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Lebanon: Protestors back on the streets as politicians argue over economic rescue plan

April 21, 2020 at 12:51 pm

Lebanese protesters rally over the worsening economic crisis in Beirut, Lebanon on 21 April 2020 [nicfrakesjourno/Twiter]

Lebanese protestors are back on the streets today calling for a week of mass rallies over the worsening economic crisis. A statement from a group of self-declared “rebels” called for convoys of cars to descend on Beirut’s Martyr’s Square and other “arenas of the 17th October uprising”. They added that protestors should adhere to the Interior Ministry’s coronavirus curfew orders to prevent security forces from using it “as an excuse to supress the demonstrators”.

The popular demand is for the government to step in to resolve the economic crisis. According to the group’s statement, it is about “the poverty, the hunger and the government’s inaction to alleviate the suffering of citizens.”

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A cash assistance programme announced by the government was postponed indefinitely last week after officials found “politically motivated” names on recipient lists. Meanwhile, Human Rights Watch has warned that hundreds of thousands of Lebanese could go hungry if the government does not provide a robust aid programme to alleviate suffering. Government officials, however, still face difficulties in trying to agree on a financial rescue plan which could see aid programmes carried out.

The Chairman of the Association of Banks in Lebanon, Salim Sfeir, has expressed his staunch opposition to the plan in today’s edition of local English language newspaper The Daily Star. Sfeir called the conclusions of the government’s financial consultant, Lazar Asset Management, “erroneous”, and termed the plan “nothing short of an obituary for our free market economy.”

The plan calls for an immediate restructuring of the banking sector, which has become vastly oversized in recent years. A restructuring would include a bail-in of existing shareholders amounting to $20.8 billion in capital write-offs and require a further contribution of $62.4 billion from top depositors.

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According to Sfeir, the fact that the plan places much of the burden on the banking sector “raises questions about the government’s commitment to long-awaited public-sector reforms, especially when it’s no secret that the root of all problems is corruption and bad governance.”

Anti-government protests have taken place in Lebanon since 17th October and initially called for freedom, secularism and unity. Renewed protests, however, have become more immediate, and demand that the government should provide immediate compensation and aid to residents facing hunger and poverty due to the pandemic lockdown.

Prior to the lockdown measures being imposed, the World Bank estimated that 40 per cent of Lebanon’s residents live in poverty. It forecast that this figure would rise due to the country’s economic crisis. A return to streets by protesters, in defiance of measures to prevent the spread of coronavirus, suggests that many more people than has been estimated are struggling.

In recent months, Lebanon’s currency has lost 50 per cent of its value, and the country failed to repay a $1.2 billion Eurobond, due on 9th March. That was the first sovereign default in Lebanon’s history.