit: Diego Ibarra Sanchez/The New York Times Licensing Group/Redux

The head of Lebanon’s Central Inspection Board, Judge Georges Attieh, stood in his mother’s fourth-floor apartment, his childhood home in Beirut, and pushed open a new, white window shutter. A few steps away, a damaged piano covered in a floral sheet was surrounded by a jumble of objects: broken dining chairs, cardboard boxes, a clothes steamer, rolled-up rugs. Attieh looked out at the flat blue sea visible between the few buildings that separated his mother’s apartment from the Port of Beirut. “I haven’t been here in six months, even though I drive by here every day,” he said. “I can’t. I’m unable to come here. It isn’t easy.”

The last time he was here, on August 4, 2020, he had just rushed from his office across town to rescue his mother and his younger brother Joseph. At 6.07pm that day, a portion of some 2750 tonnes of ammonium nitrate, recklessly stored at Beirut’s port since 2014, suddenly exploded. A fertiliser often used as a component in improvised explosive devices had been stockpiled within walking distance of residential neighbourhoods.

The explosion was one of the largest non-nuclear blasts in history. It killed at least 216 people (the exact figure is unknown) and injured more than 6500. It left hundreds of thousands homeless and damaged 85,744 properties. Attieh’s mother and brother survived, but between them, they needed about 100 stitches. Nineteen people from their neighbourhood weren’t so lucky. Their names are memorialised across the street on a stone plaque bordered by red geraniums.

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More than a year later, not one person has been held responsible for a peacetime explosion that harmed more people than any single violent episode in Lebanon’s long, troubled history. A handful of senior political, judicial, security, military and customs officials – including President Michel Aoun and former prime minister Hassan Diab – all knew that volatile materials were stored at the port and did nothing to remove the danger.

A judicial investigation is underway, but few Lebanese expect it to identify the culpable and deliver justice, not because they don’t trust the investigative judge but because they fear political interference.

The first judge charged Diab, along with three former ministers, in December 2020. All refused to appear, claiming immunity. The judge was removed for “bias”. Similar attempts were made to remove the second judge, Tarek Bitar. Those failed, but the political establishment – especially the Shiite group Hezbollah and its allies – has continued to try to dismiss Bitar, spawning violent protests last month that left at least six people dead. Many Lebanese are calling for an independent international investigation.

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Motorists can queue for petrol for days, as Lebanon suffers one of the world’s worst economic collapses in 150 years.

Motorists can queue for petrol for days, as Lebanon suffers one of the world’s worst economic collapses in 150 years. Credit: Diego Ibarra Sanchez/The New York Times Licensing Group/Redux


The Port of Beirut is overseen by a hodgepodge of government and security agencies with overlapping mandates. Technically, the port falls under the Ministry of Public Works and Transportation and the Ministry of Finance, as well as a body established in 1993 with a mouthful of a name, the Temporary Committee for Management and Investment of the Port of Beirut.

Despite its “temporary” status, it is still in operation – though very little of what it actually does is subject to any scrutiny. It does not publish financial statements, and its board members are appointed by the country’s political leaders. A host of civilian entities operates at the port within the various government ministries and committees, in addition to security and intelligence agencies, including the Lebanese Armed Forces.

More than 70 per cent of the population of a once-middle-income country now lives in poverty.

The Beirut explosion was one of the ugliest manifestations of everything that has gone wrong with Lebanon since the end of the 15-year civil war in 1990, an indictment of a post-war system that has enabled a handful of politicians to dominate and exploit every facet of the state. The country has collapsed under the burden of concurrent crises that were decades in the making: a financial and economic implosion, grinding political deadlock, the August 4 blast.

In October 2019, tens of thousands of Lebanese across the country took to the streets in protest, fed up with the mismanagement and arrogance of their leaders. “All of them means all of them!” was the battle cry. Lebanon’s October Revolution was met with force and fizzled. And then came the coronavirus pandemic.

