A graffiti entitled 'Cri$i$' by street artist Jonas, in Hamra, Beirut, June 8 2022 (Credit: João Sousa/L'Orient Today)
BEIRUT — Lebanon was the world’s fourth most “miserable” country in 2022, behind Zimbabwe, Venezuela and Syria, according to an annual “misery index” released this week by Johns Hopkins University economics professor Steve Hanke.
Lebanon’s woes this year are due largely to an “incompetent” caretaker government headed by Najib Mikati and “sky-high inflation,” according to a tweet by Hanke, who compiled the index based on unemployment rates, inflation and other economic data.
Just below Lebanon on the index is civil-war-hit Sudan, where according to UN figures hundreds of thousands of people have been displaced and hundreds killed since April this year.
But though Lebanon is indeed in the midst of a historic economic crisis, are indexes like Hanke’s the way to measure it?
Hanke, a conservative economist, is a senior fellow at the libertarian Cato Institute in Washington, DC and previously served as an economist in former Republican US President Ronald Reagan’s administration.
“Steve is a bit of a fanatic when it comes to hyperinflation, that’s his claim to fame,” says Sami Zoughaib, a Lebanese economist and research manager at The Policy Initiative.
“The first problem is, how can you really measure misery? It’s a bit of a stretch that a lot of economists try to do, to use models and numbers to conclude things that are behavioral and emotional.”
A man sells fruit in Tripoli, Feb. 9 2023 (Credit: João Sousa/L'Orient Today)
For example, says Zoughaib, there are no precise numbers for unemployment in Lebanon — and even if there were, the country’s dive into the informal economy means such rates would not come close to telling the full picture.
“In general in Lebanon today, every number you see, take it with a grain of salt, it’s all a bit murky. You need to think differently about the economy in Lebanon than you’re used to typically thinking about economies. That’s why many of these ‘misery’ indices are, I think, just gimmicks.”
That’s not to say there isn’t widespread economic hardship.
Lebanon’s economy entered freefall in 2019, with the lira eventually losing more than 98 percent of its value and essentially liquidating thousands of citizens’ life savings. Much of the country was plunged below the poverty line.
And though it has been a year since a staff-level agreement for an International Monetary Fund loan to help bail Lebanon out of the mess, the country’s political leaders have done little to pass the reforms needed to make the deal a reality.