Creating new perspectives since 2009

World Bank, EU, UN say agreement to give Lebanon aid in US dollars

March 18, 2021 at 3:35 am

Protestors blocked roads during ongoing demonstrations against the current economic crisis, in Beirut, Lebanon on March 17, 2021 [Mahmut Geldi / Anadolu Agency]

Impoverished groups in Lebanon could soon receive more aid after a letter from international donors said on Wednesday there had been an agreement to hand out assistance in hard currency as the Lebanese pound crashed to a new low.

Aid to the country in the midst of a financial meltdown exacerbated by the COVID-19 pandemic is currently handed out in Lebanese pounds at rates set by the Central Bank.

But in a letter to the country’s finance ministry seen by the Thomson Reuters Foundation, representatives of the European Union, United Nations and World Bank said they “take note of the verbal agreement” on February 22 by the Central Bank chief and deputy prime minister for aid to be disbursed in US dollars.

“We are confident you share the urgency of rolling out the agreed-upon disbursement mechanisms at the earliest, in order to ensure the consistency and continuity of aid amidst increasingly challenging socio-economic conditions,” the letter said.

Lebanon has one of the most unequal wealth distributions in the world and poverty has soared since an economic crisis erupted in 2019, worsened by an explosion in August that left Beirut’s port and downtown business area in ruins.

Read: Palestine refugees in Lebanon protest unaffordability of bread

Protesters burned tyres and blocked roads in Beirut on Tuesday, raising fears of wider unrest in a country reeling from soaring unemployment and inflation, the COVID-19 pandemic and a financial crisis rooted in decades of state waste and graft.

Roughly half of the workforce relies on daily wages mostly paid in local currency, and a recent study by aid organisation CARE found that 94% of Lebanon’s population are earning less than the minimum wage.

Human rights groups have urged donors to give aid directly to people struggling to afford basics like food, housing and health care, pointing to the government’s squandering and mismanagement of aid given after the end of Lebanon’s civil war in 1990.

Report by Thomson Reuters Foundation.