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The World Bank warned on Tuesday of an unprecedented economic collapse in Lebanon, warning of a “premeditated recession” in the absence of rapid comprehensive reform. The World Bank called on authorities to “take effective policy measures” at a time when the country is experiencing a deterioration in the value of the local currency, declining foreign exchange reserves at the central bank and high rates of poverty and unemployment.
The World Bank called Tuesday Lebanon To the formation of a government to urgently implement a comprehensive reform program, highlighting that the severe economic crisis in the country has made the economy vulnerable to an “exhausting recession”, which he described as “deliberate” with the failure of the authorities to contain the collapse.
As a reminder, Lebanon has witnessed an unprecedented economic collapse since last year, which coincided with the deterioration in the value of the local currency, the decline in foreign currency reserves at the Central Bank, and the rise in rates of poverty to more than half of the population and unemployment. The Covid-19 outbreak continued Horrible explosion in the port On August 4 to aggravate the situation.
The World Bank considered, according to the Arabic text of a report it published entitled “Deliberate Depression”, “the willful failure to Effective political action On the part of the authorities, it has exposed the economy to a difficult and prolonged recession. “
He warned that Lebanon “suffers a dangerous loss of resources, including human capital, as the brain drain is an increasingly desperate choice.” He considered that “the weight of the current adjustment in the financial sector focuses in particular on small depositors”, in addition to the local workforce and small companies.
Since last fall, banks have placed strict restrictions on dollar withdrawals, making it impossible for depositors to get their money and savings. A black market emerged, in which the exchange rate of the pound registered record rates against the dollar, while the official rate was still set at 1507 pounds. This year, Lebanon defaulted on its foreign debt for the first time.
The World Bank suggested that the real GDP growth rate fell sharply to -19.2 percent in 2020, after contracting by -6.7 percent in 2019. It said the collapse of the currency led to “rates of inflation. that exceeded the 100 percent limit. “
For his part, the World Bank’s regional director for the Levant, Saruj Kumar Jah, said: “The lack of political consensus around national priorities seriously hampers Lebanon’s ability to implement long-term insightful development policies.”
He stressed that “the new government must urgently implement a credible strategy to achieve macroeconomic stability, while taking short-term measures to contain the crisis, as well as medium to long-term measures to face structural challenges.”
Despite international pressure led by France, the political forces are still unable, due to divisions and disagreements over quotas, to form a government to implement the reforms required by the international community to help Lebanon.
The last government resigned on August 10 due to pressure from the street and due to its inability to make concrete decisions as a result of the control of the political forces over it. The resignation came after the explosion in the port, which killed more than two hundred people and the destruction of the vital facility and much of the capital. It is likely the result of neglect, corruption, and storage of a large quantity of ammonium nitrate in one of your warehouses without any protective measures.
The World Bank suggested that the economic crisis would be “deeper and longer than most economic crises,” and explained that “international aid and private investment are necessary for comprehensive recovery and reconstruction.”
French President Emmanuel Macron is expected to host a new videoconference with the United Nations on Wednesday to help Lebanon financially, with the participation of some 30 personalities, including heads of state and government, ministers, international institutions and non-governmental organizations. .
France 24 / AFP
