World Bank approves cash aid for crisis-ridden Lebanon
World Bank approved $ 246 million loan to Lebanon to provide emergency financial assistance to nearly 800,000 Lebanese amid worsening economic and health crises in the country
The economic crisis has resulted in an expected 19.2% drop in gross domestic product, triple-digit inflation and pushes 1.7 million people below the poverty line. 22% of the population is expected to fall into extreme poverty.
International donors have provided direct humanitarian aid to Lebanon. But in the absence of major structural reforms, talks with the International Monetary Fund that began last summer have failed to produce a bailout for the cash-strapped government.
The worsening crisis has depleted foreign exchange reserves in the import-dependent country and caused the local currency to fall, losing nearly 80% of its value against the dollar. The government is discussing ways to remove subsidies on some basic commodities and has already raised the price of flour and bread.
Meanwhile, a surge in coronavirus infections – rates have hovered around 4,000 new cases per day in recent days – and a strained health care system have added to concerns. A massive explosion last summer at the Port of Beirut devastated the city, killing more than 200 people and injuring thousands.
“The consequences of these repeated shocks on the economic well-being of households are considerable and potentially disastrous,” said Saroj Kumar Jha, regional director of the World Bank.
The large portion of the loan – nearly $ 200 million – will be used to provide cash assistance to approximately 786,000 people through a prepaid electronic card. With a turbulent exchange rate and a flourishing black market, the World Bank said it would distribute aid in local currency, using a loan fund conversion rate calculated at 1.6 times that set by the Central Bank. for the US dollar.
The conversion rate would be subject to change if there were major fluctuations in the value of the currency, the World Bank said. But the rate raised questions among activists who said converting the loan to 6,240 Lebanese pounds into dollars – about 40% less than the black market rate – would benefit banks, which are strapped for foreign currency.
The loan also includes school fees for some 87,000 children between the ages of 13 and 18. It will also help Lebanon set up a social registry to determine who will need help in the future.
Lebanon has not taken a census since 1932, when Christians were in the majority. The country has a delicate sectarian balance and it is believed that the nation of 5 million people is now equally divided between Christians, Sunnis and Shiites.
On Wednesday, the parliamentary health committee prepared a bill to allow the import of coronavirus vaccines from Pfizer and BioNTech. The law, which is expected to be passed by parliament on Friday, aims to reassure international companies that they will not be responsible for side effects from vaccines.
The Lebanese Minister of Health had said that the first batch of vaccines was due in February.