In the thread below, I'll highlight some additional insights from the comments below and credit those who made them. By the way, if you like this style of research about economics, consider supporting the channel by buying me a 'coffee' via ko-fi.com/moneymacro or gaining acces to an exclusive Discord community via Patreon: www.patreon.com/moneymacro . Although, if you have relatives or friends in Lebanon, it is probably better to support them instead. Please don't comment on this thread.... I try to read all comments and want to keep this thread clean to provide an overview.
As users like @starfthegreat mention, there is a lot of outside influence in Lebanon from countries like Iran, the UAE, the US, Syria and others. Lebanon's economic prosperity is often not in the interest of these parties unless the party they support dominates.
Users like @la have mentioned that I could have gone more in-depth on the role of the specific sectarian groups. Especially, if they have a large militia (kuch Hezbollah). Sadly, I couldn't find reliable data on how big the influence of the specific groups are.
User @Yari Az Quran pointed out to me that around the start of the crisis when deposits were already leaving the country rapidly, the USA hit Lebanese individuals (related to Hezbollah) with sanctions as well as some of its banks. I found the argument compelling that the last part (hitting the banks), while not a root cause, probably also accelerated the crisis (much like the explosion).
I mentioned in the video that protests started in 2018. But, the main protests part of the October revolution started in 2019. As pointed out by user @LeboPlays , this is important because how I phrased it might imply to government directly resigned after protests while it took a year in reality.
ahhh okay... haha I saw your earlier comment and was already responding to it... But, thanks!!! Desperate times for such a beautiful country, I really hope the situation will turn around.
@@MoneyMacro As a lebanese the only solution is assassination of all politicians + president and few midgets with influence over certain people... This has been going on for 30 years internal plus external corruption,bribes,dissapearances,cold cases .... The big countries are playing football and we are the ball. :)
Is there something you guys can do to steer clear of the regional conflicts and focus on putting yourself in the Swiss category of neutral countries? That will go a long way you know.
@@MoneyMacro I agree! Much better than Economics Explained (annoying for not only his rapid fire dialogue and simplistic views, but that annoying Aussie accent) or that Bald Dude with the beard, who's got something like 3 RUclips channels with over 1m subs each who thinks the same annoying music makes his content hip and discernable for the ill informed, wrong! Keep up the good work man!
@@Telluwide but this video's pacing is too fast for my taste, and also too much stock footage for mundane words that doesn't need a visual representation.
As a Lebanese living in Lebanon i agree with everything you said minus the part where you said the lira deteriorated to 1$=10000 LBP, I miss those times, now its double that 😢
@@kipweit9634 kinda bad the country is beautiful the nature the landmarks there r nice but living there is rlly bad there r protests many ppl are starving and most of the people are poor because of corruption and polatics
I'm a Lebanese and i wanna say u did get a lot of things right and most accurate thing u said was that they should not distribute the power based on religion rather than choosing who knows the subject of the matter...
Something you’ve missed: The low to almost nonexistent amount of US dollars in the Country, meaning they’d have to print more L.L. to buy products, which would in turn cause inflation, which is also why this crisis is so terrible to all social classes, since the country has gone into deadlock almost, where there lacks nutritional and pharmaceutical needs and gasoline as well. Thanks btw for shedding light on this tragic crisis
As a lebanese speaking from Lebanon right now the Lebanese lira stands for 19,500/ 1$ and 24 hours without electricity i can insure that the wound of the bleeding is being ripped open
@@aiaivivi8286 the vast majority of Lebanese are strongley against Israel any deal with them is called "tatbiaa" this word is so bad in Arabic world like the word "racism" in the west is. anyway no one trusts Israel here if it helps Lebanon today no one knows what is the political sequences will be tomorrow.
Great video. As a Lebanese living in the Netherlands, I think you really caught the details of the situation in Lebanon, as for a foreigner it's usually difficult to understand what is really happening. So thanks!! Big fan of your channel.
Thanks!!! I'm very glad to hear that because this is something I was definitely worried about. I tried to use local sources (from local academics, central bankers, and bankers ) wherever possible. But, it's always tricky as a foreigner. Especially if you don't speak the language.
@@MoneyMacro As far as I know, one way of HEZ to finance itself is to sell (used to be) subsidized fuel to foreign buyers (mainly Syria) and thus earnings lots of money. I truly wish that the Lebanese people would somehow overcome this crisis, but unfortunately, HEZ won't give up power (some say it is intentional, so gain total control) - so more likely another Venezuela is forming
Just discovered this channel and am addicted. Love your straightforward, simple explanations but also leaving the discussion open. I also love how, like someone else said, don't focus on hype, hyperbole, or psuedoscience to make your points. I think it's very important for everyone to understand Economics more in today's world, but is getting harder because objectivity is getting harder to find. Thanks again!
Fighting the elite will never end because they are allways replaced with new one ... as corrupt and anti-social psychopats like them bevore. Ok ... change the system ... is no solution at all ... they changed to more subtile methods ... but not the results for the elites ... EVEN in the "democratic" countries of the west.
I’ve always been curious wanting to know what lead to the economic collapse of Lebanon 🇱🇧 since I heard about it this year because of that explosion💥. I finally learnt and understand how and why it happened through this explanation @ money & macro.
Very instructive video. As a Lebanese, who is living in Beirut, I can say that one of the major factors that led to the economic crises is the decree-law concerning “exclusive dealership” on importing specific products into Lebanon. This decree-law dates back from 1967, and gives exclusive permission to a designated dealer to import specific products into Lebanon. For exemple, only one agency can import Toyota cars, only one dealership imports Apple or Samsung products... This clearly hurts the pronciples of capitalism and free trade, knowing that Lebanon adopts a liberal and a capitalistic economic system.
@@MoneyMacro As you said it massively reduces competition, the 2 main reasons Lebanon is facing a crises are these “exclusive dealerships” and tax evasion, even with the inflation. Note that Lebanon’s budget and our state’s resources do not take into consideration the devaluation of the Lira. (We still pay taxes on a 1$/1500 LBP). So here is another reason why the Lebanese state is becoming poorer and poorer.
ah no I don't agree. if lebanon encouraged competition then imported goods would become temporarely cheaper, thus further increasing the amount of imports and killing any locally produced goods. The results of that would be a faster fall for the Lira. So increasing competition for imports would have accelerated the process not stop it
@@destroctiveblade843 If Mr. Joeri agrees, we can have a whole discussion regarding local competion in lebanese law, and how exclusive dealerships were killing local industries.
You have to realize he knows what he is doing but he is extremely corrupt right now he is just stalling time my only hope is that he wont be able to stall for much longer
Cheers from Jordan (I hope we don't have to go through the difficulties our brothers are facing in Lebanon but we are not far from it and nothing is impossible in good old ME) Thanks for this very informative video. It sounds that as impossible as it is, you were able to simplify the Lebanese scene. May I ask you to ols make a video about what you mean by debt restructuring in thr Lebanese case? It seems to me that that economy and lira cannot hold that either
I am a student of international politics who's focusing on this topic to study the main causes and consequences of this tragic crisis in Lebanon. Your video was really helpful and well done. Thanks a lot, really appreciated it. And I send a huge hug to all the Lebanese people who are facing this tremendous situation.
Spot on. I am Lebanese, grew up here in the 80s and 90s, worked since around the world and now been here for 3 years. My intention was to stay in Lebanon and retire but due to the crisis lost my savings and now a have to leave the country again to try to save for retirement. A note: the corruption is deeply rooted over decades and dispersed across 6 or 7 corrupt criminal tyrants each have the support of a different foreign country. So the political reform is pitting the revolting Lebanese against the world. This is the first time in my life I feel hopeless and sad as in mourning. Note 2: we have to support our families by remittances but the government is built over decades on creative ways of stealing and gutting whatever comes into the country. Therefore now we only support by the minimum amount required and most cases will have our parents and relatives leave to stay with us wherever we find jobs.
amazing video, a brief historical review supported with analysis for the reasons behind this huge depression, and undersetting the complexity of the socio-political corrupted system that is protected by the religious parties is the most effective one. the missed part is : there are a lot of smugglers to Syria that increase tax evasion rates; and over more than 30 years the Lebanese governments didn't invested in a productive sectors as industrial and agricultural. It only depended on the tourist and service sectors that makes the economy prosaic. Thanks for this amazing video.
