Lebanese Dread End to Subsidies

Maya Ibrahimshah, the founder of Lebanese NGO Beit al-Braka (house of blessings) organizes food to be distributed to the needy. AFP
Maya Ibrahimshah, the founder of Lebanese NGO Beit al-Braka (house of blessings) organizes food to be distributed to the needy. AFP
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Lebanese Dread End to Subsidies

Maya Ibrahimshah, the founder of Lebanese NGO Beit al-Braka (house of blessings) organizes food to be distributed to the needy. AFP
Maya Ibrahimshah, the founder of Lebanese NGO Beit al-Braka (house of blessings) organizes food to be distributed to the needy. AFP

To feed her family, Lebanese mother Sandra al-Tawil sold her fridge and washing machine. Now she fears the cash-strapped state will scrap food subsidies, plunging them deeper into poverty.

Lebanon is locked in its worst economic crisis since the 1975-1990 civil war, with no end in sight.

The value of the Lebanese pound has plunged, driving up the price of crucial imports like food and fuel and triggering small but angry protests.

More than half of Lebanon's population is poverty stricken and relies on subsidies, but a central bank demand for "an immediate plan to ration subsidies" is looming.

"We're already tightening our belts. What will we eat if we can no longer buy rice or lentils?" 40-year-old Tawil said.

Tawil and her husband lived a comfortable life in Dubai before returning to their homeland to open a high-end hair salon in 2019.

But that dream turned to nightmare after the financial crisis and the Covid-19 pandemic hit.

"I had to sell my washing machine and fridge... just to get the minimum of daily bread and pay rent," said the mother of two young children.

Her husband found a job at the start of the year, and the Beit El Baraka charity is helping them out with food and school fees.

But Tawil is still worried, and furious with the political class she blames for the malaise.

"If I see people heading out to protest, I'll be the first to join them," AFP quoted her as saying.

In a country that imports 80 percent of its food, much of the six million population depends on subsidies to get by.

Even without them being lifted, many are already struggling, said Beit El Baraka founder Maya Ibrahimchah.

"There have been many more demands for help over the past four months," she said.

"Those we are helping today are all from the middle class."

The state has poured up to $437 million into subsidies a month, the World Bank estimates, to keep prices in check for bread, medicine, fuel and electricity, as well as around 300 other items since mid-2020.

To counter the pound's drastic devaluation, importers get access to dollars at a preferential rate to ensure they can afford to continue bringing in supplies.

For flour, fuel and medicine, for example, they offer dollars at the official exchange rate of 1,507 pounds to cover most of their cost.

But traders must resort to the black market to cover the difference, where Tuesday the rate hit a record low of 10,000 pounds to the dollar.

As a result, in less than a year the price of a large bag of subsidized bread has risen from 1,500 to 2,500 pounds.

Authorities have remained vague about how the subsidies will be reduced, though meetings are ongoing.

In early December, central bank governor Riad Salameh said it could only fund subsidies for another two months. Later that month, he said two billion dollars were available for them.

At the end of February, the central bank's website showed it had $17.9 billion in foreign currency reserves, yet $17.5 billion of that is the bank's required reserves.

The bank did not respond to AFP's repeated requests for comment.

The UN food agency has warned any subsidy reduction would have "major inflationary repercussions" and "put an unbearable strain on households".

The price of bread could increase by up to three times and fuel by 4.5 times, the World Food Program said, adding it was critical to immediately scale up assistance to the poorest.

Under the government's latest plan, subsidies could be gradually lifted, with financial aid to soften the blow over several years.

The state would first lift subsidies for bread, fuel and around 300 other items, under the plan seen by AFP, before later on reviewing spending in the electricity sector.

To compensate, up to 80 percent of the population would receive handouts -- 50 dollars a month for adults aged over 23 and half for anybody younger.

Those amounts, and the numbers of beneficiaries, would then progressively diminish.

Until then, the authorities have secured $246 million from the World Bank to help 786,000 Lebanese.

But Nasser Jomaa, 52, said he doubted the government would really provide any financial support.

"It's just empty words. We have zero faith in the state," said the driver, who lives with his unemployed 25-year-old son.

As the Lebanese pound has plunged on the black market, he has seen his monthly income drop in value from $1,000 to just $160.

He added that any lifting of subsidies would be "catastrophic".

Already, he said, "we no longer eat meat."



Lebanon to Increase Army Personnel Ahead of Possible Deployment South of Litani

Prime Minister Najib Mikati chairing the cabinet meeting (Photo: The Prime Minister’s office)
Prime Minister Najib Mikati chairing the cabinet meeting (Photo: The Prime Minister’s office)
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Lebanon to Increase Army Personnel Ahead of Possible Deployment South of Litani

Prime Minister Najib Mikati chairing the cabinet meeting (Photo: The Prime Minister’s office)
Prime Minister Najib Mikati chairing the cabinet meeting (Photo: The Prime Minister’s office)

The Lebanese government has approved funding to recruit 1,500 new military personnel in the Lebanese Army as part of an initiative to increase military presence along the southern border, amid Israel’s ongoing hostilities.
The funds will be provided to the Ministry of Defense as an advance, a decision highlighted by the Minister of Information for its political and international significance, particularly in relation to implementing United Nations Security Council Resolution 1701.
Prime Minister Najib Mikati in the caretaker government emphasized that continued and escalating Israeli attacks on Lebanon amount to crimes against humanity. He stated that a primary pathway to a resolution involves halting hostilities against the country, fully implementing Resolution 1701, and electing a new president to restore institutional order, stability, and initiate reconstruction.

Mikati condemned what he described as an international failure to stop Israel’s actions against Lebanon, which include attacks on towns and villages, civilian deaths, and strikes against medical and relief personnel.
“We condemn and hold the international community responsible for the continuation of Israel’s genocidal war on Lebanon, its destruction of towns and villages, killing of civilians, assassination of army personnel, and targeting of medical teams, civil defense, relief teams, and journalists.
“Additionally, the attacks on UNIFIL, which represents international legitimacy, make targeting UNIFIL an assault on the international community and the Security Council. This destruction continues to affect hospitals, schools, and educational centers,” stated Mikati.
On the international front, Mikati highlighted the solidarity shown by world figures, referring to his discussions with leaders like Jordan’s King Abdullah, France’s President Emmanuel Macron, and Britain’s Prime Minister. This was further demonstrated during the Paris Conference in Support of Lebanon -late on October- he underlined, specifically thanking France for its humanitarian efforts and military support.
But he added: “But unfortunately, Israel is blatantly disregarding all international efforts to achieve a ceasefire.”
The prime minister reiterated Lebanon’s stance on safeguarding its dignity and sovereignty across air, sea, and land, pledging to confront any Israeli violations.
Following the cabinet meeting, Minister of Information Ziad Makari assured that funds to recruit 1,500 additional soldiers are available and that the government encountered no issues regarding this allocation.
Nasser Yassin, the government’s Emergency Committee coordinator, announced that the cabinet approved fuel allocations for 541 shelters in mountainous regions over 300 meters in altitude to ensure winter heating. Yassin also detailed efforts concerning the people displaced as the result of the Israeli hostilities in Lebanon.
He highlighted that there are 44,000 families in 1,138 shelters and an additional 147,000 families housed within communities.