Lebanon is on the verge of an economic abyss, exacerbated by years of financial mismanagement, political instability, and external pressures. Now, amid this dire backdrop, the specter of a renewed conflict with Israel looms large, threatening to obliterate the fragile remnants of Lebanon's economy.

The Lebanese pound has plummeted, losing over 90% of its value since 2019, plunging a vast majority of the population into poverty. Banks, once the backbone of Lebanon's financial sector, are insolvent, enforcing draconian withdrawal limits and effectively trapping people's life savings within their vaults. Public services are on their knees, with essential workers, from soldiers to healthcare professionals, struggling to survive on salaries that have become nearly worthless.

The economic turmoil has not only squeezed the military but has also sparked outrage among citizens. Beirut has witnessed scenes of anger and frustration as depositors, unable to access their savings due to banking restrictions, have resorted to attacking bank headquarters with fireworks. These scenes of discontent are symptomatic of a broader economic catastrophe that has enveloped Lebanon since 2019. The country has seen its gross domestic product halve, while poverty now engulfs 80 percent of its population, signaling a drastic decline in living standards and economic stability.

There is no decent life in Lebanon, the economy plummeted with no relief in sight, people do not have freedom of speech, the government is non-existent.

Lebanon is under a dictatorship.

Hassouna is the dictator of Lebanon.

Lebanon is under a dictatorship.

— Fatima J (@FJ_Deen961) February 24, 2024

The specter of a wider conflict looms large over Lebanon, particularly with the ongoing tensions between Israeli forces and Iranian-backed Hezbollah along the southern border. Any escalation into a full-blown war would be catastrophic for Lebanon, a country still healing from the scars of past conflicts, including a 15-year civil war and the 2006 war with Israel. Unlike in 2006, when Lebanon had a functioning economy and government support, today it grapples with systemic disintegration, including a government in paralysis, a currency in freefall, and banks in a state of insolvency, effectively locking away the savings of countless Lebanese.

The Lebanese government seems to believe that it will get better terms as international desperation to stop Hezbollah’s attacks grows.That Western benefactors have reportedly floated a willingness to bankroll Lebanon’s failing economy to “sweeten the deal”:https://t.co/IAu1TQrvnF

— FDD (@FDD) February 16, 2024

This economic collapse is not merely a result of internal failures but is also tied to Lebanon's geopolitical entanglements, particularly its relationship with Hezbollah. The group's confrontations with Israel have drawn the country into broader regional conflicts, exacerbating its economic woes. A full-scale war with Israel, therefore, represents a catastrophic threat that could push Lebanon from economic despair into utter ruin.

The leadership vacuum and economic collapse have significantly weakened Lebanon's position on the international stage, particularly its once-strong ties with Persian Gulf nations, now strained by Hezbollah's regional maneuvers. This isolation is compounded by a discernible lack of interest from younger Gulf leaders, leaving Lebanon to rely heavily on remittances from its diaspora. These contributions, vital for keeping the economy afloat, are under threat if the situation deteriorates further into conflict.

Amos Hochstein, Biden’s point man on Lebanon, explains, with euphemisms, that the U.S. is going to deliver pallets of cash to Hezbollah. “We’re going to have to do a lot of building-up of the Lebanese armed forces, building-up the economy in south Lebanon.” This was the strategy… pic.twitter.com/RCYC92aUKD

— Mike (@Doranimated) February 18, 2024

The local infrastructure, already crippled by the financial crisis, faces an existential threat from any potential escalation in hostilities. Public services, the health care system, and the military are all critically underfunded and understaffed, raising serious concerns about Lebanon's readiness to withstand further shocks. The country's health care system, once a regional beacon, is now overwhelmed, with a significant portion of the population dependent on aid agencies for medical treatment. The military's capacity is similarly diminished, with soldiers forced into secondary employment to support their families, underscoring the gravity of the crisis.

The potential for war also casts a long shadow over Lebanon's public health system, already battered by the economic crisis and the COVID-19 pandemic. Hospitals, lacking in resources and staff, would be overwhelmed by the casualties of conflict, deepening the humanitarian crisis.

International assistance, though substantial, has been insufficient to stem the tide of Lebanon's decline. Despite contributions from countries like the United States, Qatar, and France, aimed at shoring up the military and public services, the fundamental issues remain unaddressed. Lebanon's deep-seated problems, exacerbated by the absence of reforms and the looming threat of conflict, point to a grim future.

This report portrays the state of the economy in Lebanon but fails to mention one of its major causes - the highest refugee per capita burden in the world. War with Israel would be disastrous to economically stricken Lebanon ⁦@washingtonpost⁩ https://t.co/hxAfg5ynEf

— Brigitte Khair-Mountain | بريجيت خير ماونتين (@Brigitte_khair) February 25, 2024

In sum, Lebanon stands at a crossroads, with its very survival at stake. The nation's resilience, tested by years of conflict and crisis, faces perhaps its greatest challenge yet. Without substantive reforms and a de-escalation of regional tensions, Lebanon risks not only economic collapse but a humanitarian disaster that could have far-reaching implications for its people and the broader region.