Another thing that should be mentioned is the deteriorating relationship between Lebanon and the UAE and the KSA. Both house huge Lebanese expat communities who send crucial remittances back to Lebanon. However relations started to deteriorate in 2011 when Lebanon and the Gulf states found themselves backing different sides in the Syrian Civil War, and Lebanese expats in the UAE and KSA bore the brunt of it. Many were expelled back to Lebanon, many Emiratis and Saudis emptied their bank accounts in Beirut and it became harder for Lebanese people to expatriate themselves in those countries. Recently the UAE and KSA banned the import of Lebanese fruits and vegetables following the discovery of a shipment of captagon hidden in imported Lebanese pomegranates.
It wasn't because of the Syrian Civil War‚ it was mostly because of Hezbollahs control over Lebanon‚ Hezbollah acts to further Iran's influence while Gulf states want to battle it. The reason a lot of Saudis and Emiratis emptied their bank accounts was also mostly due to the economic regression of Lebanon‚ investing in Lebanon was seen as a huge chaotic mistake.
@@bonafidemonafide7810 Yes the deal we either support ISIS and Al Nusra terrorists , or we face punishment. And you blame Iran, when the real issue is that the KSA was offering a fucked up deal to begin with.
@@themanbehindthescreen8226 Thats not the deal offered. Stop sending drugs to other country's. ISIS and Al Nusra dont exist anymore‚ only remnant surrounded groups remain. Austria and Germany both found shipments of Captagon coming from Lebanon. Egypt‚ Saudi‚ and the UAE all found Captagon aswell. Its been like that for years‚ no one wants a drug dealer as an ally‚ im sorry about what happened to you but as long as a terrorist group controls your country you cant blame others for not wanting anything to do with you. And yes‚ I do blame Iran‚ Nasrallah himself admitted to being a tool for Iran and carrying out their orders.
@@themanbehindthescreen8226 Hezbollah kills opposing politicians, smuggle goods to syria, destroyed relations with the GCC who basically carry the lebanese economy based on foreign injection of dollars mostly coming from them. That’s without mentioning the disastrous default Hezbollah’s government decided upon. Once Iran leave the country everything will go back to normal. How exactly is KSA responsible for our crisis when you’re literally fighting them in Yemen? You want them to support you whilst fighting them? 🤣
@@bonafidemonafide7810 i am not a Hezbollah fan at all but I also disagree with the notion that Hezb "controls" Lebanon. Yes Hezb is a major political and military actor in the government but it functions through crucial alliances with other actors (FPM and Amal for example), and those other actors also have a very large say in the country's politics. For example it's not Hezbollah who decided Lebanon's disastrous economic policy, however it has provided muscle to protect the interests of the rulling class during the 2019 and 2020 protests.
I’m about to do some research for my graduate degree on the political economy of Lebanon. It’s so complex and intersectional. This was a really good video.
11:20 is the real cause, also a small correction this was based on Taif convention which was a temporary suggestion (1-2 years if I recall) to push peace talks forward, but that never happened and the Lebanese govt. kept the structure going to date.
Very good video that accurately isolated the problems and discussed them in a balanced and reasonable way. Too many Lebanese have the tendency to blame specific internal or external actors for their problems while turning a blind eye to the damage their faction caused
One theoretical solution would be for France to reannex Lebanon, which was actually proposed at one point (mostly as a joke of course, but still somewhat seriously by some). Now that would be "the french way"!
Pitchforks against the elite are easier in a homogenous country... In a place like Lebanon.. it is far too easy for the elites to scream "oh no the Hezbollah supporters are attempting a couple detat" or "oh no the Christians are taking over" or "oh no the sunni ISIS is in Lebanon now" and then quickly turn what was started as a revolt of the people into a sectarian war.. just like in Syria.
Dr Schasfoort is an exceptional Economics teacher, providing well thought-out content as clearly and honestly as possible. What a privilege to watch this channel.
I hope all of this ends and lebanon regains its power. Literally a loss to humanity. Sending love to all lebanese people from Egypt 🇪🇬✌️❤️🤝🇱🇧 in sha2a allah tet7al w yerga3 lebnan zay el awel w a7san❤️ الشعب اللبناني معروف ب قوته و صمده في الازمات و عدا ب ازمات كتير ا و قدر يعدي منها و يرجع يقف على رجله سامخ ، ربنا يصبركم و تعدي الازمة دي و ترجعو لحياتكوم الطبيعية❤️
I am Venezuelan and my country happened the same that lebanon with the factor of plump of oil prices that are our 90% incomes, the government since 2003 also pegged the Bolivar (our currency) with the dollar, 4 bolivars per dollar, Killing the exporter sector altenative of oil, and promoving importing, also the same government was one of the principal importers, we had 5 tipes of currency exchange in 2013, and we have in 2018 1.000.000% of inflation.
@@danielramirez8298 we are on the same path, they keep printing money to pay people's wages, there is no plan to solve anything, the minimum wage used to be 450$,now it's 35$,prices are skyrocketing, illegal petrol export to syria continues while people are killing each other on the gas stations to get few liters, lots of the educated lebanese people used to go work abroad and send fresh dollars to the country, now we are considered terrorists for some political reasons most of us know nothing about..
As an Israeli I feel bad for the lebanese people. People of all ages and races are starving, lacking basic needs, with barely any hope for a brighter future. All of this because of a government that doesn't do the one thing they suppose to do? Take care of your people, is that so hard? Any lebanese can confirm someone at least show some care? Everyone said "ohh, the governing body of my country sucks" while Lebanon's government is pretty much not even there so people will say they suck.
@@محمدالحربي-ط9ح4ب A. They don't kill innocent people or at least don't try to. "Why?" have a very simple answer: because why? There is nothing to gain from killing innoncent people, so they don't kill innocent people. B. Innoncent people do die and this is what triggers people. This is where we need to tell the difference between the West Bank and Gaza. Gaza is controlled by Hamas who are a terrorist group and use innoncent people as human shield. You can find videos proving it all over the internet. The West Bank is a different story as innocent people are literally trying to kill people on the israeli side. Unlike Gaza, they don't have as much access to weaponry and people there have better life than those in Gaza. There are videos of palestiains running with a knife trying to stab soliders or israeli civilians. One of the issues is that some of them are kids charging on people with a knife. Morally, you don't suppose to shoot a kid, but what will you do if a kid is charging on you with a knife and ignore warning shots? C. Media filters what is actually happening and doesn't tell the whole story, only parts of it. You have no idea how much of a minority terrorists of both sides are. D. If Israel is commiting genoside, tell me how their population is growing like any other country?
isreal still tries to bomb Lebanon every while. also isrealis put underground bombs (I don't know what exactly you call them) and they won't give us the map of where they planted them people still die because of it
Ahna lezemna nvotiw pour des politiciens responsables, andhom programme w surtout courage politique. L'intégrité seule matsalla7ch l'économie. Ce qui est triste 3anna potentiel économique énorme accablé par des lois archaïques et bureaucratiques mais surtout notre économie de rente. lezem on démarre les réformes et il faut libéraliser notre économie pour qu'on puisse créer la richesse et puis on discute comment les distribuer. Une démocratie sans économie libérale ne vaut rien.
France tried to help lebanon by giving euros, dollars, medicines, computers to the goverment and told them to give it to the people and the goverment did nothing they just kept all the stuff france gives to them instead of building more hospitals they just steal
@@ratie2573 I think the reason why france backed down from giving us money, is because the french people turned against them and claimed that the lebanese government would steal it all just like they did for the past decades, and honestly they are not wrong think that.
Very simple solutions every economist know but very painful to do. Float the money and immediately it falls off the cliff before it eventually recovers, if it recovers.
Having lived in Lebanon since 2009, you made no mention of the illegal capital control law that seized and refused to give back peoples deposits. Life savings are trapped in the bank and we have no access to withdraw our funds.
Very informative video, since things move fast in Lebanon, a lot has happened since you made this video. It is probably time to upload an update of the situation there...
Good analysis, the core issues are mostly very well laid down and discussed, narrative is not 100% correct, but this is not an issue, very good work. It would have been great if you tackled a bit more deeper the flaws in the attitude and mentality of the population (not only sectarianism) like the pervading self interest, lack of communal sense and ethics, lack of allegiance to the country. For most lebanese, lebanon is a hotel, they may not say so explicitly but their behavior betrays the way they perceive see this construct called lebanon. The person writing thee lines is a lebanese living in Lebanon. Keep the good work going
this lack of communal sense and ethical traits paired with the sectarian system is the result of the horrible government. Many people forget that no one chose the corrupt officials other than the Lebanese and everyone knows that any average Lebanese person in their positions would do the same.
