A broken system, a broken city: Beirut

Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. Among the unknowns early in the pandemic was just how fatal COVID-19 was. The Economist's Excess Death Tracker was the first to parse mortality data distinguishing different causes of death. And now it's got more and better numbers to work from. And workers can return to the office in England this week, but few are rushing back. We look at how the view of working from home has changed, both among bosses and worker bees, and how compelling the draw of watercooler chat may end up being. First up, though, In Beirut yesterday, countless people began the painful work of fixing homes devastated by a massive explosion on Tuesday. One woman, Huda Melki, posted a video of her mother-in-law playing the piano as others swept up broken glass. The music is bittersweet. The city is reeling.

The moment of the blast, no one was quite sure what had happened. There was a sort of deep bass sound for 7 or 8 seconds. There was a rumbling. And we thought it was a localized explosion, maybe a gas main that had blown up across the street or a car bomb in the neighborhood.

Greg Carlstrom is our Middle East correspondent.

I was at a café at the time. Everyone, of course, left the café and started making their way home. And it was only on the way back down towards the Mediterranean towards the port that I started to realize the scale of the damage. There was, of course, broken glass everywhere, carpeting all of the streets, all of the sidewalks. Passed through an intersection where there were several women sitting in the median holding cloth and scraps of fabric, were bleeding from the head. They'd obviously been hit by glass. And every building that you passed by, not only the windows blown out, but the aluminum window frames blown off. And so you realize that this was not a localized incident, but rather something that had affected the entire city center.

The blast was felt as far away as Cyprus. It registered as an earthquake in Jordan. It had come from the port of Beirut, where something had set off an explosion of staggering size, sending up a white mushroom cloud, then a vast plume of orange smoke. Yesterday, the government placed a number of port officials under house arrest, pending an investigation. And declared a 2-week state of emergency. Residents are still coming to grips with the shock of the blast.

It felt like it went inside us, like it passed our soul, the wave. I saw something bright and I lost my hearing for a few seconds, and the explosion just went up.

The human toll of the explosion has been catastrophic. The death toll, officially more than 100 so far, and that number continues to grow. As rescue workers find victims who were buried in the rubble. More than 5,000 people injured by the blast, and many of them had to go into a hospital system that was already stretched thin. We'd had a spike in coronavirus cases in Lebanon over the past few weeks. Some hospitals themselves were damaged by the explosion. The hospital, St. George Hospital, across the street from where I live, was so badly damaged that it had to halt operations. And when I went by the hospital You saw patients, some of them, you know, still wearing their hospital gowns with intravenous lines in their arms, bloodied from, from flying debris and shrapnel. 4 nurses were killed. 15 patients on respirators died when the machines failed. The other immediate impact is, according to officials in Lebanon, about 300,000 people were left homeless by the explosion. That's about 5% of the population of the entire country.

And what do we know so far about what caused the explosion?

It seems to be the result of unbelievable negligence, even on the scale of the perennially negligent Lebanese government. Back in 2013, customs officials in Lebanon confiscated the cargo of a Russian-owned ship that was traveling to Mozambique. The cargo was 2,750 tons of ammonium nitrate, which is a highly explosive chemical that is used mostly to make either fertilizers or explosives for mining and quarrying and other industrial uses. So this material was confiscated, it was put in a warehouse at the port, and for 6 or 7 years it just sat there. There was some talk of maybe exporting the stuff or giving it to the army to use, but this required approval from the Lebanese judiciary. That approval never came. You had officials at the port and within security agencies who warned this was tantamount to keeping a giant bomb on the doorstep of the country's capital. Those warnings went unheeded. And of course, tragically, on Tuesday, it all exploded.

But I mean, what kind of government would ignore warnings about tons and tons and tons of explosive material just sitting in a city center?

The Lebanese government would. It's almost par for the course for Lebanon's political class. This is a government that for more than a decade could not agree on a budget. This is a government that for almost 30 years allowed the same central banker to run the central bank, the Banque du Liban. And to run effectively a state-sanctioned Ponzi scheme to defend the currency peg. It's a country that created a political and economic model that was totally unsustainable, invested hardly at all in basic services. Even in good times, Lebanon can't provide 24-hour electricity, routinely struggles to pick up the trash which piles up in the street. It is a perennially negligent government, and this is of course a catastrophic example of that, but it's of a piece with the behavior of this government over the past 30 years.

