Lebanese army soldiers stand guard outside the central bank headquarters in Lebanon's southern city of Sidon (Saida) as anti-government protesters rally over the country's deteriorating economy, on April 27, 2020. Photo: AFP

A flurry of business jets departed from Beirut airport overnight as Lebanese with means fled a fierce new round of public anger directed against the country’s financial sector.

The open source aviation site Flightrader24 showed at least a dozen business crafts, including 16-passenger Bombardiers and 12-passenger Embraer Legacys, departing for Riyadh, Athens, and other regional destinations in a span of 24 hours.

With private jet bookings averaging $100,000 for Beirut to Paris, a chartered private jet with ten passengers chipping in would become the equivalent of flying first class in the high season.

The Beirut airport is closed to commercial travel due to Covid-19, but private charters fall under a different set of laws.

The flurry of departures came hours after a judge in the southern city of Tyre slapped a travel ban on the leadership of Lebanon’s BLOM Bank from leaving the country.

Monday’s unrest, which pitted demonstrators against the Lebanese armed forces, left one protester dead in the northern city of Tripoli, unleashing a new wave of anger in the streets by Tuesday.

Lebanon’s national currency, spiraling against the dollar for months, is now in free fall. The flight of billions of US dollars amidst rigid capital controls and skyrocketing prices, has stoked widespread anger against the banking sector.

Protesters in the neglected northern city of Tripoli attacked successive bank branches on Monday night, armed with Molotov cocktails. The Lebanese army employed live ammunition in its response, leaving a 26-year-old dead from his wounds by Tuesday. The army said 54 soldiers sustained wounds in Tripoli and elsewhere in the country.

The death of protester Fawaz Fouad al-Seman was announced by his sister Fatima, who has been a stalwart of anti-corruption protests that launched in October of last year, and which have returned with vengeance after six weeks of Covid-19 lockdown.

In a video from November, Fatima stands inside a branch of Lebanon’s BLOM Bank demanding the release of depositors’ funds (by then, subject to arbitrary capital controls), taxes on the banking sector, and the return of all profits made via the controversial practice of “financial engineering.”

In a Facebook post on Tuesday, Fatima referred to her brother’s death as “martyrdom” for the the cause of revolution.

Tremor to earthquake

Lebanon’s financial meltdown and public anger has been building for years.

Lebanon’s central Banque du Liban began using “financial engineering” in 2016 to prop up the country’s longstanding dollar peg, offering steep interest rates for local currency accounts – in exchange for hard foreign currency.

Some economists compared the practice to a Ponzi scheme, dependent on a triangle of mutually assured destruction between BdL, the banking sector, and the political and business elite.

For 22 years, the peg allowed Lebanese to deal in local currency and dollars almost interchangeably, depositing earnings in Lebanese pounds one day, and using them to import in dollars the next. It was taken for granted that 1,507.5 LBP, casually rounded to 1,500, was worth one US dollar.

The first tremors of the coming crisis emerged in December 2018, as reports emerged that approximately 855 billion worth of Lebanese pound deposits (then $570 million) had been converted to dollar accounts.

The revelation raised fears that Lebanon’s two-decade-old peg to the dollar, consistently upheld as a sacrosanct bedrock of stability, was slipping, and that high net worth individuals were beginning to take measures to protect themselves.

As the rumors filtered down to the public, many banks encouraged depositors to keep their accounts in Lebanese, offering interest rates as high as 15%.

By September 2019, gas stations were going on strike as Lebanon’s withering supply of foreign currency threatened their ability to buy fuel when customers were entitled to pay at fixed rates in Lebanese.

The peg, which began slipping last autumn, has in recent weeks plummeted to 3,000 and then 4,000 on the parallel market, resulting in skyrocketing prices and portending a new cascade of outrage and violence driven by hunger.

Grocery stores, one of the few essential businesses open, have found themselves unable to keep up with price shocks.

In Tripoli, some grocery shops closed their doors over the past week, telling customers they are unable to set prices that ensure they can buy new stock. At the popular Hoz supermarket outside Tripoli, which offers free gloves and face masks to customers at the door, many goods lacked prices on Monday.

“This is the time to provide material support to increasingly desperate, impoverished and hungry majority of Lebanese all around the country,” tweeted UN envoy Jan Kubis. Where that money would come from given the country’s March default is unclear.

On Tuesday in Tripoli’s main square, protesters converged for funeral prayers for their martyr. Soldiers were seen standing by, as new attacks on the banks began, even as a balloon seller scouted for customers in this city on edge.

This story has been updated to include that private planes fall under a different set of laws and are able to operate during the Covid-19 lockdown. It was also updated to include more open source information about flight patterns.

Alison T Meuse is the Asia Times Middle East editor and correspondent.