"Economy doesn't operate in a vacuum" Oh, finally. It only took a couple of hundred years and three global economic crises for today's economists to notice that there are political institutions and political feedbacks too
Amazing and educative video!!! May I recommend you please do a video on Algeria. It will prove to be challenging for you to gather academic sources as well as putting a cohesive video that'll explain everything to viewers like this one.
pretty accurate, thank you for the quality content. i was pissed off by the optimism in the first half, then your reality check on politics came. anyways the exchange rate is at around 19,000LL for 1$ today. i was studying at candlelight yesterday because we don't have electricity. i was grateful that there weren't 3 hour lines at gas stations today. next wednesday marks the first year after the beirut explosion with no accountability or consequences whatsoever because the mafia-like organizations that call themselves a government keep protecting each other. lebanese people suffer from so much burnout and trauma, and it's only gonna get worse. i hate the ruling class.
This was great! I was going to say it would be very interesting to hear your take on South Africa's economic problems, but it's kind of the same thing: at root a political problem.
As an Israeli i knew most israelis would like to help lebanese people. one way to solve the problem is make peace between israel and lebanon. israel now has the strongest economy in the region, but the prices are high. so israeli peope would like buy cheap things from lebanon - and that will lead to alot of foreign money go into lebanon. also - peace with israel would make it easier to transfer logisitic to jordan and egypt and even saudi arabia and UAE - because the new railroads that connect all those countries.
Peace with Israel is peace with war criminals and ethnic cleansers, Israel is an apartheid state, Israel used white phosphorus bombs in the last war on Gaza to kill civilians, especially children, and they were not human shields as Israel claimed since they didn't shown evidence, some idf soldiers have told that they were mindlessly bombing everywhere because they couldn't find Hamas.
The exchange rate is fluctuating at around 23,000 L.L. and its only getting worse. as you've mentioned in the end of the video ,this economy crisis is due to political reasons ,corrupt politicians, being divided on Religious bases not only in politics but in every detail of our lives adding to that external interference of tens of countries who have Regional political goals to put pressure on certain parties or to impose dominance ,or having some greedy interest in our country's resources, even having their own wars and our land being their war field so they could have their battles. Whats going on is more than just an economic crisis its more like and economic poltical war between certain and well know parties for well know reasons . Great video tho sending you all the love from lebanon dude
between the Phoenicians being the masters of the Mediterranean Sea, to this... what happened to Phoenicia! get well soon Lebanon :( sending love to Phoenicia
Nice video, and the fact that you attributed the main cause of the crisis to the politicians was spot on. The thing is that your suggestions for political reforms are good in theory but i don t see them applicable cause the problem is that people sees everyone corrupt but their leader and even if chaos starts they ll be willing to protect their favourite politicians but who knows... Greetings from lebanon
@@wavemaker2077 well, atm i see only one solution for short term and it s that a western neutre country take over for few years establish some good bases, change some corrupted laws and put some new talented faces to rule so we can see their efficacity. Maybe also throw in jail some of our corrupted leaders (but it's too good to be true last one.) Anyways i don t see it happening anytime soon and all the other options i don t see them working for a short term, maybe things ll get a bit better but we ll still be in the hole. Anyways no one knows what the future holds hopefully i am wrong
@@carljalkh9778 Maybe the UN can do that. I don't know if it is possible to petition the UN to manage the country for a few years just to let it get back to its feet. Maybe a big clamor from the Lebanese people can persuade the UN to do it.
@@hx0d You mean Venezuela style? Venezuela was sanctioned and the government officials are barred from entering the US so that they will resign from their position. Yeah, I guess this idea will work in Lebanon.
@Masquerade not if you know its history and culture and you ve done your homework before you go. If you go randomly just because you ve heard about it and you look for beer and fun only then it’s not for you sorry.
Absolutely brilliant video! The one thing i would like to add is that many of the religious factions you mentioned are influenced and financed by Iran and Saudi Arabia whom are fighting a proxy war in Lebanon. This makes it even less likely for the interests of the political elites to get more aligned with those of the country. Sadly, therefore the already incredibly complex situation becomes almost impossible to fix.
This analysis includes many of the factors for Lebanon's collapse, but it overlooks one of the most important: sanctions. In 2019 the US Congress passed the Caesar Act, which imposed an economic blockade on Syria (like the US economic blockades on Cuba and Venezuela), which threatened secondary sanctions on any foreign government or company that trades with Syria. As Syria's neighbor, Lebanon obviously did a lot of trade with it, but much of this was forced to stop by US sanctions. At the same time, the Trump administration imposed sanctions on many Lebanese officials and political institutions. These sanctions were repeatedly expanded. Obviously the threat of secondary sanctions and further sanctions in the future leads to over-compliance, which makes it difficult for countries to attract foreign investment and encourages capital flight by pressuring any current foreign investors to withdraw from the country. It also makes it even more difficult to obtain foreign currencies, especially for such import-heavy countries like Lebanon.
Would more government spending, regardless of if it was spent productively or not, just exacerbate inflationary forces and kick the economy whilst it is down and potentially open the door for another default? Would the more viable solution not be just to pull cut overall spending and divert essential services to private market or lower levels of gov.? I understand the arguement but I don't think the solution is to assume that the Lebanese gov. can or should be trusted regardless of wider changes to change its.
Fair point. As you note I'm not arguing to increase gov spending. But true especially when doing it to those who need and are most likely to spend it most it could lead to more inflation. However ... In a crisis like this I think there are two opposing forces debt deflation and exchange rate inflation. So, therefore I think it's safe to keep spending on essentials.
@@MoneyMacro The government could also spend more in areas or industries that will bring more foreign capital and industries that substitute foreign goods hence saving on foreign capital.
mate, loved the video, you're pumping out heaters with every release. however, I do want to mention that often during strife, the first shot of the next war is taken (long) before the last round of the previous war has been let loose.
Comprehensive video, thank you. However, we should speak also about the fact that those "private banks" lend the majority of their funds (deposited by the diaspora) to the failed governments with the hope that they will get back unrealistic margins back (up to 17%). It's a shame and horrible management by those banks, whom the people trusted, to blindly lend all these funds to such a corrupt government all the while not caring if this money will ever be returned to their owners..
@@toobalkain Not specifically. I am an Expat living abroad who chose to put my funds simply in the banking sector of Lebanon (did not receive any interest, it was simply a storage option, chequing account). Like all people, all of a sudden my money disappeared because the "private banking" system is incompetent enough to go and lend all funds to the corrupt govt.
@@bahabalaa1421 yeah, there must be millions of personal tragedies of people and families who lost money to the scam that is the Lebanese banking system but I would imagine most from the diaspora were attracted by high interest rates, I mean, Lebanon is notoriously corrupt, most people probably wouldn't have chosen a Lebanese bank otherwise. Do you still harbour hopes of some day being able to recover your funds?
@@toobalkain The high-interest thing is true but it is on a macro scale not micro. I mean the banks feel for the trap of high-interest rates way more than actual individuals. The banks gave all the money deposited by people to the central bank which promised to give back high interest only to be bankrupt a couple of months later. Individuals on the other hand deposited there because we were under the impression that keeping your funds in Dollars in private banks is safe just to freeze them there (not with the intention of making millions on interest). I am not sure about a viable solution to be realistic. The government officials should put a plan to return all these funds gradually over the years and obviously cutting back on the budget deficits.
@@bahabalaa1421 I was under the impression that the commercial banks were offering 7-15% p.a. on deposits for years and that that was the reason money was pouring in, there are channels on youtube that explained the default like that, are they wrong?
Great video, Also I think that one of the things Lebanon can do is cut taxes for corporation in order to attract foreign companies that will pay employees with cash dollars, is that a good idea? Because I cannot see another way for Lebanon to attract businesses, obviously you know about that more than me
Thanks!! I agree that attracting productive businesses would be a great help for the Lebanese economy. I doubt blanket corporate tax cuts are the way though. As far as I know, corporate tax rates are already quite low (17%). Compare that to neighbouring Israel, where many corporations are located with a 23% corporate tax rate. There are many factors that go into making a country a good place for business. In this case, would taxes be the main concern for companies? Also, I wonder if the government can miss the initial revenue loss of cutting taxes. For these reasons, I would prioritize improving the functioning of basic government services, infrastructure and reigning back corruption (which can be quite expensive for businesses, like a hidden tax). One thing that might be possible on the tax front, is having some initial tax breaks for new companies, these won't cut into existing tax revenues. But, these have to be very carefully designed so that they cannot be misused for corruption.