So this is a population and economy that was suffering quite a bit even before the blast.

It was. The country has been slipping into a profound economic crisis since October, when the currency, the Lebanese pound, which for decades has been pegged to the dollar, began to break away from that peg. Since October, it's lost about 80% of its value. On the black markets, which has contributed to runaway inflation in a country that imports almost everything from food and fuel to consumer goods. So inflation running around 80% right now, and for food around 200%. Prices have become astronomical this summer. We've had fuel shortages that have caused the blackouts in Beirut, normally 3 hours a day, to stretch as long as 20 hours a day this summer. And the backup generators that people rely on to provide electricity when the state cannot those are either burning out from overuse or running out of fuel. Just one crisis after another at this point, which has led to widespread poverty in the country. The official figures, the government thinks around half the country is now below the poverty line. That could rise as high as 75% by the end of the year. There's been a spike in petty crime driven simply by desperation. There was one man who was caught on CCTV robbing a pharmacy for diapers. Another man who robbed someone at knifepoint on the street in a once busy part of town and then came back to apologize for doing it and said he needed the money to feed his family.

So it sounds as if a years-long problem has gotten really quite a lot worse very recently. I mean, why hasn't the government been able to sort of keep things from getting so much worse?

The current government was installed in January and meant to be a technocratic government that would tackle this economic crisis and negotiate a rescue agreement with the IMF. But 6 or 7 months later, it's made almost no progress. The negotiations with the IMF have really stalled at this point. They've had about 20 rounds of talks, but Lebanon is not even really negotiating with the IMF yet. It's still negotiating with itself. You have the cabinet on one side and the parliament on the other backed up by the banking sector, which are having this very arcane dispute about the scale of the losses in Lebanon's financial sector, about how bankrupt the country is effectively. And so you have this surreal situation where instead of Lebanon negotiating with the IMF, Lebanon is negotiating with Lebanon. The fund has told Lebanon that talks are not going to advance unless there's an agreement on the size of the losses, or if the cabinet pushes through a few meaningful reforms— a capital controls law, changes to the electricity sector, things like that. Neither of these things have happened, and there are increasing calls for this government to step down.

Do you think that's the way forward? I mean, what do you think should be done here to bring Lebanon back to a functional state?

Well, the problem is, if this government steps down, what replaces this government? And a lot of the pressure on the government right now is coming from the traditional power brokers in Lebanon, the sectarian ex-warlords who have divvied up power in this country for decades since the end of the civil war in 1990. This power-sharing agreement they have, it was designed to keep the peace and prevent a return to conflict after the war. But it's been captured by the elite, which hands out power based on sect, which runs a massive patronage network. The World Bank estimates it costs the country about 9% of its GDP each year. But if it were to step down without broader changes to the country's political system and this power-sharing system, it would simply be replaced by the same cast of characters who have ruined the country over the past 30 years.

But that power-sharing system was there to keep the peace, to prevent a return to civil war.

—And that was the argument for years, for decades, when people in Lebanon would complain about the corruption and the negligence and the inefficiency of their government. The response would be, well, at least this is better than a return to the bad old days. Even before what happened on Tuesday, even before the explosion, though, that argument was beginning to lose its weight with a lot of people here. You have a younger generation of Lebanese who don't have the same memory, of course, of the civil war that their parents or their grandparents had. And so as the country has slipped further and further into crisis over the past year, people have been more willing to break away from this system than they were before. And I think the argument that, well, there could be violence if the power-sharing system was stripped away, after what happened on Tuesday, after half of Beirut was destroyed by the incompetence of this government, I think that argument is not going to carry weight with a lot of people.

Greg, thanks very much for your time. Thank you.

For a lot more on-the-ground analysis like this from our international network of correspondents, subscribe to The Economist. To find the best introductory offer wherever you are, just go to economist.com/intelligenceoffer. The official global death toll from COVID-19 has recently passed 700,000. Yet calculating the precise number of fatalities caused by the pandemic is a tricky business. Many who die from the disease aren't included in official figures. Others have died from pre-existing conditions exacerbated by the virus. And there are more indirect effects. Diseases such as cancer have gone undiagnosed, and people who have needed treatment have stayed away from hospitals for fear of contagion. One way to account for these unknowns is to look at what are called excess deaths.

