Lebanon government says it can only afford six-months subsidies

Lebanon premier says cash-strapped government can only afford six-months subsidies, blaming Hezbollah
2 min read
30 December, 2020
Many Lebanese rely on government subsidies to afford basic goods.
Diab has said Hezbollah remain a stumbling block to international aid [Getty]

 

Lebanon's premier has said his government can only afford six months of subsidies for basic goods, such as wheat and fuel, blaming Islamist movement Hezbollah for the impasse.

Caretaker Prime Minister Hassan Diab told Reuters that he was only made aware of Lebanon's inability to continue subsidies into the long-term after Central Bank Governor Salameh's revealed last week that the country had just $2 billion in reserves.

Diab said this means that even with rationing, Lebanon can only afford six more months of subsidies.

"I had asked him [Salameh] several times. Nothing official was received," he told the agency.

Lebanon is suffering one of its worst financial slumps in decades, leading to huge suffering for Lebanese and refugees.

A massive explosion at the Port of Beirut - which killed more than 200 people and damaged thousands of homes - further compounding the dire economic situation.

The UN has said that ending subsidies will lead to "social catastrophe" in Lebanon and there have been warnings from NGOs that it could plunge the country into starvation.

Diab said he is faced with an "international decision" not to support Beirut due to the powerful role of Hezbollah in Lebanese politics.

"They said it to me, the Americans and the Europeans: 'it's not you'... but there's an international decision to stop helping Lebanon. Because they have a problem with Hezbollah," he said.

Foreign governments, such as France, have demanded Lebanon fix its corruption problem and rein in Hezbollah, which is a kingmaker in Lebanese politics with its own independent financial empire.

Diab added that his government has drawn up four different scenarios to deal with the dire economic situation, but these plans rely on foreign aid.

There is "a need to ask for aid from donor states... because 2021 will be a tough year", Diab added.

One idea is to scrap subsidies for wheat and fuel, but not flour, and channel the funds into $165 a month payment to families.

Regarding a CIA report into the Port of Beirut blast, which found that only 500 of the 2,750 tonnes of ammonium nitrate stored in the port had detonated, Diab had only response to the findings.

"Where did the (rest) go?"

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