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."



Israel Pounds Southern Lebanon and Beirut Outskirts, Killing Five Medics

Fire and smoke erupt from a building just after an Israeli airstrike in Beirut's southern Chiyah neighborhood on November 22, 2024, amid the ongoing war between Israel and Hezbollah. (AFP)
Fire and smoke erupt from a building just after an Israeli airstrike in Beirut's southern Chiyah neighborhood on November 22, 2024, amid the ongoing war between Israel and Hezbollah. (AFP)
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Israel Pounds Southern Lebanon and Beirut Outskirts, Killing Five Medics

Fire and smoke erupt from a building just after an Israeli airstrike in Beirut's southern Chiyah neighborhood on November 22, 2024, amid the ongoing war between Israel and Hezbollah. (AFP)
Fire and smoke erupt from a building just after an Israeli airstrike in Beirut's southern Chiyah neighborhood on November 22, 2024, amid the ongoing war between Israel and Hezbollah. (AFP)

Israeli forces pounded southern Lebanon and the outskirts of the capital Beirut on Friday, killing at least five medics, and ground troops clashed with Hezbollah fighters in the south.

Israel has pushed on with its intense military campaign against the Iran-backed armed group Hezbollah, tempering hopes that efforts by a US envoy will lead to an imminent ceasefire.

US mediator Amos Hochstein said this week in Beirut that a truce was "within our grasp". He travelled on to meet Israeli Prime Minister Benjamin Netanyahu and Defense Minister Israel Katz before returning to Washington, the news outlet Axios said.

His trip was aimed at ending more than a year of hostilities between Israel and Hezbollah along Lebanon's southern border, which escalated when Israel ramped up its strikes in late September and sent ground troops into Lebanon on Oct. 1.

Israeli troops have fought Hezbollah in a strip of towns along the border and this week pushed deeper to the edges of Khiyam, a town some six km (four miles) from the border.

Hezbollah said it had fired rockets at Israeli troops east of Khiyam at least four times on Friday. Lebanese security sources told Reuters Israeli troops had also advanced in a string of villages to the west. They said Israel was most likely trying to isolate Khiyam before attacking the town.

Four Italian soldiers were lightly injured after two rockets exploded at a UNIFIL peacekeeping force base in southern Lebanon, a spokesperson for UNIFIL said on Friday.

Italian sources said an investigation was under way. Foreign Minister Antonio Tajani told Italian media that Hezbollah might be responsible for the attack.

Israeli strikes on two other villages in southern Lebanon killed five medics from a rescue force affiliated with Hezbollah, the Lebanese health ministry said.

The more than 3,500 people killed by Israeli strikes over the last year include more than 200 medics, the health ministry said.

EVACUATION WARNINGS AND STRIKES

Israel says its aim is to secure the return home of tens of thousands of people evacuated from Israel's north because of rocket attacks by Hezbollah, which began firing across the border in support of Hamas at the start of the war in Gaza in October 2023.

Israel also mounted more strikes on Beirut's southern suburbs, a once densely populated stronghold of Hezbollah.

Abeer Darwich, a resident of a building that was hit in Beirut southern suburbs on Friday, had to leave her apartment immediately after an evacuation warning from Israel's military.

She stood watching while an Israeli strike pounded the high rise building into dust.

"Do you know that most of the apartments' owners took credit to buy those houses? Life savings are gone, memories and safety ... which Israel decided to steal from us," Darwich said .

Evacuation orders were issued on X for several buildings in the area on Friday. Reuters footage showed one of the strikes appearing to pierce the center of a multi-storey building, which toppled in a cloud of smoke.