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The Lebanese are now struggling to survive one of the world’s worst economic meltdowns of the past 150 years. More than 70 per cent of the population of a once-middle-income country now lives in poverty. The local currency has lost more than 90 per cent of its value.

In 2019, the Lebanese woke up one day to learn that the banks had locked them out of their accounts. Triple-digit hyperinflation has taken hold. Food prices alone have increased 550 per cent in the last year. Unemployment is soaring, businesses are closing and the country is haemorrhaging tens of thousands of people to emigration. Power outages can last for days. Internet services have become intermittent, and there are shortages of medications, from over-the-counter painkillers to cancer drugs, in a country once called the Hospital of the East. Hours- and even days-long lines for staples like bread and petrol have become the norm.

The country has been driven to bankruptcy by a handful of politicians, most of whom began as sectarian warlords. The power-sharing agreement that ended Lebanon’s civil war produced a cross-sectarian political system that has looted the state and weakened its institutions.


Attieh knows this better than most. The institution of which he is the head, the Central Inspection Board, is the country’s main investigative agency, responsible for keeping tabs on public services and funds. But his inspectors are forbidden to scrutinise many key state and state-affiliated bodies, including the Port of Beirut. These are the red lines that Attieh cannot cross. He wants to erase them.

As Attieh told me when surveying the repair work in his mother’s home: “There shouldn’t be a person or an administration dealing with public funds that isn’t subject to oversight.”

Attieh, a 44-year-old father of three who has taught law at Université Saint Joseph in Beirut for almost two decades, had been a judge for 17 years in various low-level courts when he got a call to meet the president in the spring of 2017. (Attieh says he didn’t know Aoun and is not a member of his political party, the Free Patriotic Movement.) Five days later, he was head of the agency.

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Attieh cannot hire or fire personnel. That privilege belongs to the cabinet and to the sectarian political leaders, who stack government ministries and public institutions with loyalists. In total, the number of inspectors on his team is less than half of the 106 he is allowed by law.

“The legal mechanism says that a person has to complain about their supervisor through their supervisor. It needs to change.”

Political leaders determine who is hired, enabling them to carve out private fiefs inside state institutions by doling out jobs to their followers. Citizens with wasta, or pull, have the advantage, even if there are still many clean and competent public servants.

Attieh’s Central Inspection Board has two main operational methods: surprise inspections and the investigation of complaints, though whistle blowers have few protections. “The legal mechanism says that a person has to complain about their supervisor through their supervisor,” Attieh said. “It needs to change. The complaints should come directly to Central Inspection, and if that happens, managers will fear their employees.”

Georges Attieh wants the government oversight body he leads to be allowed to investigate state-affiliated bodies, such as Beirut’s port.

Georges Attieh wants the government oversight body he leads to be allowed to investigate state-affiliated bodies, such as Beirut’s port.Credit: Diego Ibarra Sanchez/The New York Times Licensing Group/Redux

For now, Attieh’s powers extend only as far as a ministry’s general manager. Ministers can and have forbidden their employees to co-operate with Attieh’s inspectors, going so far as to kick inspectors out of the Ministry of Public Works and Transport, for instance, the same ministry that shares responsibility for the port. It was closed to Central Inspection by four consecutive ministers (including two who are suspects in the Beirut explosion) – until Attieh pushed his way in.


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Lebanon’s dysfunction can be traced directly to the country’s post-civil-war system of governance. When the war ended, a new government was forged not out of an attempt to reckon with the toll of death and destruction, but by burying the past under a 1991 amnesty law that paved the way for sectarian warlords to become sectarian political leaders.

Lebanon’s sectarian system, which predates the war, divides positions among the country’s 18 officially recognised sects. The president must be a Maronite Christian, the prime minister a Sunni Muslim and the speaker of Parliament a Shiite Muslim. The system was designed to ensure that every community’s voice is heard in a country riven by factionalism, but it has enabled sectarian leaders to avoid accountability by claiming that any criticism of them is really a criticism of their sect.

