CNEWA

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The official publication of
Catholic Near East Welfare Association

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Sinking Deeper

The backbone of Lebanon — the social service initiatives of the churches — bears the brunt of a country in collapse

A ray of sunlight shines through the window as 7-year-old Antonia plays a guitar chord she has just learned for Sister Gladys Sassine. Antonia lives at Blessed Sacrament School in Beit Habbak, a remote village in northern Lebanon. Sister Gladys, the school’s director, smiles with pride, but her eyes reveal a hint of concern. 

Sister Gladys’s congregation, the Maronite Congregation of the Missionary Sisters of the Most Blessed Sacrament, as with many other religious communities and organizations throughout Lebanon, is navigating one of the worst economic crises since the 1850s, and the school’s future is uncertain.

Since 2019, Lebanon has been caught in an economic spiral with no end in sight. Three decades of mismanagement by the country’s political and banking elite, a climate of corruption and structural inequality — exacerbated by the COVID-19 pandemic and the Beirut port blast in 2020 — have pushed Lebanon into nearly $103 billion of public debt.

A United Nations official has described Lebanon as a “failing state,” unable to pay its bills across the board, including its hospitals and schools, leaving civil society and its people struggling to stay afloat. In January, Lebanon lost its right to vote at the U.N. General Assembly because it had failed to pay its dues. The looming question in the mind of many Lebanese is: How much longer can we cope? 

At Blessed Sacrament School, the 1,400 students seem oblivious to the precarious situation. When the school bell rings, they pour into the corridors, filling them with laughter, as they have since 1969, when the school opened to serve families in the area.

The school pays most of its bills in U.S. dollars, even though its income is primarily in Lebanese pounds — an unsustainable situation since the Lebanese pound has lost 90 percent of its market value since 2019. 

“How long can we stay like this? I don’t know. But we are not scared. God is with us.”

In January, Lebanon’s currency was trading on the market at 67,000 pounds to the dollar, far from the official bank rate of 1,500 pounds to the dollar, which Lebanon’s central bank had maintained for 25 years.

On 1 February, Riad Salameh, the central bank governor, who is being investigated for money laundering and embezzlement, changed the official bank rate to 15,000 pounds to the dollar in an attempt to unify exchange rates. However, in mid-February, the exchange rate on the market, which impacts most Lebanese on a daily basis, was trading at an all-time low of 80,000 pounds.

With this devaluation, the survival for many is at stake.

At Blessed Sacrament School, a teacher’s monthly salary is between 2 million and 4 million pounds. Prior to 2019, 2 million pounds equaled $1,333; these days, it is between $25 and $35. 

“Their salary is the same as the cost of two tanks of fuel,” says Sister Gladys. “How can teachers even afford transportation to the school?”

CNEWA is assisting the school by covering gas stipends and a portion of teacher salaries in dollars.

Sister Therese Abou Nassif, speaks with a patient in the hospital’s courtyard.
Sister Therese Abou Nassif, director of the Psychiatric Hospital of the Cross, speaks with a patient in the hospital’s courtyard. (photo: Raghida Skaff)

Electricity is the school’s main expense at $5,000 per week. The state rations electricity, supplying only two hours per day; the school must use its own fuel-powered generators the rest of the time. Covering fuel costs has become more difficult since the central bank fully phased out the national fuel subsidy last September. The Ministry of Education has not provided the education subsidies it owes the school for the past five years.

To cut costs, Blessed Sacrament School has reduced class time to four days a week, shrunk its boarding program from 60 to 19 students, and suspended professional training courses. The school is living off of donations, says Sister Gladys.

Mother Arze Gemayel, director of Al Saydeh Hospital for the Chronically Ill in Antelias, about 7 miles east of Beirut, is faced with major challenges in providing proper care to patients since the government stopped health care subsidies to the hospital. Her congregation, the Franciscan Sisters of the Cross, has been running the long-term care center since 1946. Currently, they care for 450 elderly patients and 100 patients with special needs. Of these, 75 percent come from families with limited means and costs for their care are supposed to be covered by the state at a rate of 50,000 pounds per patient per day.

“That’s [now less than] $1 per patient per day, far from enough. But in any case, the state hasn’t paid in a year,” says Mother Arze. 

The other 25 percent of patients, who once had resources to pay their own way, now struggle to cover their monthly bills, she adds.

