Lebanon Lost 50% of Its Economy in 2 Years
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- เผยแพร่เมื่อ 6 พ.ค. 2023
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What led to Lebanon's devastating economic crisis, causing a shrinking population and half of its GDP to vanish? Why did it collapse, and what are the implications for other developing nations facing similar challenges?
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Thank you for making this video. I'm Lebanese and requested this video for years!
At 8:47, the town in the background is my hometown and that's the beach I swim in. I meet lots of beautiful foreign women in hopes of finding love and a passport 😅
Do a video how the payroll account divides of the means of production, not publicly traded to divide up the means of production.
Do a video about how debt is bad. Not something to create a bubble with to make money. AKA the Glass-Steagall Act.
Disney World is a 100yr old company that should be debt free. The most successful company should be debt free. And not publicly traded to share the means of production. By creating a in debt bubble on purpose to make passive income. How passive income is communists.
Disney with a owner and publicly traded is a oxymoron.
A payroll for employees only is used to divide of the means of production. The owner of the company I work for receives a paycheck just like me.
Arrest the people avoiding work. Arrest the passive income people. Passive income is a predatory lender. Not a helpful domestic product.
This was the reason for the Glass-Steagall Act. I bank at a not-for-profit credit union. And I like investors of a not-for-profit credit union bank.
Make a video about Algeria please
Bostwana next, the miracle of africa
As a Zimbabwean, all I can say to the Lebanese is "Stay Strong". Take it from us, collapse is not death and you'll find that your people are more resilient and resourceful than anything an economic report can measure.
It will hurt, hurt a lot, but you WILL make it out the other side. We still keep you all in our prayers regardless.
Now that Mugabe is gone, Zimbabwe has a much brighter future than before
Didn't saw your country playing cricket from a long time where are you ?🤔
@@stevencooper4422 he said he was forced to hyper inflate by generals
expel foreigners and go jihadi. that will definitely help leb situation
May Lebanon rise again and may India fail
This was a national Ponzi scheme. Investors were lured in with savings accounts paying up to 20% interest. They needed foreign currency (USD) to pay for their imports (85% of their food, 90% of their fuel). The politicians and bankers embezzled the people's savings and dumped it into foreign accounts. Remittances were a huge part of the economy, up to 25% of GDP. A good chunk of that money came from high paying jobs in the energy sector in the Middle East, which you neglected to mention. Remittances took a big hit when energy prices crashed. The political situation is broken because of sectarianism, so they've been dragging their feet to make the kind of reforms that the IMF could have helped with. Now they're in too deep and it's too late. The LBP has lost 95% of its value since October 2019, and food prices have increased by 25x. The World Bank said that this is one of the three worst economic crises of the last 150 years. They need to tear up their constitution and come up with a better political system to have any hope of recovery.
well said... as one of the 20% who left the country, i have to say this video doesnt give Lebanon its fair share of negative critique. corruption and the ponzy scheme the rulers played on their people is the main reason for the collapse.
a 1.6 mark is very generous.
we dont have electricity man !!!
Absolutely correct, I think the mismanagement is overlooked by the video. The insane interest rates were too good to be true and it was just waiting to collapse.
@@sameraboushakrafr bro I can't wait to leave and achieve my ambitions abroad.
The political system Lebanon uses was designed to win the peace, by sharing power between different formerly warring factions. In that sense it has been successful. Unfortunately that's pretty much all it did. It ossified social divisions and locked in patronage and clan-based power structures. There's little in the way of a 'national' Lebanese identity as a result. Sure they're not shooting each other, but everything is stuck and corruption is rampant. However 'tearing it up' risks sending the country back down the tubes into full blown civil war. While their political system may be terrible for development, it has achieved what it was set up for.
@@ArawnOfAnnwn While this is true, peace between the factions rests on shaky ground. Sectarian violence still flares up from time to time, assassinations are still commonplace, and there is deep mistrust on all sides (to put it lightly). Iran is mainly at fault for Lebanon's political deadlock today. You're correct; the politicians each sponsor their own people. There are more than 20,000 government employees who are no more than ghost staff...they collect salaries but they are nothing but leeches. The politicians are the same people being rotated and recycled, and there is no direct representation. There is no incentive for them to take care of Lebanese people as a whole; if anything, they are rewarded for maintaining these stupid divisions.
As a Lebanese, thank you a lot for the overview and drawing attention to my country. For westerners, Lebanon is a canary in the coalmine. If you're wondering what a collapse like this means in the daily lives of Lebanese, I explain it all in a few of my videos.
No word on the terror organization controlling the country?
Thats dark
My best friend is from Lebanon and my (Christian) parents make their annual pilgrimage there. Really heartbreaking what is happening to this beautiful and historic country and it’s people.
The West is kinda like the upper classed that in that "if the aristocracy catches a cold, the working class dies of pneumonia". If places like Europe or America are in hotwater, I can bet that most places in Africa, Middle East and Asia are completely falling apart, imagine a world where the West trying to take the aid not give it.