The power-sharing deal that ended the civil war is known as the Taif Agreement. Among other things, the Taif Agreement (named after the Saudi city where it was negotiated) divided Parliament, the cabinet and senior civil-service positions equally between Christians and Muslims. This sectarianism was supposed to be temporary, but more than three decades after the agreement was signed, it is still deeply entrenched, and some of the Taif Agreement’s many other provisions, like decentralisation and the creation of a senate, have not been implemented.

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Hussein el-Husseini, the 84-year-old former parliamentary speaker who is known as Abu Taif, or the father of the Taif Agreement, told me at his home in Beirut that implementing Taif would mean “their role will end”. Every Lebanese knows whom he means: the half-dozen or so men who have called the shots in Lebanon since the end of the civil conflict. “I named them the company of five,” el-Husseini said. “A bunch of thieves, a company of five that has ruined us.”

There’s Nabih Berri, the leader of the Shiite Amal Movement militia turned party, who has been parliamentary speaker since 1992. The Druse chieftain and former warlord Walid Jumblatt, head of the Progressive Socialist Party. The Maronite Christians’ Samir Geagea, the leader of the Lebanese Forces
militia turned party. And Geagea’s wartime and peacetime rival, the current president, Michael Aoun, a general who commanded part of the Lebanese Army that split along sectarian lines during the war.

And finally, the Sunni billionaire businessman and former prime minister Rafik Hariri. Hariri was assassinated in 2005 and succeeded by his son, Saad, the political heir of the Future Movement party. A company of five plus one: Hezbollah, which first entered government in 2005.

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Shared goals can trump political differences. Riad Kobaissi, an investigative journalist with Lebanon’s Al Jadeed TV channel who has looked into corruption at the port since 2012, told me that every major political party has its people at the port and even rivals can co-ordinate in money-making schemes.

Journalist Riad Kobaissi has looked into corruption at the Beirut port since 2012.

Journalist Riad Kobaissi has looked into corruption at the Beirut port since 2012.Credit: Diego Ibarra Sanchez/The New York Times Licensing Group/Redux

Over the years, Kobaissi and his colleagues have revealed how, for the right price, shipping containers entered or exited the country without proper inspection; containers were stolen and passed through the port’s security checkpoints; hefty fines vanished or were markedly reduced with a bribe.
Of the 25 or so customs officers at the port responsible for inspecting containers, 16 were caught taking bribes in footage that Kobaissi broadcast. All kept their jobs, even after eight were prosecuted and some were imprisoned. “Until now, until now, they are still serving in their positions at Beirut harbour! Till now!” Kobaissi said. “You’re asking me how there was an
explosion in the port? This is how.”

When I met Hassan Diab in May at his office in the Ottoman-era hilltop Grand Serail, he was waiting for a new government. Diab had been prime minister for a total of six months when the blast occurred; he and his cabinet resigned days later. He had now been the caretaker prime minister for nine months and counting, and would become the longest serving caretaker in Lebanon’s history.

This August, Bitar, the judge leading the port investigation, subpoenaed Diab and others charged in connection with the explosion. Diab, who had given a statement to Bitar’s predecessor, has refused to appear for questioning as a suspect.

I put it to Diab that he hid behind his sect like an old-school sectarian politician. “I’m not hiding behind anything – I’m saying I abide by the Constitution,” he said, “and the Constitution says if you want to accuse a prime minister, you do it in the Parliament.”

Diab insists that the charge against him was politically motivated and that he was a scapegoat. “I knew of it” – the ammonium nitrate – “on July 22, about 10 days earlier, and some people knew about it for seven years. So was it a political decision or not?”