On a sunny winter morning, Gariné Pambukian sits with her 87-year-old mother in the center’s cafeteria, surrounded by banana, lemon and avocado trees, enjoying a view of the Mediterranean Sea.

Gariné’s mother has Alzheimer’s disease and has lived at the center for two years. With a monthly income of 3 million pounds, Gariné and her husband, who already care for his parents in their home, struggle to pay the 1.5-million-pound hospital fee.

The meager revenue from patient care does not cover the hospital’s rising costs, including salaries for the 200-member staff and the $6,000 weekly fuel expense, says Mother Arze. An average monthly salary for hospital staff is 12 million pounds, plus an additional $200. It is common in Lebanon these days for salaries to be paid in both Lebanese pounds and U.S. dollars, to help employees stave off devaluation.

Still, in the past two years, 50 hospital staff resigned either to work at private hospital centers that pay fully in dollars or to work abroad. The economic turmoil has led to a massive wave of emigration, making Lebanon the most remittance-dependent country worldwide in 2022.

Lebanese hold the portraits and personal effects of their loved ones who died from the Beirut port blast on 4 August 2020, during a memorial Mass.
Lebanese hold the portraits and personal effects of their loved ones who died from the Beirut port blast on 4 August 2020, during a memorial Mass on the first anniversary of the explosion. (photo: Maroun Bassil)

Lebanon’s economy — largely dependent on the inflow of foreign currency to support an artificial and dangerously low fixed rate to the dollar — imploded in summer 2019, after a shortage of dollars in the Lebanese market.

A few months later, in October, sparked by the government’s announcement of new taxes, protests broke out across the country against the political elite, blamed for the fragile state infrastructure and poor economy. But the energy on the streets did not translate into a unified political movement and could not stem the devaluation of the pound that had begun.

In March 2020, Lebanon defaulted on its foreign debt. Things got increasingly worse, with the devastating economic effects of the COVID-19 pandemic and the Beirut port blast on 4 August that killed more than 200 people and caused as much as $4.6 billion in material damage.

The port blast has become a symbol of the disdain and impunity of the Lebanese ruling class, from the criminal carelessness of storing tons of explosive material at the port to the attempts to sidetrack the judicial probe into the explosion.

A health care worker at the Psychiatric Hospital of the Cross, east of Beirut, comforts a patient.
A health care worker at the Psychiatric Hospital of the Cross, east of Beirut, comforts a patient. (photo: Raghida Skaff)

The government’s political deadlock, which includes the failure to elect a president, has prevented the implementation of reforms that could unlock international funds, mainly through the International Monetary Fund. Maronite Patriarch Bechara Boutros Rai has repeatedly criticized Lebanon’s politicians for their inability to put the good of the people before their own interests and form a cabinet to address the economic collapse.

The crisis has obliterated Lebanon’s middle class. Eighty percent of the population now lives under the poverty line, with little to rely on, except for the charitable works of the churches and other nonprofit organizations. Aside from a few state assistance programs that offer minimal coverage — many of which have been suspended in the current situation — the country has no social safety net.

The origin of this “fragile state” can be traced in part to the policies of former prime minister Rafik Hariri in the 1990s, which “encouraged the private sector to have an upper hand in social services, like education,” says Michel Constantin, CNEWA’s regional director in Beirut.

This privatization was not a weakness per se, “as long as we had an economy,” he adds.

At the time, civil society stepped up with its own initiatives to cover the gaps left in caring for the most vulnerable. However, in the current situation, these church and nonprofit groups are bearing the weight of a growing vulnerable population and are struggling to keep up with the need.

Beyond Hariri’s policies, the fragility of the state as a service provider can be traced back further to the Lebanese civil war and the years immediately following, says Karim Merhej, nonresident fellow at the Tahrir Institute for Middle East Policy. 

“Militia men in the civil war became the rulers of the post-war state, in an era called ‘spoil-sharing,’ ” he explains. “The state and its institutions and all of its resources were used not for public welfare, for giving public services, but instead were used to support sectarian clientelist networks, so each one of the warlords got his own fiefdom in the state.”

The Achilles’ heel of Lebanon’s economy has been its dependence on the inflow of dollars to sustain a fictional fixed exchange rate, Mr. Merhej adds.

“In the ’90s, the productive sectors of our economy — agriculture, manufacturing, industry — were decimated in favor of financialization of the economy,” he says. 