Why isn't the government of Lebanon trying to get rid of the Hezbollah?
As a lebanese in Lebanon i really feel ashamed, because most of the problems we faced wouldn’t be as impactful if we didn’t have such a corrupt government. Something i wanted to add, is that the protests started because the people weren’t ok paying more taxes to a government that has literally done nothing for its people in 10 years. It really is insane because none of the money we would pay in taxes would go anywhere, literally all the money we would give would be waisted and lost. To give some personal examples, in the 4 years I’ve lived here before the crisis i have never seen a single pothole being fixed, when i drive i need to remember them to not brake my car/bike. We also do not have stable electricity even though we have been investing billions over the years (obviously the money was spent on some politicians vacation), thus we rely on generators to supply us with electricity (the owner of the company that supplies the generators to the people is also somewhat in charge of developing the electrical grid, which is a huge conflict of interest because he wants us to depend on generators to get more money, f*** that guy). Also, the only time I’ve heard of an infrastructure project was for a dam in northern lebanon and to my understanding it ran over budget, it took years to create, it destroyed the neighboring environment and it was literally useless. And im not saying that its useless out of personal beliefs, but it is literally not in use and it had no real purpose when it started getting built. This is just some personal examples and there are hundreds of other examples that show that our government is just a cluster of insecure dudes that take our money and waist it on themselves.
Personally I am a student in AUB and i feel sad because staying here after my studies is not an option. And all of my friends have already left, and all the new people i meet in uni also have plans to leave. And i ask myself, if all the qualified people flee the country, who are the people that will vote and lead us? And the answer to that question is never good.
In conclusion f*** the politicians, f*** the stupid people that keep voting those politicians, f*** the people that are being payed by the different political parties to be there puppet and f*** the international terrorist group that is taking over our government. I hope they have miserable deaths because thats what they deserve for taking some peoples home away just for personal greed.
Most governments around the world are like that - tax money goes to waste. Some just know how to hide their personal gain more than others
Israel is the best country ever! Palestine sucks and is gay! Palestine is not even a real country!
@@ela7893 not in the advanced economies.
Thanks for the inside reply! I found this video very interesting but I did pause at the "everything was going super but then the government slightly raised some taxes to fix things and the people went crazy and evil protesters drove the country down...." I was like, what, that doesn't sound right on so many levels!
@@imarchelloyes, in the advanced economies as well. Look up the Chicago parking meter scandal as an example
I have followed the news from this country since the protests began, and I must say that it is an absolute tragedy that the government has made absolutely no effort to reform for the greater good of the country. It is disgusting that people continue to place their own power ahead of the people's needs.
This happens everywhere, even in the western countries.
Only in the western countries it isn't as visible because you still have a job, food and electricity.
For example, you do NOT want to be living in New York City right now.
It's a ticking financial timebomb, a political clustermine and a social disaster.
Nah, New York is probably one of the few stable metropolis cities in the world, let alone North America. I would much rather live there than Paris or London at the moment. Simply put, there are levels to corruption. Having food, a job, being able to take money out of the bank, etc, are clear cut signs no where in the west is as corrupt as Lebanon.
No this doesn’t happen everywhere. This is the worst possible situation from a government that’s held hostage by external forces.
We can’t default to “yeah but this happens everywhere”
It’s so incredibly naive and plain silly to say the rest are like that in particular the west. It’s brain dead comment coming from rhetoric, not fact. But your opinions.
I’m soviet born, it boils my blood when such privileged, uneducated statements are made by people with access to knowledge and yet care little for it.
I can bet everydown to my socks that you think OUR ex soviet authoritarian regimes are similar to yours. You’ve got no clue.
The political system Lebanon uses was designed to win the peace, by sharing power between different formerly warring factions. In that sense it has been successful. Unfortunately that's pretty much all it did. It ossified social divisions and locked in patronage and clan-based power structures. There's little in the way of a 'national' Lebanese identity as a result. Sure they're not shooting each other, but everything is stuck and corruption is rampant. However changing it risks sending the country back down the tubes into full blown civil war. While their political system may be terrible for development, it has achieved what it was primarily meant to do.
as a lebanese who have been living for the past 24 years in this country, i must say that all of these problems have been publicly been warn by economists and bankers for more than 15 years, but the corruption of all the parts of the political parties prevented any serious work to improve the situation, lebanon has so much potential we just need serious leaders to make use of our resources, either the human or natural, with a large part of the youth being some of the most highly educated in the region and the newly discovered natural gas basins in our national waters we can make the greatest economical rebound to ever be witnessed, we just need a way to remove the corruption that has been rooted in our government for the past 50 years.
This is pretty sad.
Briefly dated someone from Lebanon years ago and it seemed like a beautiful place. Admittedly though when he tried explaining their political system to me, my brain just about melted. Hope the situation can and will improve in the future ❤🍀
9 4
@@ms-jl6dl6.9?
