Beirut's long road to recovery, DFC's deal under scrutiny, and USAID's bizarre Twitter scandal: This week in development

Soldiers stand at the site of the port explosion in Beirut. Photo by: Thibault Camus / Pool via REUTERS

Beirut confronts a disaster on top of a pandemic on top of a crisis, the U.S. International Development Finance Corporation faces scrutiny for a domestic turn, and a bizarre scandal unfolds at the U.S. Agency for International Development. This week in development:

A massive explosion rocked the port area of Beirut on Tuesday, killing at least 137 people and injuring 5,000. The disaster occurred when roughly 2,750 metric tons of ammonium nitrate exploded in a warehouse, sending a shock wave through the city that leveled buildings, shattered windows, and damaged or destroyed critical infrastructure including hospitals, grain silos, and a port that was vital for the country’s economy. Hundreds of thousands of people have been displaced from their homes, just as Lebanon is seeing a surge in coronavirus cases — which officials expect will accelerate due to the disaster — and in the midst of an economic crisis that had already seen the value of the country’s currency in free fall. Initial estimates place the cost of the damage in the billions of dollars, and humanitarian groups present in the country likened the situation to the immediate aftermath of an earthquake. “An estimated 300,000 people are homeless and in the next few days they will need food, water, shelter and hygiene and sanitation support,” said George Antoun, Mercy Corps country director for Lebanon, in a statement. “Then, clean-ups and help to reopen small businesses will need to be prioritised. With 51% of people in Lebanon relying on small businesses for their livelihoods, they cannot afford to be out of work,” he added. On Wednesday, a plane carrying 20 metric tons of health supplies from the World Health Organization landed in Beirut. French President Emmanuel Macron arrived in the city Thursday and pledged to lead an international aid effort for Lebanon, a former French protectorate. His appearance in public was reportedly met with sharp questions about how he would ensure international aid actually reaches the people who need it, as citizens have lost trust in public officials, whom they accuse of chronic corruption and negligence. The explosion itself is believed to be the result of the government’s failure to properly dispose of highly volatile cargo that had been confiscated and sat in the port since 2014.

U.S. lawmakers and the U.S. Securities and Exchange Commission are now both investigating the U.S. International Development Finance Corporation’s decision to provide a $765 million loan to Eastman Kodak, causing the company’s stock price to soar and directing unprecedented public attention to an agency that was created to invest in low- and middle-income countries. DFC’s letter of interest was signed on July 28 under the Defense Production Act in an effort to transform the former photographic film company into a manufacturer of pharmaceutical chemicals to aid in America’s domestic response to COVID-19. “According to DFC, the loan would be DFC’s first use of DPA authority and would support Kodak, an organization that was on the brink of failure in 2012 and was unsuccessful in its previous foray into pharmaceutical manufacturing,” five Democratic members of the House of Representatives wrote in a letter to DFC CEO Adam Boehler on Tuesday. In an interview with Devex, Boehler said: “Look, any time you get into a deal there's always a risk and in this case we signed a letter of intent, it's not a done deal. If there's any issues in the deal then we won't go forward with the deal, just like we would do in any other deal.” The SEC, an independent federal agency that works to ensure market fairness, had already opened an investigation into the stock surge that accompanied DFC’s loan announcement and the disclosure of information about the deal, according to The Wall Street Journal.

The U.S. Agency for International Development is at the center of a bizarre and convoluted drama involving a controversial political appointee, disputed Twitter messages, threats of a tell-all press conference, and outlandish allegations in multiple directions. USAID was already in turmoil due to a burst of recent political appointments that have driven a wedge between career staffers and leadership and have prompted U.S. lawmakers to demand that officials with histories of discriminatory statements and positions be removed from the agency. The situation escalated to a new and absurd level Monday when one of those appointees, now-former Deputy White House Liaison Merritt Corrigan, appeared to post Twitter messages alleging anti-Christian bias at USAID and a plot by Democratic lawmakers to have her removed, while also announcing plans to reveal more in a press conference with two well-known provocateurs and conspiracy theorists. Corrigan was fired from USAID that afternoon. She later denied ever sending the tweets — saying that she had lost control of her phone and Twitter account due to “an abusive scheme” — apologized for the messages sent in her name, and clarified that she would not be participating in a press conference.

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.