By the end of that decade, “the state was borrowing [money] from banks by issuing treasury bonds with ridiculously high interest rates, like 40 percent,” he continues. Debt started spiraling and, by 2001, “it became clear that there was a collapse in view.”

“The banking collapse has had a dramatic impact on the good works of the churches and other nonprofit groups.”

The international community, through several international donor conferences, stepped in to bail out the Lebanese ruling class. But the inflow of dollars — mainly through real estate, banking products and tourism — started shrinking in 2011. In 2016, the central bank responded by creating a “financial engineering scheme” to attract foreign currency: Banks would offer up to 20 percent interest to entice foreign investors to put their dollars in Lebanese banks.

This became a sort of “Ponzi system, built on unsustainable debt accrued by the state with the expectation that Lebanon was too important to fail, and it will always be bailed out internationally,” says Mr. Merhej.

The expectation was a miscalculation, and the banking system began to collapse. As the 2019 crisis unfolded, Lebanese citizens saw their life savings evaporate with the devaluation of the pound. The banks responded by locking most depositors out of their accounts, refusing any withdrawal request. In the past year, dozens of desperate citizens have resorted to robbing their banks at gunpoint to recover their own deposits. Banks have responded by fencing their buildings and hiring armed guards.

The banking collapse has had a dramatic impact on the good works of the churches and other nonprofit groups. CNEWA, for instance, has had to stop its small-business loan program in Lebanon, which began in 1999.

“We have given loans to 1,000 persons, with an average loan of $10,000,” says Mr. Constantin. “This program changed the life of many small agricultural, food and beverage businesses, but now it has stopped. The deposits are trapped.” 

The banking situation has become a nightmare, says Manale Nehme, director of Message de Paix, which provides psychosocial care for 150 adults with special needs. Message de Paix has three centers: in Beirut, Maad and Bikfaya. 

Beneficiaries receive free professional training and learn basic life skills for independent living. As well, 45 people are employed in the center’s cooking, crafts and candle-making workshops, while 30 work in local businesses. However, it has become increasingly difficult to persuade businesses to hire adults with intellectual disabilities, she says.

The program generated revenue primarily from product sales and received funding from the Ministry of Social Affairs. But sales have slowed, and the ministry’s funding has dropped, from 30 percent of the center’s annual budget in 2019 to 3 percent in 2023.

The organization has had to draw on savings to make ends meet — to save on costs, it also closed its Beirut center in February — but Ms. Nehme says the bank will not allow a monthly withdrawal of more than 8 million pounds and the situation is threatening its sustainability.

“Today, I had a fight with the bank, and I got 25 million pounds. That’s $500. It doesn’t cover anything,” Ms. Nehme says exasperated.

Help from donors, church organizations, such as CNEWA, and individuals are the only reason Message de Paix is still operating, she says. Other church-run social service organizations are in the same position.

Back at Blessed Sacrament School, Sister Gladys expresses a similar concern: “We are trying as much as we can to continue. If we close, these children will have no Catholic school to go to in this area.”

“It is a miracle that people from Lebanon and abroad are helping us,” says Mother Arze, director of the elderly care center in Antelias. “How long can we stay like this? I don’t know. 

“But we are not scared. God is with us.”

Sister Gladys Sassine reads to three boarders at Blessed Sacrament School in Beit Habbak.
Sister Gladys Sassine reads to three boarders at Blessed Sacrament School in Beit Habbak. (photo: Raghida Skaff)

Alicia Medina is a Spanish freelance journalist based in Athens. Her work has been published in international media, including News Deeply, Syria Direct, Syria Untold, Deutsche Welle and Radio France International.

The CNEWA Connection

When the Beirut port blast hit in August 2020, CNEWA’s response was immediate, rushing aid to affected families, schools and health care facilities. Compounding crises in Lebanon have left its people and institutions devastated, as unemployment continues to soar and the currency depreciates.

In May 2022, CNEWA was awarded four grants totaling $1.86 million to support the operating costs of health care centers and schools in Lebanon. The funds were distributed among five Catholic hospitals, the Message de Paix rehabilitation center and 14 Catholic schools.

To support the work of the churches in support of the people of Lebanon, call 1-866-322-4441 (Canada) or 1-800-442-6392 (United States) or visit cnewa.org/work/lebanon.

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