Ho3
The political system Lebanon uses was designed to win the peace, by sharing power between different formerly warring factions. In that sense it has been successful. Unfortunately that's pretty much all it did. It ossified social divisions and locked in patronage and clan-based power structures. There's little in the way of a 'national' Lebanese identity as a result. Sure they're not shooting each other, but everything is stuck and corruption is rampant. However changing it risks sending the country back down the tubes into full blown civil war. While their political system may be terrible for development, it has achieved what it was primarily meant to do.
I'm from Lebanon and most people in the private sector are earning their income in USD so we have adapted to the situation tbh. It's not as bad as it looks. People who only earn in the local currency (like public employees) are struggling.
Everything that the government used to provide has been replaced by the private sector like electricity water etc..
You guys are the new Venezuela
Well, yes.. people have adapted. But the country is still not the best place to raise a family.
Here in my country, the State provides services such as water, eletricity etc. Also here we earn in local currency but everything is dollarized
Just wait until the USA collapses.
Then private sectors will do the same there... 🙃
@@davidcarvajal5739 minus the oil benefits
As a Lebanese, feels surreal to watch my country being featured in a negative way on the media.
It has been a devastating few years but many sections of society learned to move on and thrive despite the situation, waiting for the goverment to act is futile, every individual needed/needs to figure it out themselves.
Er... it has harboured a terrorist organisation for decades. Many people don't see it that positively to begin with.
So it’s like an libertarian society. It’s sad what happened there. I understand that people adapted to it. But it seems these trends are becoming common on lot of countries.
Regrettably, the smarter, most industrious and innovative people will leave. Brain drain.
@@patrickiamonfire965 Printing money and causing hyperinflation is indeed very libertarian.
Very true. Waiting to be saved by the government will make you feel powerless.
Dude. I am just gonna go ahead to lose 50% of my economy on beer. Cuz finally, you made video about Lebanon. I have been googling "economics explained lebanon" for three years now and you have finally did it. Thank you! 🙏🏼
I've been doing the same since the protests
The elephant in the room is ignored. One of the requirements for a states is control over violence. Lebanon doesn't have that as the Hezbollah militia is more powerful then the government army and police and it's answerable only to the IRGC.That means Lebanon's government can do only things approved by the IRGC. The IRGC for example forced Lebanon to participate in the Syrian civil war, it forced Lebanon into a war with Israel in 2006 and might repeat that any moment.
From that follows a lack of investments in many fields including stable power generation. Control over economic activity and taxation are also hard when large swaths of land are under control of a defacto foreign army
And before that, parts of Lebanon were occupied by both Syria *and* Israel. Tragically, Lebanon is caught between stronger forces in the Middle East.
It’s already doom when Christianity became minority in the country. Demographic changes bring lot of changes with them.
@@Unknown-jt1jo But the occupation of southern Lebenon by Israel was in response to the state violence of Lebanon -- In 1982, Israel invaded Lebanon in response to a spate of attacks carried out from Lebanese territory.
Great points. Their constant involvement in Syrian War and their attacks on Israel is just going to draw investors away.
@@Homer-OJ-Simpson I'm not trying to assign blame. I'm just saying that being occupied by two different countries doesn't help one's economy.
Apart from the vast difference in scale, there's a second crucial factor that sets the Lebanese population collapse apart from China's. In the case of China, it's just a general decline in babies being born.
In the case of Lebanon, it's folks fleeing overseas which means a brain drain - so the remnant population will have a larger proportion of people who may not be able to fend for themselves or contribute to economic activity or government revenue.
Good point!
If the Chinese ports are freed, you will see how fast the Chinese will flee, too ! You seem to forget how China is governed.
That is a familiar Indian point of view when it comes to China matters.
Should stay in lebanon
An it's really important "religion wise". The political system was made around balancing these groups, but with the location and taking "refugees" from the region the country wreaked itself over and over again.
Specially after the >Black September< and the founding of >The party of allah< by foreighners in the country.
I only knew Lebanon as this middle-eastern country with lavish weddings. This is very informative.
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio
There are many other interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell the shares or ETFs you want to acquire.
@marykane4802Mind if I ask you recommend this particular professional you use their service? i have quite a lot of marketing problems
@marykane4802thank you for saving me backward and forward hours of researching the markets, I just copied and pasted sofia erailda sema on my browser, and her site appeared top search, no nonsense at all. She looks impeccable.
Thank you in taking part to actually review Lebanon fully, it saddens me that it had to go so far that it would be going on a channel and badly. Our country is like no else, you can go from one place to another easily and there is a lot of natural recourses, one would wish to live in Lebanon only if they can.
Neglect and laziness is what started the collapse and it will continue to be a factor that will continue its demise.
Finally a video about us. To all those just discovering Lebanon: don't let this deter you from visiting. Despite the collapse it's still a wonderful country to experience (and somehow still fairly safe despite it all) and I have yet to meet a visitor who came who wasn't charmed and didn't regret not having booked to stay longer, even since 2020. The Lebanese are a very resilient people, sometimes to a fault, and while the politics of this country are going nowhere, I've definitely seen first hand the economy re-adapting and rebuilding since 2021, albeit in a difficult stateless environment.