@@MoneyMacro agree with you on this one. one of the main concern for business is safety. it's useless to have 0% tax if there's way too large of a chance your business office will be bombed to smithereens next morning.
@@danielblue4460 Brother I respect what you believe. I am Muslim. We Believe in the Gospel revealed TO jesus. Not your bible written by the companions of Jesus PBUH. Those texts are corrupted by man. The True Gospel that was preached BY jesus has the same Message as the Quran. Not Son of God blasphemy. Jesus peace be upon him will return IN Syria to a town near Damascus. Not In Jerusalem. There will be destruction in all of the Levant when he returns. Damascus will be in ruins but so will Jerusalem.
@@JJs_playground fairy tails? 😂😂 God I would love to see your face on the day of judgement. Weird how these fairy tails all have scientific evidence behind them? Or are we just going to skip over all the things Proven by the Quran 1400 years ago. Like the Human embryo as 1 example.
Hey! Just a little clarification. It is spelled Maronite, not Marionite. The word Maronite comes from the Syriac Christian Saint Maron. Thanks for your great video. Waiting for the next one on Lebanon. Cheers!
You ignored Hizbullah and its affiliation to Iran which made foreign aid difficult to obtain + US sanctions on Lebanese entities + Hizbullah involvement in 3 countries (Syria, Yemen and Iraq).
Hezballah wants to free Palestine and the US doesn't want that, so they weakened the economy and prevented Lebanon from becoming a highly developed country to weaken Hezballah to prevent them from destroying Isr*el and free the holy land and return the palestinians to their homes. Basically, Isr*el's existence is a source of trouble in the middle east. This is why Hezallah exists, because of isr*el. And the west will do anything to protect this illegal settlement state even if it envolves ruining other people's lives. This shows how cruel the west is.
Oh yeah i also forgot, they go to syria to get rid of the ISIS that was assembled by the US and europe, and went to yemen to prevent saudi attacks on them.
nah, the reality is lebanon is a land of a proxy political war between Iran and Saudi Arabia with a pinch of interference from Turkey, France and Israel. These countries basically give support for the political elites. And when their interest clash it is guaranteed there will be no political stability in Lebanon. Which in turn, brings corruption and economic ruin. The worst part is, because of religion the people of Lebanon depending on their sect welcome that foreign interference into Lebanese politics. For example, shia muslims welcome Iran's interference. Sunni muslims welcome Saudi's interference. Maronite Christians welcome France's interference. Then you have the separation in the same sect. There are Sunnis who prefer Turkey over Saudi Arabia. And you have Israel whose mere existance and threat of war gives Hezbollah (Iran's hand in Lebanon if you will) a huge public support. And the minority who knows the situation suffer the most, the only solution being is leaving the country all together, and you can imagine what a hard decision that is.
@@mohammadibrahim3068 you know nothing of Lebanon 🇱🇧 “a land of proxy political war” .... this all starts from the illegal occupation of Israel. Open you’re eyes.
In the thread below, I'll highlight some additional insights from the comments below and credit those who made them.
By the way, if you like this style of research about economics, consider supporting the channel by buying me a 'coffee' via ko-fi.com/moneymacro
or gaining acces to an exclusive Discord community via Patreon: www.patreon.com/moneymacro . Although, if you have relatives or friends in Lebanon, it is probably better to support them instead.
Please don't comment on this thread.... I try to read all comments and want to keep this thread clean to provide an overview.
As users like @starfthegreat mention, there is a lot of outside influence in Lebanon from countries like Iran, the UAE, the US, Syria and others. Lebanon's economic prosperity is often not in the interest of these parties unless the party they support dominates.
Users like @la have mentioned that I could have gone more in-depth on the role of the specific sectarian groups. Especially, if they have a large militia (kuch Hezbollah). Sadly, I couldn't find reliable data on how big the influence of the specific groups are.
Also, thanks to @Mikal Aboujaoude, I misspelled Marionite ... it should be: Maronite
User @Yari Az Quran pointed out to me that around the start of the crisis when deposits were already leaving the country rapidly, the USA hit Lebanese individuals (related to Hezbollah) with sanctions as well as some of its banks. I found the argument compelling that the last part (hitting the banks), while not a root cause, probably also accelerated the crisis (much like the explosion).
I mentioned in the video that protests started in 2018. But, the main protests part of the October revolution started in 2019. As pointed out by user @LeboPlays , this is important because how I phrased it might imply to government directly resigned after protests while it took a year in reality.
As a Lebanese, I was gonna say that your solutions are a bit too optimistic, but your comments at the end were spot on. Very well made video.
ahhh okay... haha I saw your earlier comment and was already responding to it... But, thanks!!! Desperate times for such a beautiful country, I really hope the situation will turn around.
@@MoneyMacro make video about the golden age in 50s 60s 70s
@@MoneyMacro As a lebanese the only solution is assassination of all politicians + president and few midgets with influence over certain people... This has been going on for 30 years internal plus external corruption,bribes,dissapearances,cold cases .... The big countries are playing football and we are the ball. :)
Is there something you guys can do to steer clear of the regional conflicts and focus on putting yourself in the Swiss category of neutral countries? That will go a long way you know.
We Nigerians face the same thing, a suicidally negligent and irresponsible elite class.
Finally an economics channel that isn’t either incredibly simplistic or straight up pseudo economics
Thank you!! That is the goal.
@@MoneyMacro Can you consider a video on Britain's Singapore on thames plan or Global Britain and the chances of it succeeding/failing?
Not to mention fast spoken edited to the shit house...
@@MoneyMacro I agree! Much better than Economics Explained (annoying for not only his rapid fire dialogue and simplistic views, but that annoying Aussie accent) or that Bald Dude with the beard, who's got something like 3 RUclips channels with over 1m subs each who thinks the same annoying music makes his content hip and discernable for the ill informed, wrong! Keep up the good work man!
@@Telluwide but this video's pacing is too fast for my taste, and also too much stock footage for mundane words that doesn't need a visual representation.
As a Lebanese living in Lebanon i agree with everything you said minus the part where you said the lira deteriorated to 1$=10000 LBP, I miss those times, now its double that 😢
It's gonna hit 20 today
He did say as of today. This video was done in April 2021.
الله يعينكم 💔😪
The black market exchange rate is now 20000😅
@Obfu Scate you missed a zero
As a Zimbabwean all I can say is good luck, you are going to need it.
damn i felt that
Please tell me this will come to an end at some point... :(
@@danasakr3671 How is life there?
Deep And Dark 😂
@@kipweit9634 kinda bad the country is beautiful the nature the landmarks there r nice but living there is rlly bad there r protests many ppl are starving and most of the people are poor because of corruption and polatics
I'm a Lebanese and i wanna say u did get a lot of things right and most accurate thing u said was that they should not distribute the power based on religion rather than choosing who knows the subject of the matter...
@@ghassanm6640 true bro truw
Mia Lebanpo*n... Shame on u !!
@@all-sports-max oh no the porn word 😨
Something you’ve missed: The low to almost nonexistent amount of US dollars in the Country, meaning they’d have to print more L.L. to buy products, which would in turn cause inflation, which is also why this crisis is so terrible to all social classes, since the country has gone into deadlock almost, where there lacks nutritional and pharmaceutical needs and gasoline as well. Thanks btw for shedding light on this tragic crisis
As a lebanese speaking from Lebanon right now the Lebanese lira stands for 19,500/ 1$ and 24 hours without electricity i can insure that the wound of the bleeding is being ripped open
Civil war seems near
Just a question. Why don't Yall take the help Israel offered?
@@aiaivivi8286 because the majority of the government is under hezbollah.
@@redark3093 well yea possible
@@aiaivivi8286 the vast majority of Lebanese are strongley against Israel any deal with them is called "tatbiaa" this word is so bad in Arabic world like the word "racism" in the west is.
anyway no one trusts Israel here if it helps Lebanon today no one knows what is the political sequences will be tomorrow.
“Making sure a city doesn’t explode” 😂
Great video!
Great video. As a Lebanese living in the Netherlands, I think you really caught the details of the situation in Lebanon, as for a foreigner it's usually difficult to understand what is really happening.
So thanks!! Big fan of your channel.
Thanks!!! I'm very glad to hear that because this is something I was definitely worried about. I tried to use local sources (from local academics, central bankers, and bankers ) wherever possible. But, it's always tricky as a foreigner. Especially if you don't speak the language.
@Tracchofyre I couldn't find any good sources on that? Do you have some. I would be interested.
