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A man comparing US Dollars with Lebanese pounds, in Beirut, Lebanon.

Reuters

What We’re Watching: Digital payment lifelines for cash-strapped Lebanon, digital solutions for overcoming COVID, fintech & the war in Ukraine

Digital trade offers Lebanon a lifeline

Lebanon’s economy has imploded following decades of government mismanagement. Its currency has lost more than 90% of its value against the US dollar since 2019, and the banking sector is in shambles. When foreign capital dried up, the government adopted strict capital controls preventing Lebanese from withdrawing dollar savings. This has led to mass demonstrations and even fake bank heists – desperate bids by some to get their hands on their own money. The International Monetary Fund has told Beirut to reform its zombie banking sector in order to unlock bailout funds – but to no avail. As a result, many have turned to digital payments. Digital wallets like Purpl and peer-to-peer money transfer apps allowing users to pay businesses directly have become a lifeline for the country’s 6.7 million people, many of whom rely on the 15-million-strong Lebanese diaspora to stay afloat. Dima Assad, a manager at Nada Debs, a Beirut-based interior design company, said her company had to switch to a payment gateway called PayTabs, based in the United Arab Emirates, when credit card payments in US dollars were blocked. What’s more, fintech offerings have been a game-changer for the 55% of people in Lebanon who don’t have access to bank accounts. Unbanked people used to line up at Western Union – and paid hefty fees – to send and receive money, but now they can use smartphones or laptops (78% have internet access) to access funds while incurring lower transaction fees. The economic situation in Lebanon remains dire, but digital trade offers a lifeline.

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From left to right, Lega leader Matteo Salvini, Forza Italia leader Silvio Berlusconi, and Brothers of Italy leader Giorgia Meloni during a campaign rally in Rome.

REUTERS/Yara Nardi

What We're Watching: Italian election, Chinese anti-corruption drive, Lebanese bank shutdown

Italy votes!

Italians head to the polls on Sunday and are likely to elect Italy’s first far-right leader since World War II. Giorgia Meloni, 47, who heads the Brothers of Italy Party (which has neofascist roots) is slated to become Italy’s next PM. Polls indicate Brothers will win about a quarter of the vote, while her three-party coalition, including Matteo Salvini’s far-right Lega Party and Berlusconi’s Forza Italia, is projected to secure around 45%. Four years ago, Brothers – established in 2012 – reaped just 4% of the vote, but it has benefited recently from the left’s implosion as well as Meloni’s refusal to back the centrist Draghi government, which collapsed this summer, making her the most formidable opposition figure (Salvini and Berlusconi backed Draghi). Italy has convoluted voting rules but will be voting on 400 seats in the Chamber of Deputies (lower house) and 200 seats in the Senate – the winning coalition needs a majority in both. Meloni aims to dilute the EU’s power over Italian affairs, though she believes Rome must preserve close ties with Brussels, and she supports EU and NATO efforts to contain Russian aggression. Read this primer to learn more about what Meloni does – and doesn’t – stand for.

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Supporters of Lebanon's Hezbollah leader Sayyed Hassan Nasrallah hold flags during an election rally in Tyre, Lebanon.

Reuters

Can this election save Lebanon?

Corruption and mismanagement have become the hallmarks of Lebanese governance.

In 2019, the country’s ill-managed economy imploded thanks to a self-serving political elite, and in 2020, an explosion resulting from government negligence killed 230 people at a Beirut port. Subsequent attempts to stonewall the criminal investigation of the blast again exposed the greed and malice of those in charge.

In short, things need to change.

Voters will cast their ballots on May 15 in general elections for the first time since all hell broke loose three years ago. Is there any hope for a political turnaround, or will the country continue rolling over a cliff?

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Lebanon is on fire. Where's the fire brigade?

It's been 365 days since twin blasts at a Beirut port decimated Lebanon's capital. More than 200 people were killed and some 7,000 were injured, yet accountability has been scarce. There is ample evidence that multiple Lebanese officials knew that ammonium nitrate was being improperly stored at the port. Four high-ranking politicians, including former PM Hassan Diab, have been charged by a Lebanese judge, but they all refuse to cooperate with the ongoing investigation.

