As Lebanon subsidy crunch looms, people fear 'catastrophe'

Record ID: 1590407

  • Title: As Lebanon subsidy crunch looms, people fear 'catastrophe'
  • Date: 8th December 2020
  • Summary: BEIRUT, LEBANON (DECEMBER 8, 2020) (REUTERS) (SOUNDBITE) (English) UNICEF'S LEBANON COUNTRY REPRESENTATIVE, YUKIE MOKUO, SAYING: "Generally speaking, prices will hike and then people who are already suffering from their economic life may not even be able to afford more of tomorrow's bread for instance. We are very worried for instance about children's nutritional status."
  • Embargoed: 22nd December 2020 15:01
  • Keywords: Crisis Economy Hunger Lebanon Poverty Subsidies
  • Location: BEIRUT, LEBANON AND INTERNET
  • City: BEIRUT, LEBANON AND INTERNET
  • Country: Lebanon
  • Topics: Middle East,Society/Social Issues
  • Reuters ID: LVA003D85CMYV
  • Aspect Ratio: 16:9
  • Story Text: The removal of subsidies in Lebanon without guarantees to protect the vulnerable would amount to a social catastrophe, two U.N. agencies said in an op-ed, warning there is no parachute to soften the blow.
    With Lebanon deep in financial crisis, the central bank has been subsidising basic goods by providing hard currency to importers at the old exchange rate of 1,500 Lebanese pounds to the dollar even as the currency fell by 80% from the peg.
    Central bank governor Riad Salameh said last week the subsidies could be kept for only two more months, urging the state should come up with a plan.
    "It is critical to realise that for Lebanon to fly off another cliff now, without first putting in place an inclusive system of social guarantees, would be to inflict a social catastrophe on the country's most vulnerable people, sacrificing their wellbeing, and that of the country as a whole, for many years to come," the UNICEF'S Lebanon country representative and the ILO's regional director wrote in their op-ed.
    "Prices will hike and then people who are suffering from their economic life may not even be able to afford more of tomorrow's bread for instance," UNICEF's Yukie Mokuo told Reuters TV.
    Though Lebanon faces the gravest crisis since the 1975-90 civil war, policymaking has been crippled by old rivalries between fractious politicians. Saad al-Hariri was nominated to form a new government in October but one has yet to be agreed.
    The universal way in which Lebanon has been subsidising basic goods including fuel, wheat and medicine has been widely criticised, including by senior politicians from ruling parties, because it does not target those most in need.
    A rough analysis shows up to 80% of the subsidies may actually be benefiting the wealthiest 50% with only 20% going to the poorer half, Mokuo and ILO Regional Director Ruba Jaradat wrote in their op-ed.
    "People are poorer already even before they lift the subsidies. If they remove the subsidies, people will get even poorer," 49-year-old Lebanese writer Marwan Naaman said, fearing another "famine" crisis in the country.
    The caretaker government met with Salameh on Monday (December 7) and are holding more meetings this week to discuss the subsidies.
    The World Bank has said poverty is likely to continue to worsen and engulf more than half the population by 2021.
    "People will definitely go on the streets, it is impossible for people to stay home and accept the humiliation they are subject to," said Ghanem Zebian, 55.
    Demonstrators were held on Monday night on one main bridge in Beirut and under caretaker economy minister Raoul Nehme's house to protest against any removal of subsidies.
    (Production: Alaa Kanaan, Issam Abdallah, Ahmad al-Kerdi, Imad Creidi, Yara Abi Nader)
  • Copyright Holder: REUTERS
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