Except the lebanon part
As a foreigner living in Lebanon, and an avid follower of your channel, I've been waiting for this video forever! Thanks for looking at the country!
How do you like living there. I’ve considered visiting there
@@pimpskywalker3187 definitely worth a visit!
The part about people investing an increased amount of their money into waterfront appartments is heavy
But very true
One act that could have saved the Lebanese economy, and maybe still can, is to make peace with Israel. Israeli tourists aren't afraid of challenging places, especially if they are so close, and Israel would have a great interest in developing its northern neighbor. However, hatred for Israel runs deep in Lebanon, and is basically a non-starter as long as Iran is indirectly in control of that country.
Zionists have attacked Lebanon on multiple occasions. You can't have peace with an oppressive genocidal bully
That hatred have a reason
@@user-oj8sh7ur4x A bad one
I really look forward to your video on my home country, Romania. It would be interesting to see your views on the growth, IT sector and the incredible amount of corruption.
Romania and Bulgaria are still less corrupt than Ukraine and that comes from EU influence lol, I mean they got Andrew Tate easily lol
It is funny that here in Bulgaria Romania is linked with rapid economic growth and successful fight against corruption in recent years.
Your government is a corrupt puppet of western powers. The only thing good about Romania is that Andrew Tate still lives there, once he lives your country it would be irrelevant
Viva Romania
@@peterlast3200 L
Thanks for making this video!
Its crazy how many ethnic and religious groups they were able to shove it Lebanon
It's even crazier knowing most have been there for hundreds and hundreds of Years
It depends
India is united Africa but still we have stability. Now we have 0% chance of going to recession according to IMF
It's because our forefounding fathers introduced universal democracy. But now right wingers hate our first prime minister for no reason
Welcome to Bosnia and Herzegovina of the middle east
Its almost like it was done on purpose to destroy unity in the area.
@@roxasfrevr Unity? I mean which parts of the middle east are unified? It has nothing to do with ethnic and religious affiliation in particular. Cultural values play a major part.
The blast in Beirut port was a fault of Hesbollah. They were storing ammonium nitrate without any proper safety regulations.
I really love this channel. I learn things I didn’t realize would be interesting about countries that I don’t often think about.
Thanks for the awesome content and great videos!
Thanks for the good overview. One crucial thing not mentioned in the video is a specific geopolitical consequence of the complex "relationship" with Syria. The main investors and richest account holders in Lebanese banks had been people from Saudi Arabia and the Gulf states, all of which were opposed to Assad in Syria. However, the ruling power in Lebanon is Hezbollah, which sided with Assad. This did not please these rich monarchies, who basically took out their money and investments from Lebanon, and stopped their elites from putting more money in that country. This is probably the single greatest reason for the economic collapse, though it's compounded by all of the reasons you specified.
Thank you. I was hoping that this video would mention that a lot of the problems in Lebanon stem from one word: Hezbollah.
If Lebanon were a good neighbor, I'm pretty sure it could come with cap in hand to Israel, the UN, the IMF, etc. in exchange for god knows what kind of concessions.
But somehow, something stood in the way of this and that.
What is that thing, I wonder, hmmm...
Ah yes, the cancer known as harboring a terrorist organization inside a country's borders.
the country's banking system offered well-paying dollar deposits and bank secrecy. These funds were then channeled into purchases of public debt with the support of the central bank, which guaranteed the pound-dollar parity. It was a real ponzi: a system that only holds as long as new depositors arrive and serve to pay the interest of the previous ones. like all ponzis it involves a huge pile of eurodollar debt. And it couldn't last forever. So certainly, the war in Syria has accelerated the economic destruction of Lebanon whether it is because the rich of the Gulf have stopped investing in Lebanon or by the massive arrival of Syrian refugees, but that is not what caused the fall of Lebanon. The real problem comes from the Ponzi scheme
Thank you for the video. I have been waiting for a while.
Hello mate, I've enjoyed your videos for a while and I would like to suggest for a future video the Territory of Puerto Rico 🇵🇷 and its economy. Its a very peculiar one at that. A mix of Spanish and Yankee way of thinking, a complex status that makes it neither state nor country and a very turbulent economy and government.
Please. This would be cool. Being from PR, we're legitimately modern-day colony state.
That's an understatement what Puerto Rico has to go through
Not to mention the devastating hurricanes of which climate change promises will only get bigger and more frequent.
@@DrummingDrummer15 how is it a colony? Do you know what a colony is?
@kitchenersown from Merriam Webster, "an area over which a foreign nation or state extends or maintains control". From Britannica, "an area that is controlled by or belongs to a country and is usually far away from it". Cambridge, " a country or area controlled politically by a more powerful contry is often far away". I can keep going with many other definitions but I belive you get the point.