In April 2020, Diab’s administration approved an economic recovery program based on negotiating with the International Monetary Fund for assistance. Diab’s cabinet calculated that the financial losses in the central bank alone amounted to $US50 billion and called for equitably distributing the burden of those losses. Predictably, representatives in Parliament scuttled the plan, insisting the losses were much lower, and the banks proceeded to push the debt off from themselves and their shareholders and on to regular citizens by severely reducing the value of their deposits. Talks with the IMF collapsed because the Lebanese could not agree on the size of the financial losses.

The high-interest rates on bank deposits encouraged a rentier economy that disincentivised investment in industry and agriculture. Hala Bejjani, the former managing director of Kulluna Irada, a civic organisation for political reform, told me that the signs of Lebanon’s financial doom were “obvious” but that leaders didn’t care to see them: “They were each focused on their fiefs.”

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A new Lebanese government headed by Najib Mikati was formed in September, and in October it restarted the forensic audit of the central bank and talks with the IMF. The Saudis and their Gulf allies, meanwhile, have withheld aid that would help dig Lebanon out of its deep hole, largely because of Hezbollah’s powerful role within the state and its strong ties to their regional nemesis, Iran.

Some Lebanese blame Hezbollah for the port blast, accusing it of having a connection to the ammonium nitrate and of stockpiling weapons at Warehouse 12, which made it a target of an Israeli air strike that set off the port explosion. (Israel denies the allegation.) Hezbollah’s detractors also claim the ammonium nitrate at the port was destined for its ally, the Syrian regime, for so-called barrel bombs. Hezbollah, for its part, denies any connection to the fertiliser or the blast, maintaining that the substance was stockpiled by Lebanese on the other side of the political spectrum who are opposed to President Bashar al-Assad of Syria, to be used by al-Assad’s opponents in their improvised explosive devices.

Power outages are common and lengthy, but this barber shop stays open.

Power outages are common and lengthy, but this barber shop stays open.Credit: Diego Ibarra Sanchez/The New York Times Licensing Group/Redux


Against this backdrop, Attieh’s plans to strengthen the state may seem somewhat modest. But they are significant in a country where opacity is the order of business: He is trying to digitise procedures to enable the kind of transparency and tracking that would make anti-corruption investigations easier – or even perhaps prevent wrongdoing in the first place. He aims to create an interlinked data-based system across public institutions, municipalities and ministries so that policy decisions can be based on collectible data that is shared with the public, not a politician’s opinion or private side deals.

Attieh has developed and implemented Lebanon’s first e-governance platform, known as Impact, which connects public institutions and citizens. It requires administrations to upload and share data in order to, say, geographically map COVID-19 cases, allowing people to register for coronavirus vaccinations as well as receive the permissions required to leave home during the multiple extended lockdowns that Lebanon imposed. Attieh says that in the first three weeks of Impact’s lockdown-permissions portal, it received eight million requests from two million people – this in a country of about five million Lebanese and some 1.5 million Palestinian and Syrian refugees.

“I’m an optimist, because otherwise I would pack my bags and leave. There is no middle ground.”

He is bursting with plans. He wants to introduce an internal auditing unit in every ministry and have it report directly to Central Inspection. He is working on a draft law to oblige anyone who deals with public funds or is in a public position, including ministers, to be subject to Central Inspection’s oversight. He and his team are formulating a comprehensive five-year road map for administrative reform. He needs just one thing to put his plans in action: “a government that will empower us,” he said. “If a new government doesn’t co-operate with us, for sure we will fail.”

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For Attieh, Lebanon faces nothing less than a battle for its destiny. “There is a move to rebuild the temple in the same way that we are now rebuilding the walls of our family home,” he said. Attieh hasn’t been back to his mother’s apartment since that one visit in February. It still pains him to go there. The apartment remains empty. “I can’t afford repairs,” he said. Although “every day, things are getting worse in this country”, Attieh hasn’t lost hope. “I’m an optimist, because otherwise I would pack my bags and leave. There is no middle ground. We either leave, or we work towards reform.”

This is an edited version of an article that originally appeared in The New York Times Magazine.

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