Economy minister warns of decisive next 24 hours as Lebanon nears point of no return in war

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Lebanon’s Minister of Economy and Trade Amin Salam said on Tuesday that Lebanon risks plunging into chaos without an immediate political solution to Israel's conflict with Hezbollah, as the country faces a humanitarian crisis that costs at least $135 million a month.

Israel's air assault, the most intense since 2006, has displaced nearly 500,000 people, Lebanese Foreign Minister Abdullah Bou Habib said on Tuesday. Meanwhile, the Israeli army is preparing for a possible ground invasion, and the US and France are looking for a diplomatic resolution.

“Today, we're hearing that a diplomatic resolution is being worked on, which should yield either a negative or positive outcome within the next 24 hours,” Mr Salam told The National.

He stressed the need for an immediate political decision at a regional level to halt the conflict in both Gaza and Lebanon, warning that the situation could spiral further.

Lebanon's economy has been in the doldrums since a crushing financial crisis struck in 2019, sending GDP plummeting from almost $52 billion in 2019 to around $23.1 billion in 2021, according to World Bank figures. The 2020 Beirut port explosion, political deadlock and now a year of near-daily strikes between Hezbollah and Israel have compounded the crisis, often leaving people without basic services.

Mr Salam said the time to act to save Lebanon from further financial ruin is now.

“Lebanon is at war, and we are at a critical point,” he said. “Time is our enemy. If we can stop the war now, there could be a swift recovery. But if escalation continues without resolution within the week, we are heading into a very dark place.

“I would say we will be going to a point of no return”, he said, adding that the financial needs of the humanitarian crisis are likely to multiply two or threefold if a ceasefire is not reached.

A year of tit-for-tat exchanges of fire between Israel and Hezbollah turned into an open-ended war as Israel detonated explosives hidden in thousands of pagers and walkie talkies belonging primarily to members of the Lebanese militant group, followed up with wide-ranging air strikes across the country, killing nearly 600 people – including more than 50 children – since they began on Monday.

Hezbollah launched salvos of missiles of its own into Israel, including one missile that reached as far as Tel Aviv before being shot down. A number of the group's senior commanders have been killed by Israeli attacks in recent days.

The bombings since Monday have created “endless” humanitarian needs Lebanon cannot meet on its own as thousands flee the south and east of the country under bombardment by Israeli forces, who say they are targeting sites used by the militant Hezbollah group. On Wednesday, the Lebanese Army helped 60 people leave the Christian town of Alma Chaab close to the border with Israel after extensive strikes overnight.

Thousands are sheltering in schools and other public buildings in Beirut after fleeing north, as volunteers fill gaps left by Lebanon's barely functioning state apparatus.

“The displaced are in need of everything, from medical supplies to food and hygiene products. A safe and clean environment is also essential,” Mr Salam said. At current levels, the Lebanese government will need $135 million a month to stay afloat and help those who need assistance.

“It will be a disaster if we don't receive full assistance from donor countries, neighbouring nations, and friendly states.” So far, he said, about 40 per cent of the country's initial needs have been covered by international donors.

The latest escalation follows a year of attrition that had already severely strained the cash-strapped country. “Losses are in the billions,” he said.

“We have lost a lot. The agricultural sector has been destroyed, burnt, or contaminated. Tourism, which used to bring in $5 billion to $7 billion annually, is gone. The two major sectors we relied on have been hit hard. There's no growth, not to mention the loss of lives and the destruction of buildings, homes, institutions, and businesses.”

He said that the scale of destruction is “massive and growing by the hour”.

“Lebanon doesn’t need much to recover. We can transition quickly, but we need at least stability and peace. Once that’s achieved, I believe we can move swiftly towards recovery.”