Back in late March, The Economist was the first organization to compile data on excess deaths from coronavirus in different countries throughout Europe. And since then, we've launched the first interactive tracker of that data and the first publicly available resource for that data.

James Tozer is a data journalist at The Economist.

In the last couple of weeks, we've relaunched the tracker page. We've now added a whole load more countries. We have data for 23 different nations and cities around the world. And we've made the charts more interactive and easier for readers to inspect.

And so tell me about the merits of going about it the way that you have, as opposed to just looking at official figures.

The idea for this came from some conversations I had in late March with some people in Northern Italy, which was sort of hit hardest and first by this. They were saying the official statistics that you're seeing for our part of the world are really undercounting the true number of deaths that we're seeing, because there are lots of people dying who aren't being tested. And certainly in Italy and in most other countries, the official death tolls only include people who've been tested before dying. And so it was pretty clear from early on that the official statistics, particularly in places where hospitals had been overwhelmed, as was the case in Italy, that the official statistics were going to be quite a severe undercount. And then we started looking at Spain and France as well, which at that point in late March, early April, had also been hit harder and earlier than the rest of Europe, to be honest, than the rest of the world. And it was clear that a sort of similar pattern was emerging.

But having established that you want to isolate these excess deaths, then how do you go about compiling them?

In some respects, it's quite a simple methodology. You're just looking at the total number of people who have died from all causes in a given region in a given time period, and then looking at how many people usually die in that same region in that same period on average. So we usually look at the same week or the same month on average in the previous 5 years, and that gives you a sort of number above or below expected. And what you tend to see is that in big medical crises— so a really good example is Hurricane Maria in Puerto Rico, the official statistics suggested that only 60 people died from that hurricane. In fact, excess deaths were about 3,000 because the official statistics were including people who died before they were even able to get to hospital. And that's what we started doing here is we said, right, rather than looking at the official number of people who've been tested before dying, we know that loads of people are dying without being tested. Let's just look at the total number of people who are dying in these regions compared to normal. So it's quite a blunt tool and it will miss some things. Like for example, we know that there are fewer deaths that occur in lockdown from say car accidents or violent deaths. And so on. On the other hand, there may be an increase in deaths from, say, heart attacks because people don't show up to hospitals, to accident and emergency departments unless they can absolutely avoid doing so. It's not perfect by any means, but it gives you a pretty good idea of what the overall impact, both directly and indirectly, of the pandemic is.

From what you've seen so far, how would you say that the excess death figures compare with what's being published as the official coronavirus death figures?

Almost universally, they're higher than the official figures, although that varies quite a lot by which country you're in. The excess death rates are certainly much higher than the official death rates in developing countries, which is sort of unsurprising because they generally have less testing capacity than Western countries. But actually, one of the biggest discrepancies between official figures and excess deaths is in Britain.

And so what's changed in the most recent update to the tracker then?

We've added a whole load of new data for new countries, in particular focusing on Latin America, which has pretty good reporting of death certificates. The picture there is pretty grim. Ecuador saw a massive spike. Peru is pretty bad. Chile seems to be picking up. Brazil is bad, but our data is slightly delayed there. I think one of the most alarming places is Mexico City, which has the highest excess death rate of any city that we've looked at. We've only got data for a handful of countries outside the West because the infrastructure to measure this stuff is generally worse. Nowhere in sub-Saharan Africa. We don't have it for Southeast Asia. But I think increasingly the picture is going to be pretty grim in the developing world, and we'll try and add as much data as we can that sort of tells that story.

And what about in the case of America, which, as it were, leads the numbers on this?

So America certainly leads the numbers in terms of the absolute number of deaths, both in its official statistics and the excess deaths. But if you normalize that per head of population, it's actually less than most places in Europe. The death rate is less than half than that of Britain. But the interesting thing about America is that you've obviously got data for each state. Each state reports this separately.

And so that allows you to get a much richer picture of what's going on What does all this work that you've done tell you about closing that gap between the official figures and the excess death figures?