As a lebanese i have waited your vid about us for years
Finally I was waiting for this episode since forever, this channel never disappoints.
Been waiting for this video for a long time. Finally!!
The collapse began long before 2018 or 2019. The majority of Lebanon's economy was founded on tourism and foreigners purchasing homes in Lebanon. The majority of Lebanese growth was due to citizens from Gulf states (Kwait, Qatar...) purchasing extremely expensive real estate in Lebanon, which has a very limited supply and demand; and the second pillar is tourism from Gulf states, which was declining due to their own economic difficulties. of course without mentioning the corrupted political systems and the mismanagement in the first place.
The whole system was basic dysfunctional. It was a real Ponzi scheme.
the country's banking system offered well-paying dollar deposits and bank secrecy. These funds were then channeled into purchases of public debt with the support of the central bank, which guaranteed the pound-dollar parity. It was a real ponzi: a system that only holds as long as new depositors arrive and serve to pay the interest of the previous ones. like all ponzis it involves a huge pile of eurodollar debt. And it couldn't last forever. So certainly, the war in Syria has accelerated the economic destruction of Lebanon whether it is because the rich of the Gulf have stopped investing in Lebanon or by the massive arrival of Syrian refugees, but that is not what caused the fall of Lebanon. The real problem comes from the Ponzi scheme
The fact that Lebanon has been able to hold out for so long with such a corrupt and ineffective government is an achievement in itself. But this exploit Lebanon is paying a high price. It would have been better for the country if such a system had collapsed rather quickly, the price would have been better strong
As an Iranian
I’m very sorry that we had to interfere in your political decisions ,
That made a huge impact on people’s lives too
I'm so sorry what happened to your country, the land of Cyrus the Great has been taken over by evil dictators.
I hope your people find freedom
As a Lebanese, thanks for your effort but many aspects are poorly researched.
Since 2011, GDP growth in Lebanon averaged 1% until 2019 where GDP figures started to collapse.
And US sanctions aren’t really a thing, there was no US sanctions whatsoever. It happened that two banks where closed after being used for terrorism financing (that has no link to Syrian war). And the banks where of relatively smaller size (Lebanese Canadian, and Jamal Trust banks).
Your video does a good job telling that Lebanon is in crisis, but doesn’t explain anything related to that.
@@AnglersUAE that’s true. I have had the same thoughts in most of his videos covering individual countries.
Always interesting, thank you.
Very nice video Economics Explained team!
Have we had a video on Argentina yet? There's another economy in a terrifying state...
Yep. Due for an update tho th-cam.com/video/brW6-fbvmsQ/w-d-xo.html
He made one two years ago
For decades. Becomes standard, lol
Brazil🔥🇧🇷🔥
He most likely has a video template on Argentina and from time to time release it with updated figures. ;)
What makes it even more tragic is that this is the second time this has happened to Lebanon.
yesss another video from my fav channel
I found this one made me really sad. Their banking system survived so much and could have been an excellent foundation for their future. They have been pummelled with one disaster after another in a short period of time. Thanks for explaining the situation so well.
It was a very bad decision to remove the Glass-Steagall Act in the late 1990s, which led to the spectacular failure of huge banks during the financial crisis of 2007-2008. To prevent another disaster, Dodd-Frank and this statute both need to be reestablished right away. What happened with SVB is only the beginning of what will happen if nothing is done to address the current situation.
In my opinion, SVB was attempting to restructure their bond portfolio, which involved selling their low-yielding bonds despite the potential loss, and compensating for it by buying higher-interest-rate bonds on the open market.
Only a good FA will be enough to guide you through the current market volatility. I've been speaking with an advisor for a while now, primarily because I don't have the necessary expertise or stamina to handle these recurrent market conditions. The fact that I made over $220K during this downturn proved that there is more to the market than the typical person is aware of. The greatest course of action right now is to have an investing consultant, especially for people who are nearing retirement.
Right now, I'm literally hanging on by a straw, so your advice couldn't have come at a better time! I'll look her up on the internet and then give her a call.
Out of curiosity. What of the Glass-Steagall Act would have prevented SVB from collapsing?
===== JEANNE LYNN WOLF is a con artist ==============
That explosion was so disturbing
Now imagine living 1km away
I love sundays my two fave aussie youtubes you and Perun put out the best videos :D
Wow so crazy I was literally in Lebanon a day ago. I went with my parents trying to convince me not to go and had no expectations of what would happen or what it looked like. I ended up having the best time! So sad to watch and hear this, the food is so delicious, the ocean is so crystal clear and blue, the parties are fun asf, and the people were so incredibly nice. I hope this changes cause it has so much potential to be a place the world would want to visit!
A video on the risks of the US default, if they can't raise their self imposed debt limit, would be really interesting.
They’ll raise it . They are all corrupted ,All of them. Not raising it means they too will lose their fortunes as well as their ‘’Donors”. All this talk about the debt is just a cover for both parties to gut and strip medicare and social security. Under the guise of reigning in spending. lol Ffs they just approved another 1.5 Billion dollars “aid”for the war. They are a bunch of corrupt politicians. Left right and center, So yeah they’ll raise it.
