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Beirut – Reuters: Acting Prime Minister Hassan Diab said Lebanon could use $ 2 billion of the remaining reserves for support for another six months, while a financial collapse in the country increases fears of rising hunger.
Lebanon’s worst crisis since the 1975-1990 civil war led to a collapse of the currency and a sharp rise in inflation. Signs of end of support prompted warnings from the United Nations of a “social catastrophe.”
Diab also said that Western officials told him there was an “international decision” not to help Lebanon due to the Iranian-backed Hezbollah role in the country.
Diab said in an interview that he only learned of the $ 2 billion in foreign reserves remaining to support comments made by Central Bank Governor Riad Salameh last week and broadcast on television. “I have asked him many times,” he added. I did not receive anything officially. He went on to say that the amount is higher than expected and will continue “for six months if we apply the card system.”
He said he hoped to reach an agreement in February on a plan to cut support costs and provide assistance to the poor at the same time.
A BDL spokesperson did not immediately respond to a request for comment.
As dollar flows to Lebanon decline, the central bank is withdrawing foreign reserves to support three main commodities: wheat, fuel, medicines, and some basic goods. Diab said the cabinet sent a report to Parliament a week ago outlining four scenarios to replace the subsidy with food cards for 600,000 families, or more than 2.5 million people.
The import-dependent country has a population of nearly six million, including at least one million Syrian refugees.
One of the options presented in the report is to cancel subsidies for fuel and wheat, excluding flour (flour), and give families $ 165 a month. The report also indicated “the need to seek help from donor countries … because 2021 will be difficult.”
The central bank and the government traded blame for the economic collapse. In response to criticism that nearly a year has passed without a plan, Diab said his government has faced multiple crises.
Diab took over as prime minister a year ago with the support of Hezbollah and resigned in August due to public anger over the Beirut port bombing that killed 200 people that month. His cabinet functions as an interim government.
Along with three former ministers, Diab was charged with negligence in connection with the August bombing, but has since refrained from appearing for questioning, accusing the investigating judge of exceeding his powers.
Foreign donors have made it clear that they will not bail out the government unless it initiates reforms to end decades of corruption, one of the root causes of the crisis. The wealthy Gulf states that have previously supported the Lebanese bailout are concerned about Hezbollah’s growing influence.
“They, the Americans and the Europeans, told me: this is not about you … but there is an international decision to stop helping Lebanon … because they have a problem with Hezbollah,” Diab said.
