Lebanon: Importers of Basic Commodities Warn Against Ending Subsidies

People shop at a supermarket in Beirut, Lebanon August 28, 2017. REUTERS/ Mohamed Azakir
People shop at a supermarket in Beirut, Lebanon August 28, 2017. REUTERS/ Mohamed Azakir
TT
20

Lebanon: Importers of Basic Commodities Warn Against Ending Subsidies

People shop at a supermarket in Beirut, Lebanon August 28, 2017. REUTERS/ Mohamed Azakir
People shop at a supermarket in Beirut, Lebanon August 28, 2017. REUTERS/ Mohamed Azakir

Since the beginning of 2020, the Lebanese have been suffering from a continuous and sharp rise in commodity prices, mainly due to the devaluation of the local currency against the US dollar in the parallel market.

The Central Bank (BDL) has been subsidizing basic commodities, including wheat, medicine and fuel. However, reports have emerged over the BDL’s inability to continue to subsidize the basic commodities, which would put them at the mercy of the fluctuating exchange rate.

Lifting subsidies on medicine would be a “humanitarian catastrophe”, as described by the head of the Drug Importers Syndicate, Karim Gebara.

“Citizens pay 35 percent of the medicine bill and they can barely afford it; so what if the subsidy is lifted and the value of the bill is doubled?” he asked.

In remarks to Asharq Al-Awsat, Gebara said it was difficult to define the increase in prices.

“There will be no fixed price or threshold; the prices of medicine will be directly linked to the dollar exchange rate on the black market,” he noted.

If we consider that the exchange rate remains at its current value of LBP 7,500, then this means the price of any drug will be multiplied by five.

Gebara stressed that so far, the Syndicate has not been officially informed of BDL’s ending of subsidies, hoping that such a move, if taken, would not affect the medical sector.

The Syndicate of Gas Station Owners has not been officially informed either, but warned of a real crisis facing the sector and citizens if BDL goes ahead with such a plan.

The head of the syndicate, Sami Braks, stressed that lifting the subsidies would automatically mean an adjustment of fuel prices.

Economic Expert Elie Yashouei said that ending the subsidies has become inevitable, adding: “We will reach it sooner or later.”

“In light of the drastic decline in BDL’s foreign reserves … it no longer has enough funds to support basic commodities or even the 300 commodities in the approved food basket,” he said.

In the event that the prices of goods were determined by the current rate of the US dollar on the black market (USD1= LBP7,500), the price of a pack of bread will exceed LBP5,000, a kilo of chicken will be sold for LBP50,000, a kilo of meat for LBP80,000, and a box of Panadol medicine for LBP15,000.



UN Calls for 'Immediate Deescalation' in Libyan Capital

Man waving the Libyan flag - File Photo/AFP
Man waving the Libyan flag - File Photo/AFP
TT
20

UN Calls for 'Immediate Deescalation' in Libyan Capital

Man waving the Libyan flag - File Photo/AFP
Man waving the Libyan flag - File Photo/AFP

The UN mission in Libya called for "immediate deescalation", citing reports of armed forces being mobilized in the capital and its surroundings that have raised fears of renewed violence.

In mid-May, there were clashes in Tripoli between forces loyal to the government and powerful armed groups wanting to dismantle it.

In a statement published late on Wednesday on X, the UN Support Mission in Libya (UNSMIL) said there were "increased reports of continued military build-up in and around Tripoli", AFP reported.

It said it "strongly urges all parties to refrain from using force, particularly in densely populated areas, and to avoid any actions or political rhetoric that could trigger escalation or lead to renewed clashes".

It called for all parties to "engage in good faith" in deescalation and for the "swift implementation of security arrangements" set out during efforts to end the May violence.

Those clashes left six people dead, the United Nations said.

"Forces recently deployed in Tripoli must withdraw without delay," UNSMIL said.

Libya has been gripped by conflict since the 2011 overthrow and killing of longtime ruler Moamer Kadhafi in a NATO-backed uprising.

The country remains split between Prime Minister Abdelhamid Dbeibah's UN-recognized government based in Tripoli and a rival administration based in the east.

In a TV interview on Monday, Dbeibah called for armed groups to vacate the areas under their control.

Among the sites held by armed factions are the Mitiga airport in the east of the capital, which is controlled by the powerful Radaa Force.

"Dialogue -- not violence -- remains the only viable path toward achieving lasting peace, stability in Tripoli and across Libya", the UNSMIL statement said.