Lebanon’s problems are expected to worsen as the country’s Central Bank unilaterally decides to end fuel subsidies in a bid to protect the country’s foreign exchange reserves, but this move will certainly add an additional financial burden to the Lebanese people. , half of whom are already living. under the poverty line.
The Lebanese government on Thursday rejected the central bank’s decision, insisting that current subsidized prices “must not change and subsidies must continue until measures are put in place to help the poor.”
Fuel subsidies cost the country at least $ 3 billion last year, according to powerful Central Bank governor Riad Salameh. However, the loss of fuel subsidies would usher in a new phase in Lebanon’s financial crisis in which the national currency, the lira, has already lost 90 percent of its value.
Inflation and unemployment rates have skyrocketed, essential foodstuffs and medicines have all but disappeared while severe shortages of fuel and electricity have resulted in sporadic protests.
The latest crisis comes as Lebanon continues to lack a functioning government as Prime Minister-designate Najib Mikati has yet to form a government. He was chosen to head a new cabinet following the withdrawal of former Prime Minister Saad Al Hariri to form a government after a year of futile deliberations and negotiations with President Michel Aoun and the main political parties over their shares of ministerial portfolios .
An interim government led by Hassan Diab, who resigned in August 2020, days after the catastrophic explosion in the port of Beirut, showed no interest in taking a serious initiative to alleviate the economic crisis, recently described by the Bank. world as one of the three worst economic crises in the past 150 years!
Diab called Salameh’s decision to end fuel subsidies “unacceptable” but offered no alternative, while the central bank chief said his decision was the last resort to protect foreign currency reserves. foreigners from Lebanon which have increasingly declined over the past two years due to subsidies. politics and the lingering economic crisis due to the political deadlock and the impact of the coronavirus, which affected Lebanon’s main source of income, travel and tourism.
In reality, the subsidy crisis reflects the deeper economic, political and social situation in the country that was once described as the Switzerland of the Middle East.
Lebanon’s fundamental problem is the inability of its political class to rise above its selfish political and financial interests (coupled of course by widespread corruption and tribal and sectarian loyalties) to offer a viable remedy to a system. failing.
Lebanon’s priority today must be the immediate formation of a government that should initiate a national dialogue to repair the system, ending corruption, enforcing the rule of law and accountability, and replacing the sectarian system. current power-sharing system that promotes competence and national loyalty.