Lebanon in desperate need of reform after Beirut explosion: ANALYSIS

With an economy in tatters, Lebanon's recovery will take time.

LONDON and PARIS -- The world's eyes are on Lebanon after a devastating blast wreaked havoc throughout Beirut, killing scores and injuring thousands.

But the country's problems run far deeper than that -- hyperinflation and what locals say is corrupt political leadership. On top of that, COVID-19 has seen the nation's health care system reach the breaking point, and that was before hospitals were flooded with those injured in the explosion.

The question observers are asking now, is, what's next for Lebanon?

Humanitarian aid

In the short term, Lebanon is in dire need of humanitarian aid. The death toll of the explosion, in which over 2,700 tons of ammonium nitrate was detonated at the capital's port, has climbed to at least 157, officials said. At least 100 more are still missing, and with 5,000 injuries and three hospitals non-functional, meaning the injured are having to travel as far as Tripoli, 50 miles north, to receive treatment.

Beyond the clean up now underway, at least 300,000 have been left homeless, 80,000 of whom are children, according to UNICEF. The port of Beirut was Lebanon's principal economic hub, and it is now completely destroyed, and the explosion itself has wreaked havoc across much of the city.

All of this has taken place in a country of 5 million people, 1.5 million of whom are Syrian refugees, and recently became the first country in the Middle East to enter hyperinflation. The result has been a sharp rise in the prices for goods and services over the past few months, making basic goods unaffordable, even for traditionally middle class Lebanese.

Much needed international aid began pouring in on Thursday. The U.S. has pledged to provide at least $15 million to aid the disaster recovery, French President Emmanuel Macron arrived on planes carrying firemen, equipment and investigators on Thursday, and Jordanian medical workers are setting up field hospitals around the blast site. Even Israel, Lebanon's historic rival, has pledged assistance, which the Lebanese government is yet to accept.

Political reform

But even with Lebanon in such dire need, protesters who confronted Macron after he arrived in Beirut on Thursday with the promise of "unconditional aid," had a stark message: "don't give the money to the government."

In reply, Macron could be heard saying, "No, I want it to go to you, to the NGOs, under the supervision of the United Nations. ... But we also need to change the political system."

Eric Verdeil, a researcher at the Political Institute in Paris and specialist of Lebanon, told ABC News that democracy in Lebanon is based on community and religious representation but "rests on elites within these religious communities, which have a great economic power."

"Corruption is embedded in the Lebanese political system, which is bolstered by the support of the international community," Verdeil said.

According to Paul Salem, the President of the Middle East Institute in Washington DC, the humanitarian aid that is coming is different from the financial aid Lebanon is expected to receive from the International Monetary Fund (IMF), which will be conditional to reform. Negotiations with the IMF for a bailout of the Lebanese economy, however, are currently at a stalemate.

"The IMF's help would be $1 billion, and if you add international support from US, Europe, maybe Gulf countries, could halt the downward slide of the Lebanese pound," he said. "Through an internal deal with the banks, which could deliver some liquidity, it would give some breathing space for the Lebanese. Then bigger negotiations would take place with bigger reforms expected, in exchange for another $10 billion from the IMF."

But that much-needed financial aid will come at a higher cost than before, Salem said, as there has been a "shift both in Washington and Europe after the blast."

"The international community is not going to spend billions of dollars to the President [Michel Aoun] and his son in law who are linked to corruption and now criminal negligence," he said.

Macron said at a press conference on Thursday that the Lebanese government had until Sept. 1 to come up with a plan for change, but he warned that change would "not come overnight."

"I will fight for international solidarity to be there," Macron said. "But I cannot substitute the sovereignty of a sovereign elected government, a sovereign elected president."

Protests continued overnight on Thursday and all the way through the weekend. With calls for regime change, protesters are placing the blame for the explosion at Beirut Port firmly on the leadership. Indeed, the ammonium nitrate left in the warehouse that exploded had been lying there for years, staying untouched since 2014, when a ship carrying the cargo was impounded at the port.

Protests in October 2019 toppled the previous government, but many of the same institutions remain intact, and many Lebanese are now calling for a more substantive change.

"The protest movement was planning major strikes before the blast happened," Salem said. "They had slowed down, and [were] confused and disheartened, partly because of COVID, but the blast has really accelerated the urgency. The movement is going to be calling for massive protests, nationwide strikes, the resignation of the government. They will call for the president to resign, things of that nature … At least a government change is in the offing."

Long reconstruction ahead

Even with reforms and the international community's help, the reconstruction of the blasted port will resemble that of the shattered economy, it's going to take time.

The port was the main artery for incoming material to the country, which included urgent supplies, medical supplies and grain, which have to be immediately replenished. Lebanese economic Roy Badaro estimates damages of $3 billion in direct losses from the blast. The port's reconstruction will be a huge undertaking with important geopolitical implications, as foreign powers, including China, compete to invest in the new Beirut, Salem said.

Many businesses were destroyed in the shockwave from the explosions, adding to already high rates of unemployment.

"If you have good growth, it's going to take five to eight years [for the economy] to get back to where it was in 2019," Salem said. "But the key is not to get back the numbers from 2019, but to rebuild the economy on proper foundations… we want to build something new, and better. Even if for a while it's poor."

Lebanon's economic and political crisis has been years in the making. Yet while the nature of the international agreements that will help ease Lebanon's crisis are far from clear, the question of the recovery will hang over the country long after the debris has been cleared from the streets of Beirut.

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