“Any debt level close to, or above 100% of gdp is considered high”.
US debt-to-gdp ratio, 129%.
(Yes, i know, nobody seriously thinks the US is going to default, but still).
Alarmingly, I understand that most of the western world has debt to GDP of over 100%. But I note that China probably doesn't. I think we're in trouble.
US already pays ~15 percent of its income on interest eventually it is going to snowball and get really bad
P.S. I'm in New Zealand, which still has a debt to GDP ratio well under 100%, despite the best efforts of the current elected government over the last five years. If memory serves, that ratio has doubled during its tenure.
@Roger Gadd it's 58%. And largely due to covid. In 2019; it was at as low as 32% pre covid.
Still solid numbers and she is doing a fare better job than most.
NZ debt is different. Her issue is household debt which is 100% of GDP; not national.
As of now, she will go down a legend. Best the left have offered in the world by far since Lula's first 2 terms; and even his legacy will be questioned after his second.
@@preetjitsingh328 Thanks for your insight. I'm pretty sure that NZ would be in better economic condition now had the government not legislated that the Reserve Bank must consider employment in addition to inflation when setting interest rates. When the first covid lock down was mandated, the RB had no choice but to cut interest rates excessively, thereby encouraging private debt to be at the level you quote and ensuring that inflation is now worse than would otherwise be the case. Also, imo at least, it was fairly obvious at the time that the broad lock downs would not achieve much compared to their cost, but most of the western world is guilty of enacting the same excess.
I was wondering what is happening in lebanon during this time of crisis. Thanks for updating EE
Thank you for the video
Please do Nigeria. I want to see where we stand 🇳🇬🇳🇬🇳🇬
Not getting kidnapped or murdered
@@Mark-vn7et I don't think we're that bad na 😅
This! Nigeria is the largest economy in Africa with so much potential.
Yesss
The Prince of Nigeria
has added significantly
to the country's fortunes
(and to other people's misfortunes 😢)
As a Lebanese who's been following your channel for a while, I've been waiting for this video to drop.
it's dropped.
Finally you make a video about us. Thanks
Thank you for your video.
Finally a video about Lebanon! Thank you
As an israeli this truely utterly breaks my heart to see. The Lebanese were the people in the middle east every zionist since 1865 thought of as a partner for a better middle east. Highly educated, Life loving. Creative, liberal and intellegent.
Hate us as much as you want, i only want to tell you as long as the cedars stand tall in mount lebanon, do not give up on hope. Hope is what revives nations. Hope is what builds nations. Love to you my lebanese brothers and sisters!
❤🇱🇧❤
I'm curious. There is a scripture written about three thousand years ago that refers to permanent snow on the mountains of Lebanon. Does it ever snow there these days?
@@Roger_Gadd
Every elevation above 2500m in northern levant usually has permanent snow cover. Especially in the depressions. That includes mount hermon, mount lebanon and the anti-lebanon range (which basically includes hermon)
@@mjohn5921 Thank you. That's good to know. In case you're interested, the passage I was thinking about was written by Jeremiah, actually about 2,600 years ago.
@@Roger_Gadd As a Lebanese, it definitely snows and we have ski resorts (Mzaar Ski Resort being the largest). The name Lebanon actually comes from the Phoenician word for white, referring to its mountain. Although there was a lot of lawless construction, especially during the civil war, it’s still a very green country unlike most of the Middle East.
Why would Lebanese people be a partner in settler colonialism?
Thanks!
You briefly mentioned Malta. That would be a really interesting economy to use a subject for these videos.
Theres some strange stuff going on there.
Would you consider doing cuba a county where the government owns everything buys everything and sells everything all at fixed prices
Certainly leads to plenty of shortages
13 minutes to explain the most opaque and corrupt economy is not enough, so the channel should be excused for missing the most important factors in the story of Lebanon, including but not limited to: 1. the ponzi scheme that was practiced to attract investors to bring dollars into the country (identified by either the World Bank or IMF, and well characterized as the biggest Ponzi scheme ever perpetratd), 2. Lack of separation of Central Bank, the government, and the banking industry, 3. The money laundring that took place from 1990-2019 in Lebanon, and much more. All of these are great examples of what countries should avoid including the US>
quick question, do you mind sharing your sources, am particularly interested in the sanctions you mentioned and their impact on the country. thanks!
Hey, maybe you should use the Genie Coefficient as a factor when ranking?