This allows us to get a much better picture of what the burden of coronavirus actually looks like, what the toll is like. And therefore, when we look at it retrospectively, it allows us to understand which policies were and weren't effective with tackling with it. And in that sense, I think this is a really important piece of data journalism and research. We've published all of the data online. It's in front of our paywall, so you can go and download the data or the source code. It is already being used for research into effective policy. And our hope is that by understanding better what has happened, it will allow governments everywhere to prepare better for what comes next.

James, thanks very much for your time. Thank you. In England this week, office workers are being told they can officially return to their workplaces.

Instead of government telling people to work from home, we're going to give employers more discretion and ask them to make decisions about how their staff can work safely.

But so far, it seems few Britons are rushing back to the office. Ridership on London's Underground is still far below pre-pandemic levels. Part of that reluctance to return could be down to health concerns. But maybe by now, people are thinking differently about working from home.

In the past, working from home was seen as a way of slacking. Lots of people did work from home, but the vast majority majority of people came into the office. And so there was a sense of isolation among the people from who were working at home and a sense among the people in the office that they were getting away with something.

Philip Coggan writes Bartleby, The Economist's column on work and management.

What's remarkable about the pandemic is that everybody has been working from home and people in charge have suddenly realized that it's possible and that their employees can be productive. So that's why I think we've moved into a whole new area of attitudes towards work.

So now, now that we are all in the same boat, how's it working out?

There's a study which has been published in the Harvard Business Review by Harvard academics and others which have looked at the experience of employees during the pandemic. They found that in the first couple of weeks, employees struggled to sort of get a handle on it, but once they got into a routine, they actually started to enjoy it and stress levels fell, and their productivity seems to be fine. The only snag is that they seem to be working 1 to 2 hours more a day, but I suppose that's offsetting the time they would have spent commuting. And there was a little loss of morale in the first few weeks, but after a month or so, that all settled down as well. So it's working remarkably well. If we'd had this discussion a year ago, we probably wouldn't have figured it would have turned out as well as it has.

So that being the case, what is it that's going to bring us back to the office once it's allowed?

Well, there are two things I think that will bring us back to the office. The first is from the point of view of the employees. Some will miss the camaraderie of being in the office, and younger people in particular make contacts, and they also learn the culture of the organization and get tips from older employees by being at work. And that's not so easy to do over Zoom or at home. And the second thing is that so far, companies have been kind of living off their accumulated social capital. Somewhere like The Economist, lots of people have worked here 20 or 30 years, so we know what we're doing, and we can get by. But eventually, new challenges will come up, new staff will be hired, and it won't be as easy for people to adapt to those new things while they're all separated. So over time, I expect the pressure will mount to return.

Well, what about employers themselves? There are certainly some, some new considerations now as we think about bringing people back in.

Employers didn't want people to work at home generally in the past, but they've— now that they've discovered that it does work, there's an obvious advantage to them from keeping employees at home, which is that they don't necessarily have to shell out for all that expensive office space. And if they do want to lure people back into the office, then they will probably have to spend some money, you know, putting up signs, putting in cleaning equipment, making doors open automatically, improving the air conditioning and all the rest of it. So that's a cost they might be more than happy to avoid.

The one thing you haven't mentioned is the kind of emergent effects of people actually sharing an office, the water cooler benefits.

Surely those figure in here? Absolutely.

There are advantages to being in the office, which is you get to chat with charming colleagues like yourself. And in those moments at the water cooler or by the photocopier, you might also pick up an idea of what the other person is doing, or they might give you inspiration to write a particular piece that you won't get through more formal interactions in a proper meeting. And that's what people lose. So there's evidence that these sort of weak links are one of the things that make companies more creative. It's not sitting around in a meeting where you're discussing an agenda. It's those little moments of serendipity that help inspire you.

So are you itching to get back to the office?

I am not itching to get back to the office, no. Not that I have anything against the office, but I'm not itching to commute to the office, you know, which is an hour journey either way. So I'm more than happy to wait for the gathering rush to come and be forced to go back to the office later on.

Philip, thanks very much for joining us. And see you soon?

Thank you, Jason.

That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts and see you back here tomorrow.