@Tracchofyre How it was financed. Was just interested in anyone did some investigative journalism on it.
@@MoneyMacro As far as I know, one way of HEZ to finance itself is to sell (used to be) subsidized fuel to foreign buyers (mainly Syria) and thus earnings lots of money.
I truly wish that the Lebanese people would somehow overcome this crisis, but unfortunately, HEZ won't give up power (some say it is intentional, so gain total control) - so more likely another Venezuela is forming
I don't think that things are ever "difficult for foreigners to understand" if the information is just accessible.
Moral of the story: elect people based on their integrity/merit
whats the point when the elections are bought and rigged xD
@@aj7252 no need to rig elections when the country is full of ignorance
Unfortunately I heard some people appear on the TV are also bad even though they act nice so we can't really trust anyone
Almost impossible cause the whole system in most middle eastern countries is corrupted and the election is just a sham
Ah yes Middle East, the beacon of democracy where everyone chooses there leaders 🤣🤣🤣
Just discovered this channel and am addicted. Love your straightforward, simple explanations but also leaving the discussion open. I also love how, like someone else said, don't focus on hype, hyperbole, or psuedoscience to make your points. I think it's very important for everyone to understand Economics more in today's world, but is getting harder because objectivity is getting harder to find. Thanks again!
I am very glad you made this comment because that is exactly what I am aiming for with this channel.
As a Venezuelan I send my best wishes to the people of Lebanon. Figthing among the elite can drag for a long time.
That’s not the issue in lebanon
Lebanon is extremely tribal (religion based) and sectarian
@@yeshuasage3724 based 💪💪💪
Fighting the elite will never end because they are allways replaced with new one ... as corrupt and anti-social psychopats like them bevore.
Ok ... change the system ... is no solution at all ... they changed to more subtile methods ... but not the results for the elites ... EVEN in the "democratic" countries of the west.
I loved that you suggested solutions. Finally someone doing more than just presenting the problem. Great job, keep it up!
This is the best video I watched so far expalining the situation in lebanon this puts things into perspective i really hope our lebanon can recover
good luck! I live in Argentina, where we also have inflation issues
I hope Lebanp*rn can recover from the p*rn damage that (u know who) caused! SAY THAT INTEAD FFS!
I’ve always been curious wanting to know what lead to the economic collapse of Lebanon 🇱🇧 since I heard about it this year because of that explosion💥. I finally learnt and understand how and why it happened through this explanation @ money & macro.
Love how you included both how the problem happened and how it can be solved! Brilliant video!
Very instructive video. As a Lebanese, who is living in Beirut, I can say that one of the major factors that led to the economic crises is the decree-law concerning “exclusive dealership” on importing specific products into Lebanon. This decree-law dates back from 1967, and gives exclusive permission to a designated dealer to import specific products into Lebanon. For exemple, only one agency can import Toyota cars, only one dealership imports Apple or Samsung products...
This clearly hurts the pronciples of capitalism and free trade, knowing that Lebanon adopts a liberal and a capitalistic economic system.
Very interesting. Yes... seems like a very bad policy because it massively reduces competition.
@@MoneyMacro As you said it massively reduces competition, the 2 main reasons Lebanon is facing a crises are these “exclusive dealerships” and tax evasion, even with the inflation. Note that Lebanon’s budget and our state’s resources do not take into consideration the devaluation of the Lira. (We still pay taxes on a 1$/1500 LBP). So here is another reason why the Lebanese state is becoming poorer and poorer.
@@KarimAibrahim00 I ain't reading dat ma boi!
ah no I don't agree. if lebanon encouraged competition then imported goods would become temporarely cheaper, thus further increasing the amount of imports and killing any locally produced goods. The results of that would be a faster fall for the Lira. So increasing competition for imports would have accelerated the process not stop it
@@destroctiveblade843 If Mr. Joeri agrees, we can have a whole discussion regarding local competion in lebanese law, and how exclusive dealerships were killing local industries.
You hit it spot on in the end about our religious politics
@@futurei0oo only people who see it that way are religious folk. The middle east has an issue and it certainly isn't a secular one.
One working solution is to hijack the government and expunge all forms of religion from the country
Imagine if the current Lebanon President/PM watched this tutorial.
He can't keep his eyes open for 5 mins lmao imagine 15
You have to realize he knows what he is doing but he is extremely corrupt right now he is just stalling time my only hope is that he wont be able to stall for much longer
You're a very smart man, you deserve a lot more subscribers, kudos to you mate!
Solving our crisis is really complicated to the point that it could be the hardest job in the world.
Try getting america to stop saying "communism".
Cheers from Jordan
(I hope we don't have to go through the difficulties our brothers are facing in Lebanon but we are not far from it and nothing is impossible in good old ME)
Thanks for this very informative video. It sounds that as impossible as it is, you were able to simplify the Lebanese scene.
May I ask you to ols make a video about what you mean by debt restructuring in thr Lebanese case? It seems to me that that economy and lira cannot hold that either
I am a student of international politics who's focusing on this topic to study the main causes and consequences of this tragic crisis in Lebanon. Your video was really helpful and well done. Thanks a lot, really appreciated it. And I send a huge hug to all the Lebanese people who are facing this tremendous situation.
Spot on. I am Lebanese, grew up here in the 80s and 90s, worked since around the world and now been here for 3 years. My intention was to stay in Lebanon and retire but due to the crisis lost my savings and now a have to leave the country again to try to save for retirement. A note: the corruption is deeply rooted over decades and dispersed across 6 or 7 corrupt criminal tyrants each have the support of a different foreign country. So the political reform is pitting the revolting Lebanese against the world. This is the first time in my life I feel hopeless and sad as in mourning. Note 2: we have to support our families by remittances but the government is built over decades on creative ways of stealing and gutting whatever comes into the country. Therefore now we only support by the minimum amount required and most cases will have our parents and relatives leave to stay with us wherever we find jobs.
amazing video, a brief historical review supported with analysis for the reasons behind this huge depression, and undersetting the complexity of the socio-political corrupted system that is protected by the religious parties is the most effective one.
the missed part is : there are a lot of smugglers to Syria that increase tax evasion rates; and over more than 30 years the Lebanese governments didn't invested in a productive sectors as industrial and agricultural. It only depended on the tourist and service sectors that makes the economy prosaic. Thanks for this amazing video.
Another thing that should be mentioned is the deteriorating relationship between Lebanon and the UAE and the KSA. Both house huge Lebanese expat communities who send crucial remittances back to Lebanon. However relations started to deteriorate in 2011 when Lebanon and the Gulf states found themselves backing different sides in the Syrian Civil War, and Lebanese expats in the UAE and KSA bore the brunt of it. Many were expelled back to Lebanon, many Emiratis and Saudis emptied their bank accounts in Beirut and it became harder for Lebanese people to expatriate themselves in those countries. Recently the UAE and KSA banned the import of Lebanese fruits and vegetables following the discovery of a shipment of captagon hidden in imported Lebanese pomegranates.
It wasn't because of the Syrian Civil War‚ it was mostly because of Hezbollahs control over Lebanon‚ Hezbollah acts to further Iran's influence while Gulf states want to battle it.
The reason a lot of Saudis and Emiratis emptied their bank accounts was also mostly due to the economic regression of Lebanon‚ investing in Lebanon was seen as a huge chaotic mistake.
@@bonafidemonafide7810 Yes the deal we either support ISIS and Al Nusra terrorists , or we face punishment. And you blame Iran, when the real issue is that the KSA was offering a fucked up deal to begin with.
@@themanbehindthescreen8226
Thats not the deal offered.
Stop sending drugs to other country's.
ISIS and Al Nusra dont exist anymore‚ only remnant surrounded groups remain.
Austria and Germany both found shipments of Captagon coming from Lebanon.
Egypt‚ Saudi‚ and the UAE all found Captagon aswell.
Its been like that for years‚ no one wants a drug dealer as an ally‚ im sorry about what happened to you but as long as a terrorist group controls your country you cant blame others for not wanting anything to do with you.
And yes‚ I do blame Iran‚ Nasrallah himself admitted to being a tool for Iran and carrying out their orders.