Better context could be provided if you mentioned what the economy was like before the Lebanese Civil War. It was Dubai of the post World War II era, the banking center of the Middle East/Arab World and a major playground (as demonstrated in the James Bond film The Man with the Golden Gun). A brief bit of what lead to that civil war should have been included as well. Recent historical context can partly explain an economy because that can set expectations.
indeed. Lebanon has gone from a Western democracy to Islamic hellhole, falling through the floor on the Democracy and Freedom Indices, but no mention of that in the video
I dont think that lebanon is only to blame for itself. I mean sure you cant build a stable country where there are different groups of interest trying to grab more for their party, but it seems that the destruction of Syria during her civil war make Lebanese banks to lose their largest outside lender and manufacturing investment area. As a Greek i totally understand that tourism alone cant sustain high standard of living atm. Syria coming back would also help. One thing i cannot understand though is why banks just dont write down their losses and do a bail in ? Same thing happened in Cyprus and right now Cypriot economy is on a rebound.
2 things killed us more than anything else. Capitalism and Sectarianism. That first one may sound strange but when you don’t have government regulations the private banks can one day take ALL your money and you have no recourse. It’s even worse when the public banks do it as well
Because banking is such a powerful industry worldwide they are in a privileged position. They get to have their cake and eat it too, both through government support and refusing to write down bad loans. They don't think they should have to accept risk on their loans, even though it's a concept pretty fundamental to the practice, so they will squeeze their debtors for everything they have, and when they can't squeeze out any more they turn to the government and "beg" for bailouts. All other investors have to face the risk of losing their money, but banks are a protected species.
the country's banking system offered well-paying dollar deposits and bank secrecy. These funds were then channeled into purchases of public debt with the support of the central bank, which guaranteed the pound-dollar parity. It was a real ponzi: a system that only holds as long as new depositors arrive and serve to pay the interest of the previous ones. like all ponzis it involves a huge pile of eurodollar debt. And it couldn't last forever. So certainly, the war in Syria has accelerated the economic destruction of Lebanon whether it is because the rich of the Gulf have stopped investing in Lebanon or by the massive arrival of Syrian refugees, but that is not what caused the fall of Lebanon. The real problem comes from the Ponzi scheme
because it's been over 3 years and they still haven't implemented reforms
Hey, can you explain difference between your TH-cam channel and prodcast channel? I found your channel on Google Prodcasts but these videos topic are not available there.
Thank you
Yikes, thats quite a tragic story for their people
Listening to this clip, me being from Serbia, especially the explanation about 2019 crisis... High and rising debt, corruption, and rich people investing into "waterfront apartment complexes" to escape from cash, really hit me hard... Beirut was my top travel wish of all the middle east, but now I am not so sure unfortuatelly. I really wish them all the best, it is going to be rough, no doubt.
it's still a nice place to visit. I'm there now and there are so many tourists
Please don’t let this deter you from visiting us it’s still a fun place that has beautiful natural sceneries, Mediterranean weather and one of the best cuisines in the world, one of the oldest cities in the world and the list goes on..habibi come to Lebanon🥹Much love to Serbia and thank you❤️
Thank you for this, im visiting Lebanon this summer. I requested this as well. It's crazy right!?
Could you do a video on Québec? Putting it on your leaderboard
Hope they overcome this. Also do one about Bangladesh on its dutch disease of RMG and Remittance sector.
Nice video. How can countries like Argentina and Venezuela recover from their present crisis? Considering these countries were the richest countries in South America several years ago. A video on Argentina and Venezuela is required.
Venezuela will take generations to really recover to pre 1992 levels, which is still far removed from the countries prime in the 60s and 70s.
There is no economic policy that can alleviate having a government fully involved in criminal activities (such as drug trafficking) and the always worsening debt trap with China. There are literally only 2 or 3 universities that are really operative in the country. The country with the largest oil reserves in the world even has to import gasoline...
There is no way to go but abroad.
Argentina has it 'easier'.
Great video!
Please, do Chile!!
This is interesting content but please could you work on how to use intonation when ending a statement? It would really improve your videos.
Surprised the power situation was never mentioned. With out stable power or access to resources like fuel there is no way modern industry can exist
"Invaded by a nuclear (fair), superpower" - Being REALLY generous with the word "super" here xD
Maybe having as many kilotonnes of nukes as the rest of the world combined is sufficient to make it a superpower, but given that the US recently refurbished all its hydrogen bombs because they were no longer functional, we might sleep slightly better knowing that many of Russia's bombs probably would not work.
Yes, I'd classify Russia as a great power, not a superpower.
Russia has natural resources and a nuclear arsenal, plus a large (but shaky) military. But it has a weak economy, limited "soft power," anda stagnant or shrinking population.
The only current superpowers are China and the US.
Good video
Can you please do Myanmar, that would be so interesting. Love your work!!
I hope Myanmar recovers. Love from India.
0 on growth makes sense here.
I'm still salty about the 0 on the french video though.
To emphasize on banking was not the answer for Lebanon because of the outside worlds perception. Maybe manufacturing products, high quality olive oil, wine, ect would have been slower but better over time. It's such a beautiful country and I wish the people a much better prosperous future.
Low key, the Lebanon pop. graph at 8:51 kinda looks like the M2 money supply graph 🧐🤨😯
hello. Can you make a video about nepal too.
Thank you
Staying with arab countries, I believe Morocco could be an interesting case to explore in future videos.
