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."



Italy Plans to Return Ambassador to Syria to Reflect New Diplomatic Developments, Minister Says

Italy's Foreign Minister Antonio Tajani speaks while meeting with members of the G7, on July 11, 2024, during the NATO summit in Washington. (AP)
Italy's Foreign Minister Antonio Tajani speaks while meeting with members of the G7, on July 11, 2024, during the NATO summit in Washington. (AP)
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Italy Plans to Return Ambassador to Syria to Reflect New Diplomatic Developments, Minister Says

Italy's Foreign Minister Antonio Tajani speaks while meeting with members of the G7, on July 11, 2024, during the NATO summit in Washington. (AP)
Italy's Foreign Minister Antonio Tajani speaks while meeting with members of the G7, on July 11, 2024, during the NATO summit in Washington. (AP)

Italy plans to send an ambassador back to Syria after a decade-long absence, the country’s foreign minister said, in a diplomatic move that could spark divisions among European Union allies.

Foreign Minister Antonio Tajani, speaking in front of relevant parliamentary committees Thursday, announced Rome’s intention to re-establish diplomatic ties with Syria to prevent Russia from monopolizing diplomatic efforts in the Middle Eastern country.

Moscow is considered a key supporter of Syrian President Bashar Assad, who has remained in power despite widespread Western isolation and civilian casualties since the start of Syria’s civil war in March 2011.

Peaceful protests against the Assad government — part of the so-called “Arab Spring” popular uprisings that spread across some of the Middle East — were met by a brutal crackdown, and the uprising quickly spiraled into a full-blown civil war.

The conflict was further complicated by the intervention of foreign forces on all sides and a rising militancy, first by al-Qaida-linked groups and then the ISIS group until its defeat on the battlefield in 2019.

The war, which has killed nearly half a million people and displaced half the country’s pre-war population of 23 million, is now largely frozen, despite ongoing low-level fighting.

The country is effectively carved up into areas controlled by the Damascus-based government of Assad, various opposition groups and Syrian Kurdish forces.

In the early days of the conflict, many Western and Arab countries cut off relations with Syria, including Italy, which has since managed Syria-related diplomacy through its embassy in Beirut.

However, since Assad has regained control over most of the territory, neighboring Arab countries have gradually restored relations, with the most symbolically significant move coming last year when Syria was re-admitted to the Arab League.

Tajani said Thursday the EU’s policy in Syria should be adapted to the “development of the situation,” adding that Italy has received support from Austria, Croatia, Greece, the Czech Republic, Slovenia, Cyprus and Slovakia.

However, the US and allied countries in Europe have largely continued to hold firm in their stance against Assad’s government, due to concerns over human rights violations.