@@themanbehindthescreen8226 Hezbollah kills opposing politicians, smuggle goods to syria, destroyed relations with the GCC who basically carry the lebanese economy based on foreign injection of dollars mostly coming from them. That’s without mentioning the disastrous default Hezbollah’s government decided upon. Once Iran leave the country everything will go back to normal. How exactly is KSA responsible for our crisis when you’re literally fighting them in Yemen? You want them to support you whilst fighting them? 🤣
@@bonafidemonafide7810 i am not a Hezbollah fan at all but I also disagree with the notion that Hezb "controls" Lebanon. Yes Hezb is a major political and military actor in the government but it functions through crucial alliances with other actors (FPM and Amal for example), and those other actors also have a very large say in the country's politics. For example it's not Hezbollah who decided Lebanon's disastrous economic policy, however it has provided muscle to protect the interests of the rulling class during the 2019 and 2020 protests.
I’m about to do some research for my graduate degree on the political economy of Lebanon. It’s so complex and intersectional. This was a really good video.
11:20 is the real cause, also a small correction this was based on Taif convention which was a temporary suggestion (1-2 years if I recall) to push peace talks forward, but that never happened and the Lebanese govt. kept the structure going to date.
100 percent economical scripts reflect whats in lebanon as if you are living in Lebanon! Good on ya man
Very good video that accurately isolated the problems and discussed them in a balanced and reasonable way. Too many Lebanese have the tendency to blame specific internal or external actors for their problems while turning a blind eye to the damage their faction caused
Not u putting old Lebanese lira giving me flash back of my childhood 😂😂😂 gr88 video mann
How to solve the crisis?
The french way.
Sharpened pitchforks.
What's going on currently is unacceptable.
One theoretical solution would be for France to reannex Lebanon, which was actually proposed at one point (mostly as a joke of course, but still somewhat seriously by some). Now that would be "the french way"!
Pitchforks against the elite are easier in a homogenous country...
In a place like Lebanon.. it is far too easy for the elites to scream "oh no the Hezbollah supporters are attempting a couple detat" or "oh no the Christians are taking over" or "oh no the sunni ISIS is in Lebanon now" and then quickly turn what was started as a revolt of the people into a sectarian war.. just like in Syria.
@@dinsel9691 This, this and this
@@dinsel9691 spot on..
Dr Schasfoort is an exceptional Economics teacher, providing well thought-out content as clearly and honestly as possible. What a privilege to watch this channel.
Thank you for your kind words Martin
Wayyyy better than "Economics Explained".
It's really incredible of you to understand all those things about our country, I'm mean it is complicated even for us
I hope all of this ends and lebanon regains its power. Literally a loss to humanity. Sending love to all lebanese people from Egypt 🇪🇬✌️❤️🤝🇱🇧 in sha2a allah tet7al w yerga3 lebnan zay el awel w a7san❤️
الشعب اللبناني معروف ب قوته و صمده في الازمات و عدا ب ازمات كتير ا و قدر يعدي منها و يرجع يقف على رجله سامخ ، ربنا يصبركم و تعدي الازمة دي و ترجعو لحياتكوم الطبيعية❤️
that conclusion part really hit the mark. you just got yourselves another subscriber.
Super great Video! Cannot wait to see the next Lebanon-Video!
big thank you from lebanon❤️🇱🇧
Black market exchange rate is currently 18,000 LBP for 1 USD, it's like a never ending nightmare..
25,000 next month
If government still print money for the deficit it will be worse.
I am Venezuelan and my country happened the same that lebanon with the factor of plump of oil prices that are our 90% incomes, the government since 2003 also pegged the Bolivar (our currency) with the dollar, 4 bolivars per dollar, Killing the exporter sector altenative of oil, and promoving importing, also the same government was one of the principal importers, we had 5 tipes of currency exchange in 2013, and we have in 2018 1.000.000% of inflation.
@@danielramirez8298 we are on the same path, they keep printing money to pay people's wages, there is no plan to solve anything, the minimum wage used to be 450$,now it's 35$,prices are skyrocketing, illegal petrol export to syria continues while people are killing each other on the gas stations to get few liters, lots of the educated lebanese people used to go work abroad and send fresh dollars to the country, now we are considered terrorists for some political reasons most of us know nothing about..
@Ryan Alex they need Stable government for that
Thank you for bringing this up, I have not seen enough people talk about this 🙏
As an Israeli I feel bad for the lebanese people. People of all ages and races are starving, lacking basic needs, with barely any hope for a brighter future. All of this because of a government that doesn't do the one thing they suppose to do? Take care of your people, is that so hard? Any lebanese can confirm someone at least show some care? Everyone said "ohh, the governing body of my country sucks" while Lebanon's government is pretty much not even there so people will say they suck.
Can i ask you a question?
@@محمدالحربي-ط9ح4ب please ask. You don't have to ask if you can.
@@FrostedMike
Why does your government kill innocent people? For what reason does the Innocent Palestinian kids die for?
@@محمدالحربي-ط9ح4ب
A. They don't kill innocent people or at least don't try to. "Why?" have a very simple answer: because why? There is nothing to gain from killing innoncent people, so they don't kill innocent people.
B. Innoncent people do die and this is what triggers people. This is where we need to tell the difference between the West Bank and Gaza. Gaza is controlled by Hamas who are a terrorist group and use innoncent people as human shield. You can find videos proving it all over the internet. The West Bank is a different story as innocent people are literally trying to kill people on the israeli side. Unlike Gaza, they don't have as much access to weaponry and people there have better life than those in Gaza. There are videos of palestiains running with a knife trying to stab soliders or israeli civilians. One of the issues is that some of them are kids charging on people with a knife. Morally, you don't suppose to shoot a kid, but what will you do if a kid is charging on you with a knife and ignore warning shots?
C. Media filters what is actually happening and doesn't tell the whole story, only parts of it. You have no idea how much of a minority terrorists of both sides are.
D. If Israel is commiting genoside, tell me how their population is growing like any other country?
isreal still tries to bomb Lebanon every while. also isrealis put underground bombs (I don't know what exactly you call them) and they won't give us the map of where they planted them people still die because of it
Please do something about Tunisia and its current economic crisis. Thank you for the great content
👍👍👍👍👍👍👍👍
Ahna lezemna nvotiw pour des politiciens responsables, andhom programme w surtout courage politique. L'intégrité seule matsalla7ch l'économie. Ce qui est triste 3anna potentiel économique énorme accablé par des lois archaïques et bureaucratiques mais surtout notre économie de rente. lezem on démarre les réformes et il faut libéraliser notre économie pour qu'on puisse créer la richesse et puis on discute comment les distribuer.
Une démocratie sans économie libérale ne vaut rien.
When you ask the government to fix thing and they resign instead
Not our problem now, do it yourself while we steal more money
They had stolen enough, why deal with your problems when they can run off to their holiday homes in Europe.
France tried to help lebanon by giving euros, dollars, medicines, computers to the goverment and told them to give it to the people and the goverment did nothing they just kept all the stuff france gives to them instead of building more hospitals they just steal
@@ratie2573 I think the reason why france backed down from giving us money, is because the french people turned against them and claimed that the lebanese government would steal it all just like they did for the past decades, and honestly they are not wrong think that.
You did it very nicely, must have been a lot of work to make this video. Thanks !!!
Very simple solutions every economist know but very painful to do. Float the money and immediately it falls off the cliff before it eventually recovers, if it recovers.
Gather the elites in one room and…….
Lebanon would prosper after
put our guy in the same room and ....... you know, the skinny tall dude with blue eyes
Nope that just stupid wishfull thinking . They would start lybia 2.0
You are Lebanese
Having lived in Lebanon since 2009, you made no mention of the illegal capital control law that seized and refused to give back peoples deposits. Life savings are trapped in the bank and we have no access to withdraw our funds.
Very informative video, since things move fast in Lebanon, a lot has happened since you made this video. It is probably time to upload an update of the situation there...
I would cry a million tears and still wouldn't get enough..
SAME 💔
Good analysis, the core issues are mostly very well laid down and discussed, narrative is not 100% correct, but this is not an issue, very good work. It would have been great if you tackled a bit more deeper the flaws in the attitude and mentality of the population (not only sectarianism) like the pervading self interest, lack of communal sense and ethics, lack of allegiance to the country. For most lebanese, lebanon is a hotel, they may not say so explicitly but their behavior betrays the way they perceive see this construct called lebanon. The person writing thee lines is a lebanese living in Lebanon. Keep the good work going
this lack of communal sense and ethical traits paired with the sectarian system is the result of the horrible government. Many people forget that no one chose the corrupt officials other than the Lebanese and everyone knows that any average Lebanese person in their positions would do the same.
"Economy doesn't operate in a vacuum"
Oh, finally. It only took a couple of hundred years and three global economic crises for today's economists to notice that there are political institutions and political feedbacks too
Better to hear solutions than just the problems. Even better to see action which is always better than words.