Just a suggestion that came to mind.
Great video! Can you do an Episode about what's happening to Egypt's economy?
I was gonna post the same thing
Can you do a video on the economy of The Commonwealth of The Bahamas
Thank you
As a Person who lived through all of this let me break down how this happened.
1. Since the lebanses pound was pegged to the dollar, dollar liquidity has to be created.
2. Dollar liquidity initially came as international dept then Lebanese central bank created the BIGGEST PONZI SCHEME in the history of the WORLD.
3. Freezing dollars in Lebanese banks would net you from 8-15% annual interest rate, which is non sustainable but attracted capital from all over the world, especially Lebanese living abroad.
4. During the time of the rise of GDP, it was NOT was reflected in infrastructure, industry, services... Only used to stabilize Lebanese pound, pay of interest rates and lost to corruption.
5. Since 2016 when the Central Bank PONZI scheme was inevitably was going to fail, it started issuing warnings, non of us knew what were the warning about because everything looked fine.
6. Due to lack of liquidity and as all schemes had to come to an end, they had to choose the time to stop bank withdrawals, that was done with the protests (to take the blame of the Central Bank Actions), the inevitable crash began.
Information about all of this has been buried by Lebanese corrupt politicians (all of which have been in power in for decades) and lack of information surrounding the Lebanese Central Bank. During the period of GDP growth there was no ACTUALL investment in any infrastructure, any meaningful industries, reforms. Economically things have worsened significantly for people looking from the outside, but living there you see that the government was non existent before or after the economic crisis. Electricity is provided by private company generators, reliable internet by private small businesses, first aid services by volunteer organizations.... It has always been that way.
Growing up in the UK, Lebanon struck me as the country in the Middle East doing well for itself without the advantage of oil, and it is so sad to see that folding in on itself.
We have a lot of Lebanese people here in London and they are very lovely people with absolutely delicious food. I hope to visit someday
Israel doesn’t have oil either, and it’s GDP per Capita is the highest in the Middle East.
@@graceneilitz7661israel is effectively subsidized by the USA because we use it to project power in the Middle East, the situations aren’t comparable
@@graceneilitz7661you should thank the US for this
when a certain religion takes over an area. i dunno why everything always turns to shiet.
Yet liberals don't understand this....🤡
is there a way we can view your national economy economics explained leaderboard?
That dude on the waverider during the explosion had some of the best instincts I have ever seen. "Salma, Salma!"
Could you do video what is happening in South-Africa?
Just absute incompetence.
What happens to a country once the government dissolves as the currency is worthless?
i am canadian with a temporary visa in lebanon, have renewed and lived here for about 10 years basically, when our currency became worthless (2018 1500 lira = 1$, 2023: 145,000 lira, the salary which was about 2000$ a konth became about 100$ but increased now to 200$ and before salaries were paid in lira, but now in dollar, before, the dollar cannot be used to buy things from any store or anything, now everyone accepts and some do not even take lira anymore, everyone would try to work in a private sector (like private universities and schools because salaries are 5x more than public sectors or working for the government) and housing market fell from median house being 500k to 100k$
Lebanon is a geopolitical battlefield. No amount of sound economic decision-making was going to save it.
I remember when a fertilizer bomb exploded in Bearut because everyone was too incompetent to dispose of it
Well I hope because it only happened 2 years ago, otherwise I would go visit a doctor
I like how you try to cover all the countries, but it would have been very lovely to mention how could a coutry like this get out of its problems (at least theoretically) like attracting foreign investments due to the cheap labor, increase the exports and stuff like that. Thank you tho the episode is very accurate
Looking forward to hear about Argentina economy!
So indescript in pointing out "failures" from within.
That explosion should not be underestimated. Aside from the radiation consideration, it had a similar yield to a tactical nuke
It was Sus
The best article I’ve seen on the issue was an OCCRP report on it
Yes, albeit a tiny tactical nuke (1kt of TNT).
However, that's still extremely powerful compared to conventional ordinance. For comparison, a MOAB (one of the largest conventional bombs ever fielded by the US) had a yield of around 10 tons of TNT, or 1% of the yield of the Lebanon explosion.
I keep wondering about Lebanon’s sizable gold reserves. Why isn’t the government putting it to use as collateral to borrow against or simply selling the gold? (Needing to pass legislation to use it doesn’t seem like it would be that difficult given the situation) Doing this could bring liquidity to the banking sector or be used as a source of funding to grow industry?
i'm living here right now, and to tell you the truth, when talking about the gold reserves, no one really "knows where they are" (but the government ofc), so basically the gov is not quite transparent with us about the gold reserves
Feel like I've heard the "couldn't maintain the peg" a few times before.
The exchange rate was $1 to 42,000 Lebanon about 6 months ago. In their international air port the power just goes out.
can you do the same video about Georgia, considering russian refuges entering the country it has dramaticly changed countries economy, so id like to hear your opinion on what going on and what may happen...