Lebanon on Edge as Time, Money Run Out

FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
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Lebanon on Edge as Time, Money Run Out

FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir
FILE PHOTO: A man counts Lebanese pounds at a currency exchange shop in Beirut, Lebanon October 1, 2020. REUTERS/Mohamed Azakir

Fouad Khamasi fills his taxi every day with about 40,000 Lebanese pounds' worth of fuel. It could cost at least four times that much if subsidies come to an end.

The Beirut cab driver, 53, can just about afford to buy fuel and feed his kids. He worries the price of subsidized foods and key imports - wheat, fuel, medicine - will skyrocket.

"These are the toughest days I've ever seen," Reuters quoted him as saying. "Some days, you stick your hand in your pocket and find nothing ... I leave the house and just pray. Whatever I make, it does nothing. It's a joke."

Time and money are running out for Lebanon.

Foreign reserves have dropped far below what the state already deemed "dangerous levels" when it defaulted on its huge debt in March, meaning it cannot afford to keep subsidies for long.

Leaders in power for decades have yet to enact a financial rescue plan, a year after huge protests against them swept the country, and they have failed to secure aid from foreign donors.

Talks with the International Monetary Fund (IMF) stalled earlier this year when Lebanese government officials, bankers and political parties could not agree over how big the losses were in the financial system and who should bear them.

After a massive explosion at Beirut's port in August that killed nearly 200 people and caused billions of dollars worth of damage, France stepped in.

But rival sectarian politicians could not get past the first hurdle on the French roadmap towards financial aid: naming a new cabinet quickly.

The currency, which has lost more than 80% of its value against the US dollar since last autumn, weakened after the French effort faltered.

Meanwhile, comments from officials indicating an end to some subsidies within months have triggered panic buying, raising the specter of food shortages and a more dramatic crash in the currency.

In the nation of some six million people, more than 55% of whom are below the poverty line, many are bracing for hunger and cold as winter looms.

"Everything that happened since last October could have been avoidable," Nasser Saidi, a former vice central bank governor, told Reuters.

He said targeted aid to the poorest Lebanese would be more effective than subsidies across the board, which had benefited smugglers taking goods into Syria.

"It's all kicking the can down the road. What should have been done is a full economic and financial plan," Saidi said.

Importers of key commodities said they had not been given a timeline to plan for how long subsidies could last.

Central Bank Governor Riad Salameh has said the bank could not finance trade indefinitely, although he gave no timeframe.

President Michel Aoun said recently of reserves: "The money will run out. What can we say?"

An official source close to the government told Reuters the money left for subsidies would last six more months by cutting support for some goods.

The state, which critics say is mired in corruption, and the paralyzed banking sector, its biggest creditor, have traded blame for the crisis.

Meanwhile, the wealth gap, already one of the region's largest, widens. In a country that relies heavily on imports and produces little, prices for many items including diapers have tripled.

In Beirut, men and women, some with young children, can often be seen digging for food in dumpsters near city intersections.

Two months after the port blast, Lebanese expect life to get even harder.

Many families now rely on charity. The meltdown could render people more dependent on political factions for aid and security, in a throwback to the militia days of the civil war.

Some analysts have warned that security forces, their wages fast losing value, would not be able to contain rising unrest. Hospitals fighting a surge in COVID-19 cases are overstretched. Fuel shortages have left city streets dark. Cars line up at petrol stations for rationed fuel.

"We're scared we won't be able to go on," said Siham Itani, a pharmacist who fears price hikes and being robbed. She said supplies of insulin and blood pressure medication had dwindled.

Another pharmacist said a masked man had held her up at gunpoint, asking for baby food.

Mostafa al-Mohalhal, who at 62 suffers from diabetes, stored four insulin vials in his fridge, but the daily power cuts spoiled them.

"If the price rises, how will I pay for them?" he said. "People will die in the streets."



COP29 - How Does $300 Billion Stack up?

A demonstrator sitting on the ground holds a poster during a climate protest in Lisbon, to coincide with the closing of the COP29 Climate Summit Saturday, Nov. 23, 2024. (AP)
A demonstrator sitting on the ground holds a poster during a climate protest in Lisbon, to coincide with the closing of the COP29 Climate Summit Saturday, Nov. 23, 2024. (AP)
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COP29 - How Does $300 Billion Stack up?

A demonstrator sitting on the ground holds a poster during a climate protest in Lisbon, to coincide with the closing of the COP29 Climate Summit Saturday, Nov. 23, 2024. (AP)
A demonstrator sitting on the ground holds a poster during a climate protest in Lisbon, to coincide with the closing of the COP29 Climate Summit Saturday, Nov. 23, 2024. (AP)

Countries agreed at the UN's COP29 climate conference to spend $300 billion on annual climate finance. Here are some ways of understanding what that sum is worth:

MILITARY MIGHT

In 2023, governments around the globe spent $6.7 billion a day on military expenditure, according to the Stockholm International Peace Research Institute.

That means the $300 billion annual climate finance target equates to 45 days of global military spending.

BURNING OIL

$300 billion is currently the price tag for all the crude oil used by the world in a little over 40 days, according to Reuters calculations based on global crude oil demand of approximately 100 million barrels/day and end-November Brent crude oil prices.

ELON MUSK

According to Forbes, Elon Musk's net worth stood at $321.7 billion in late November. The world's richest man and owner of social media platform X has co-founded more than half a dozen companies, including electric car maker Tesla and rocket producer SpaceX.

STORM DAMAGE

Hurricane Katrina, one of the most devastating and deadliest cyclones in US history, caused $200 billion in damage alone in 2005.

This year's climate-fueled Hurricane Helene could end up costing up to $250 billion in economic losses and damages in the US, according to estimates by AccuWeather. While preliminary estimates by Morningstar DBRS suggest Hurricane Milton, also supercharged by ocean heat, could cost both the insured and uninsured nearly $100 billion.

BEAUTY BUYS

The global luxury goods market is valued at 363 billion euros ($378 billion) in 2024, according to Bain & Company.

COPPER PLATED

The GDP of Chile - the world's largest copper producing country - stood at $335.5 billion in 2023, according to World Bank data.

GREECE'S BAIL OUT

Euro zone countries and the International Monetary Fund spent some 260 billion euros ($271 billion) between 2010 and 2018 on bailing out Greece - the biggest sovereign bailout in economic history.

BRITISH BONDS

Britain's new government needs to borrow more to fund budget plans. Gilt issuance is expected to rise to 296.9 billion pounds ($372.05 billion) for the current financial year.

TECH TALLY

A 10% share of tech giant Microsoft is worth just over $300 billion, according to LSEG data. Meanwhile the market cap for US oil major Chevron stood at $292 billion.

CRYPTO

The annual climate finance target amounts to 75% of the total value of the global market for crypto currency Ether, the world's second-largest cryptocurrency.

Alternatively, 3 million Bitcoin would cover the annual climate finance target as the world's largest cryptocurrency closes in on the $100,000 mark following a rally fueled by Donald Trump winning the Nov. 5 US presidential election.