This channel is gold, i subscribe now 👍
Amazing and educative video!!! May I recommend you please do a video on Algeria. It will prove to be challenging for you to gather academic sources as well as putting a cohesive video that'll explain everything to viewers like this one.
Thanks for the idea!
The crisis in Lebanon was inevitable the Storm simply speeded things up...
Run out of toilet paper? Just use Lebanese currency.
Lebanon has no natural resources & no money.
Lebanon is finished. Just forget about it.
@@Abraham_Tsfaye most of the brains are offshore because of the country divide and the economic problems Lebanon in its day was the Dubai of today
you could say it was a shitstorm
Notice all countries surrounding israel have suffered or are currently suffering greater than ever before. Coincidence?
@Kartik Gupta Haha. Ethiopia is paradise. I live in Bahir Dar. A beautiful town full of greenary and birds singing. I wish you well!
Very insightful video! Thanks for spreading the word. ❤️❤️
pretty accurate, thank you for the quality content. i was pissed off by the optimism in the first half, then your reality check on politics came.
anyways the exchange rate is at around 19,000LL for 1$ today. i was studying at candlelight yesterday because we don't have electricity. i was grateful that there weren't 3 hour lines at gas stations today. next wednesday marks the first year after the beirut explosion with no accountability or consequences whatsoever because the mafia-like organizations that call themselves a government keep protecting each other. lebanese people suffer from so much burnout and trauma, and it's only gonna get worse. i hate the ruling class.
This was great! I was going to say it would be very interesting to hear your take on South Africa's economic problems, but it's kind of the same thing: at root a political problem.
Yes. That is on my "very soon" wishlist since I started the channel there
As an Israeli i knew most israelis would like to help lebanese people. one way to solve the problem is make peace between israel and lebanon. israel now has the strongest economy in the region, but the prices are high. so israeli peope would like buy cheap things from lebanon - and that will lead to alot of foreign money go into lebanon. also - peace with israel would make it easier to transfer logisitic to jordan and egypt and even saudi arabia and UAE - because the new railroads that connect all those countries.
Peace with Israel is peace with war criminals and ethnic cleansers, Israel is an apartheid state, Israel used white phosphorus bombs in the last war on Gaza to kill civilians, especially children, and they were not human shields as Israel claimed since they didn't shown evidence, some idf soldiers have told that they were mindlessly bombing everywhere because they couldn't find Hamas.
If Israel can stop it's terrorist actions on Palestinians,why not?
@@jdinry93763 You really can’t see yourselves. Arab culture generally is violent and corrupt. Israel is a sexy bubble of light.
Anyway it’s your collective funeral.
@@oleggoldberg8598 You saying that every Arab is violent and a terrorist makes you racist
The exchange rate is fluctuating at around 23,000 L.L. and its only getting worse. as you've mentioned in the end of the video ,this economy crisis is due to political reasons ,corrupt politicians, being divided on Religious bases not only in politics but in every detail of our lives adding to that external interference of tens of countries who have Regional political goals to put pressure on certain parties or to impose dominance ,or having some greedy interest in our country's resources, even having their own wars and our land being their war field so they could have their battles.
Whats going on is more than just an economic crisis its more like and economic poltical war between certain and well know parties for well know reasons .
Great video tho sending you all the love from lebanon dude
We are currently sitting at a cool rate of 20,000 liras to 1 dollar 🙂
Not anymore now it is 16700..
@@Erolbrasco yeah, heard it’s gonna keep going down today
@@samabla2343 whats gonna happen when its going down? Cuz i go on vacation to beirut this week 😭😭
Would be interesting to see a similar analysis of the economy of Lebanon’s neighbor to the south
between the Phoenicians being the masters of the Mediterranean Sea, to this... what happened to Phoenicia!
get well soon Lebanon :( sending love to Phoenicia
No Lebanese are Phoenician anymore. Its a historical fact.
Wallahi this word initiated a civil war once😂🤦Lebanese is enough mate
@@00Abia I did not say that lebanese ppl are the phoenicians in my comment tho
@A A the video is about Lebanon not Greece or Egypt
@@00Abia and yes the Lebanese people are not the Phoenicians, they're primarily their descendants
Great video! I would love to watch another one about Syria.
Lebanon is like the Phoenix. It will rise from the ashes again ✊
Doubt we will bounce back from this without any casualties
Nice video, and the fact that you attributed the main cause of the crisis to the politicians was spot on.
The thing is that your suggestions for political reforms are good in theory but i don t see them applicable cause the problem is that people sees everyone corrupt but their leader and even if chaos starts they ll be willing to protect their favourite politicians but who knows...
Greetings from lebanon
So what is the solution to Lebanon then? Don't say there is none. There is always a solution even though the solution is very painful.
@@wavemaker2077 well, atm i see only one solution for short term and it s that a western neutre country take over for few years establish some good bases, change some corrupted laws and put some new talented faces to rule so we can see their efficacity. Maybe also throw in jail some of our corrupted leaders (but it's too good to be true last one.) Anyways i don t see it happening anytime soon and all the other options i don t see them working for a short term, maybe things ll get a bit better but we ll still be in the hole. Anyways no one knows what the future holds hopefully i am wrong
@@carljalkh9778 Maybe the UN can do that. I don't know if it is possible to petition the UN to manage the country for a few years just to let it get back to its feet. Maybe a big clamor from the Lebanese people can persuade the UN to do it.
@@wavemaker2077 Solution: Sanctions. Cut their luxuries, bar them from entering the EU for example and they'll surrender. So simple.
@@hx0d You mean Venezuela style? Venezuela was sanctioned and the government officials are barred from entering the US so that they will resign from their position. Yeah, I guess this idea will work in Lebanon.
Lebanon is the Paris and the rose of the middle east. Lots of love from Greece!
🧡⚡️
@Masquerade not if you know its history and culture and you ve done your homework before you go. If you go randomly just because you ve heard about it and you look for beer and fun only then it’s not for you sorry.
Yessssssss bro love you too 🇱🇧❤️🇬🇷
@@Ancient_Insights_OG ❤️
Absolutely brilliant video! The one thing i would like to add is that many of the religious factions you mentioned are influenced and financed by Iran and Saudi Arabia whom are fighting a proxy war in Lebanon. This makes it even less likely for the interests of the political elites to get more aligned with those of the country. Sadly, therefore the already incredibly complex situation becomes almost impossible to fix.
We really need nothing we just need to live and human rights
This analysis includes many of the factors for Lebanon's collapse, but it overlooks one of the most important: sanctions.
In 2019 the US Congress passed the Caesar Act, which imposed an economic blockade on Syria (like the US economic blockades on Cuba and Venezuela), which threatened secondary sanctions on any foreign government or company that trades with Syria. As Syria's neighbor, Lebanon obviously did a lot of trade with it, but much of this was forced to stop by US sanctions.
At the same time, the Trump administration imposed sanctions on many Lebanese officials and political institutions. These sanctions were repeatedly expanded.
Obviously the threat of secondary sanctions and further sanctions in the future leads to over-compliance, which makes it difficult for countries to attract foreign investment and encourages capital flight by pressuring any current foreign investors to withdraw from the country. It also makes it even more difficult to obtain foreign currencies, especially for such import-heavy countries like Lebanon.
Would more government spending, regardless of if it was spent productively or not, just exacerbate inflationary forces and kick the economy whilst it is down and potentially open the door for another default? Would the more viable solution not be just to pull cut overall spending and divert essential services to private market or lower levels of gov.? I understand the arguement but I don't think the solution is to assume that the Lebanese gov. can or should be trusted regardless of wider changes to change its.
Fair point. As you note I'm not arguing to increase gov spending. But true especially when doing it to those who need and are most likely to spend it most it could lead to more inflation. However ... In a crisis like this I think there are two opposing forces debt deflation and exchange rate inflation. So, therefore I think it's safe to keep spending on essentials.
@@MoneyMacro The government could also spend more in areas or industries that will bring more foreign capital and industries that substitute foreign goods hence saving on foreign capital.
@@kamaujohn6303 For sure. I think that is would be a good strategy for long-run growth ... However, quite difficult to pull of in practice.
Mate I think Lebanon need someone like you.
Libanon's ministery of finance :
Quick write that down!!
This was very educational, thank you
The real question is:
- Is Hezbollahland (Lebanon) economy worth saving for the rest of the world?