Since then, Lebanon's already-dire economic and financial crises have only intensified. The Lebanese pound, the national currency, has plummeted, losing 90 percent of its value since 2019, when the country's economic crisis erupted. And more than 50 percent of the population is now living below the poverty line.

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Belarus Human Rights Abuses Stacking Up | Beirut Blast One Year Later | World In :60 | GZERO Media

Belarus human rights abuses stacking up; Beirut blast one year later

Ian Bremmer shares his insights on global politics this week with a look at the deteriorating human rights situation in Belarus, Delta variant woes, and Lebanon one year after the Beirut blast.

An Olympian refuses to return home to Belarus and an anti-Lukashenko activist has been found dead in Ukraine. What's going on?

Yeah. That anti-Lukashenko activist was found hanged in a park in Kiev. Once again, not exactly likely a suicide. These anti-Lukashenko activists have a way of turning up injured or dead. It's a horrible regime. Their friends are limited largely to the Russians. That's about it. The economic pressure is growing from Europe, from the United States, very coordinated. But the problem is a very hard to do much to Lukashenko when he has not only support of his military, but also the support of most of the workers in the country who aren't prepared to strike because they want to ensure they still have jobs. I expect this is going to continue, but human rights abuses are stacking up. It is nice to see that the Americans and the Europeans are coordinating policy as well as they have been.

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Gabriella Turrisi

The Graphic Truth: Salad crisis — Lebanon's food prices soar

Lebanon's economic implosion and currency crisis have caused food prices to surge. Lebanon imports around 80 percent of the food it consumes, and so the sharp depreciation of the lira vs the US dollar has made some staples five times more expensive than when the economic crisis first hit in October 2019. This year's Ramadan was very painful for many Lebanese, as the cost of an Iftar meal — which Muslims break their fast with each day — has increased a whopping 300 percent in just two years. We take a look at how food prices have risen as a result of the plunging value of Lebanon's currency over the last 15 months.

What We're Watching: Hariri throws in the towel, China calls for Pakistan blast probe, Poland hits EU over judiciary

Lebanon's PM-designate resigns: Things continue to deteriorate in crisis-ridden Lebanon. On Thursday, veteran politician and prime minister-designate Saad Hariri resigned eight months after being tapped to form a technocratic government after a series of crises and disasters, chief among them the devastating explosion at a Beirut port last August. Lebanon's Hezbollah-aligned President Michel Aoun refused to accept any of Hariri's proposals, because he said they did not reflect the country's sectarian power-sharing requirements. But Hariri pushed back, saying that Aoun wanted too many government spots for his allies. The Lebanese pound dipped to a new low after Hariri called it quits Thursday, reaching 21,000 to the US dollar. It's unclear who will step in now to form a government, a prerequisite to releasing billions of dollars in aid from former colonizer France and others. Meanwhile, the EU has said it'll impose sanctions on Lebanese officials if progress remains static.

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What We're Watching: Bolsonaro criminal probe, Lebanon's "social explosion," Zuma defies court, Putin's definition of champagne

Bolsonaro probe heats up: A smattering of protests broke out in cities across Brazil this weekend after the Supreme Court gave the go-ahead for a criminal probe into President Jair Bolsonaro for "dereliction of duty" linked to procurement of COVID vaccines. What's this all about? A recent congressional inquiry into Bolsonaro's broad handling of the COVID crisis revealed that he knew — and failed to report to authorities — a shady deal negotiated by his health ministry to buy jabs from a private Indian pharmaceutical company for more than 10 times the price originally quoted. The allegations have sparked fresh calls to impeach Bolsonaro, but conviction would require support from two-thirds of the lower house of Congress, an unlikely scenario given Bolsonaro's broad web of alliances in parliament. Still, the unfolding political drama is indeed having an impact on the street cred of the populist president, who rose to power on an anti-establishment, anti-corruption platform: Bolsonaro's net approval rating now hovers at -23 percent. Brazilians, who have been pummeled by the COVID crisis, will surely be watching the probe very closely ahead of next year's presidential vote. The timing is not great for Bolsonaro, whose nemesis, leftwing former president Lula, is gaining steam in the polls.

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