- Title: LEBANON: Rising prices frustrate Lebanese consumers
- Date: 28th January 2008
- Summary: (MER1) BEIRUT, LEBANON (JANUARY 24, 2008) (REUTERS) BEIRUT STREET SCENE/ WOMAN BEGGAR ON PAVEMENT
- Embargoed: 12th February 2008 12:00
- Keywords:
- Location: Lebanon
- Country: Lebanon
- Topics: Economic News
- Reuters ID: LVAAMIWS5S7EM9DDRKIEXZXF24R0
- Story Text: With price inflation rising by about 5 percent in 2007 and the same increase expected this year, Lebanese say they are fed up with the lack of government action to curb economic hardships.
As Lebanon grapples with its worst political crisis in decades, economic woes are a close second on its citizens' long list of worries. Living with the constant concern over security, Lebanese are also having to deal with a rise in the prices of fuel, commodities, food and more. And many are getting frustrated with the whole situation.
The government says inflation rates rose by at least 5 per cent in 2007, mainly due to the global market changes which drove the U.S. dollar lower against the Euro, hence raising the cost of imports. The largest share of Lebanon's imports comes from the Eurzone.
The country has also been without a president at its helm since November due to bitter political rivalry between two main camps: the opposition and the government. A string of bombings, assassinations and assassination attempts over the past three years have not helped ease the concern over the country's future. Thousands of young educated Lebanese have left in search of a better life abroad and millions of dollars worth of foreign investments have been driven away.
''Living standards are very bad, prices are high and our salaries are limited, and there is a lot of unemployment, no one is working,'' said citizen Fawzi Ayyash, as he shopped at a busy Beirut market.
Food prices have risen by around 8 per cent since 2006 and many blame the government for lack of supervision over consumer prices.
''People are ripping us off and there are no laws to stop them. No one is having mercy on us. There is no monitoring of prices, each place charges a different price, everyone is selling at whatever price they want and the government is not holding them accountable,'' complained another resident of the Lebanese capital Mohammed Khalil.
The economy is also heaving under a huge public debt of $41 billion, which is equal to 180% of GDP, the highest debt to growth ratio in the world.
Lebanon received some $7.6 billion in pledges of economic aid in a 2006 conference, but the political crisis has choked up the flow of money and stalled much-needed reforms.
In a Beirut supermarket, one shopper said it was even becoming too expensive to prepare a decent home-cooked meal.
''Today, the price of a kilogramme of courgettes is 5000 pounds (3.3 US dollars), to cook it, you need one kilo of meat. So to cook for one or two people, the cost of the meal is about 15,000 to 20,000 pounds. What are we going to do? We have to get by, we only hope that things don't stay this way for long. That's all we want," said shopper in Beirut who declined to give his name.
In a sign of rising anti-government sentiment, several strikes have been held across the country over the past months to protest against everything from power rationing to the price of bread.
Last week, large parts of the transport system were paralysed by a strike by the general transport unions, which are discontent at the rising cost of fuel and the low minimum wage.
Beirut resident Wissam Matta said the political crisis was distracting the government from tackling the problems facing the Lebanese economy.
''There are things that are replacing our priorities which should be the economic concern. I don't know how this country is working, or how the people are working. Lebanese people have forgotten themselves and are preoccupied with the constitutional vacuum. What's the difference if there is a president or not?'' he questioned.
The government has said that economic growth for 2007 should have been 7 or 8 percent if it were not for the instability but nevertheless it still managed to grow between 2.5 and 3 percent despite the troubles.
Economy Minister Sami Haddad said that inflation, although not homegrown, was one of the main elements of the crisis.
"There is no doubt that there is has been a rise in inflation, and this inflation was about 5 per cent during 2007. But this inflation is imported and it is affecting Lebanon and the other countries in the region.
This inflation is not the making of the Lebanese government," said Haddad.
But the government's ability to control inflation will depend in part on whether it can pass new legislation, he said. Many aspects of policy-making in Lebanon have been paralysed for more than a year by a deep political crisis.
Haddad said the answer to Lebanon's economic problems rests mainly with resolving the political crisis. Without that, there is only so much the government can do.
''The government has taken several measures against inflation such as maintaining the prices of bread, which led to subsidising wheat and flour prices and subsidising diesel and maintaining the prices of electricity. I understand the feelings of the protesters, but I say that the protests will not solve the problem. The problem lies in solving the political crisis to set off growth in the economy which would lead to prosperity and more jobs being created,'' said Haddad.
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