Lmao u really think we all Support Hezbollah? Definitely not
Most of us hate hezbollah
@@that_lebanese4747 exactly
mate, loved the video, you're pumping out heaters with every release. however, I do want to mention that often during strife, the first shot of the next war is taken (long) before the last round of the previous war has been let loose.
Amazon should just buy Lebanon and have Mia Khalifa be the president. Problem solved.
God bless you sonny
🥵
Why
Mia khalifa has more honor than Lebanon’s politicians
Lebanpo*n destroying Arabs culture of Islam... Lebanpo*n.... HEHE LOL!!
Can you do the Egyptian economy as its one of the few nation that didn't shrink during covid?
Comprehensive video, thank you. However, we should speak also about the fact that those "private banks" lend the majority of their funds (deposited by the diaspora) to the failed governments with the hope that they will get back unrealistic margins back (up to 17%). It's a shame and horrible management by those banks, whom the people trusted, to blindly lend all these funds to such a corrupt government all the while not caring if this money will ever be returned to their owners..
sure, but the only reason they got investors' money in the first place was unrealistic interest rates, the whole thing was a massive pyramid scheme.
@@toobalkain Not specifically. I am an Expat living abroad who chose to put my funds simply in the banking sector of Lebanon (did not receive any interest, it was simply a storage option, chequing account). Like all people, all of a sudden my money disappeared because the "private banking" system is incompetent enough to go and lend all funds to the corrupt govt.
@@bahabalaa1421 yeah, there must be millions of personal tragedies of people and families who lost money to the scam that is the Lebanese banking system but I would imagine most from the diaspora were attracted by high interest rates, I mean, Lebanon is notoriously corrupt, most people probably wouldn't have chosen a Lebanese bank otherwise. Do you still harbour hopes of some day being able to recover your funds?
@@toobalkain The high-interest thing is true but it is on a macro scale not micro. I mean the banks feel for the trap of high-interest rates way more than actual individuals. The banks gave all the money deposited by people to the central bank which promised to give back high interest only to be bankrupt a couple of months later. Individuals on the other hand deposited there because we were under the impression that keeping your funds in Dollars in private banks is safe just to freeze them there (not with the intention of making millions on interest). I am not sure about a viable solution to be realistic. The government officials should put a plan to return all these funds gradually over the years and obviously cutting back on the budget deficits.
@@bahabalaa1421 I was under the impression that the commercial banks were offering 7-15% p.a. on deposits for years and that that was the reason money was pouring in, there are channels on youtube that explained the default like that, are they wrong?
ربما سيت التحدث عن التدخلات الخارجية والولاءات للخارج
أعتقد بأن لها تأثير كبير على الوضع السياسي وبالتالي ستؤثر على الوضع الاقتصادي
Great video,
Also I think that one of the things Lebanon can do is cut taxes for corporation in order to attract foreign companies that will pay employees with cash dollars, is that a good idea? Because I cannot see another way for Lebanon to attract businesses, obviously you know about that more than me
Thanks!!
I agree that attracting productive businesses would be a great help for the Lebanese economy. I doubt blanket corporate tax cuts are the way though. As far as I know, corporate tax rates are already quite low (17%). Compare that to neighbouring Israel, where many corporations are located with a 23% corporate tax rate.
There are many factors that go into making a country a good place for business. In this case, would taxes be the main concern for companies? Also, I wonder if the government can miss the initial revenue loss of cutting taxes. For these reasons, I would prioritize improving the functioning of basic government services, infrastructure and reigning back corruption (which can be quite expensive for businesses, like a hidden tax).
One thing that might be possible on the tax front, is having some initial tax breaks for new companies, these won't cut into existing tax revenues. But, these have to be very carefully designed so that they cannot be misused for corruption.
@@MoneyMacro thank you for your explanation
@@MoneyMacro agree with you on this one. one of the main concern for business is safety. it's useless to have 0% tax if there's way too large of a chance your business office will be bombed to smithereens next morning.
What business would want to locate in Lebanon? I don't even want to visit let alone a business investing millions into an unstable country.
@@JJs_playground this type of country gives good return if they can manage to become stable.
Very good video and I love how you try to be as neutral but keeping the reality on the trouble!!
As Syrian, I’m sorry lil bro but hey, things could be worse. Thank Goodness my country’s war didn’t spill over into yours like it did into Iraq.
Y'all were a big reason for our fall
Indeed.
Sorry to say, from the Scriptures and Jesus: One of the signs of near return of Jesus is peace in Jerusalem and the destruction of Damascus.
@@danielblue4460 Brother I respect what you believe. I am Muslim. We Believe in the Gospel revealed TO jesus. Not your bible written by the companions of Jesus PBUH. Those texts are corrupted by man. The True Gospel that was preached BY jesus has the same Message as the Quran. Not Son of God blasphemy. Jesus peace be upon him will return IN Syria to a town near Damascus. Not In Jerusalem. There will be destruction in all of the Levant when he returns. Damascus will be in ruins but so will Jerusalem.
@@ak_3rab and @daniel blue you're both out to lunch if you think some fairytale, magical, guy in the sky is coming to save anything.
@@JJs_playground fairy tails? 😂😂 God I would love to see your face on the day of judgement. Weird how these fairy tails all have scientific evidence behind them? Or are we just going to skip over all the things Proven by the Quran 1400 years ago. Like the Human embryo as 1 example.
Another good example that proves the new instituational economic perspective.
9:50 i’d just like to say that only two months later the price doubled and now stands at 21,100 LBP For 1 USD
And now 22,000+
In another 3 months it would be 30+40,000 if nothing has changed
Hey! Just a little clarification. It is spelled Maronite, not Marionite. The word Maronite comes from the Syriac Christian Saint Maron. Thanks for your great video. Waiting for the next one on Lebanon. Cheers!
Ai... my bad. i'll add it to my main thread. Thanks!
You ignored Hizbullah and its affiliation to Iran which made foreign aid difficult to obtain + US sanctions on Lebanese entities + Hizbullah involvement in 3 countries (Syria, Yemen and Iraq).
Hezballah wants to free Palestine and the US doesn't want that, so they weakened the economy and prevented Lebanon from becoming a highly developed country to weaken Hezballah to prevent them from destroying Isr*el and free the holy land and return the palestinians to their homes. Basically, Isr*el's existence is a source of trouble in the middle east. This is why Hezallah exists, because of isr*el. And the west will do anything to protect this illegal settlement state even if it envolves ruining other people's lives. This shows how cruel the west is.
Oh yeah i also forgot, they go to syria to get rid of the ISIS that was assembled by the US and europe, and went to yemen to prevent saudi attacks on them.
Very well made sir.
I like how he even knows how to fix it but even our president Michelle 3oun doesn’t
Its not his job to do that,its the minister's job
Love your vids! Can you do one like this on the Venezuela crisis also?
18,500 LL/1$
The Elite got another season
Keep it up.Simple,to the point and a great video👍
The real power in Lebanon lies in Iran where political reform is not high on their agenda 😢😢😢
Lebanon recovering from the economic crisis is not high on the agenda of Iran.
nah, the reality is lebanon is a land of a proxy political war between Iran and Saudi Arabia with a pinch of interference from Turkey, France and Israel. These countries basically give support for the political elites. And when their interest clash it is guaranteed there will be no political stability in Lebanon. Which in turn, brings corruption and economic ruin. The worst part is, because of religion the people of Lebanon depending on their sect welcome that foreign interference into Lebanese politics. For example, shia muslims welcome Iran's interference. Sunni muslims welcome Saudi's interference. Maronite Christians welcome France's interference. Then you have the separation in the same sect. There are Sunnis who prefer Turkey over Saudi Arabia. And you have Israel whose mere existance and threat of war gives Hezbollah (Iran's hand in Lebanon if you will) a huge public support. And the minority who knows the situation suffer the most, the only solution being is leaving the country all together, and you can imagine what a hard decision that is.
@@mohammadibrahim3068 Even yet most people are not even financially capable of leaving the country
Open your mind and use your brain.
@@mohammadibrahim3068 you know nothing of Lebanon 🇱🇧 “a land of proxy political war” .... this all starts from the illegal occupation of Israel. Open you’re eyes.
I get smarter everytime i watch one of your videos
I think people who would have bought CDS on Lebanon are having the most fun.
Indeed, that seems to be the case: the graph for the 5 year CDS contracts on Lebanese Gov has gone up like crazy.
@@MoneyMacro Lebanp*rn boi!
Well done. First time viewer.
The Lebanese must suffer furthermore, for most of them still support their leaders
Good take