Lebanon approves long-awaited economic rescue plan after weeks of unrest

The Lebanese government on Thursday approved a long overdue plan to save the economy from its worst crisis in decades after a new wave of angry street protests this week. National protests broke out in October accusing the class country’s politics of corruption and mismanagement.

The plan drawn up by the government of Lebanese Prime Minister Hassan Diab comes at a time when growing difficulties are fueling a new wave of murderous unrest.

Diab’s cabinet unanimously adopted the plan at a meeting at Baabda Palace, and it was set to detail the details in a televised address to the nation later today.

Announcing the plan on Thursday, Diab said his government would use it to request an International Monetary Fund (IMF) program to help the economy weather an acute crisis that could last up to five years.

“If we get (IMF support), and God willing, it will help us get through this difficult economic phase that could last three, four or five years,” said Diab.

The plan was finalized after several days of violent clashes between protesters and Lebanese security forces who saw dozens of angry youth vandalize local banks in the northern city of Tripoli and the southern port city of Sidon. The violence left one protester dead and several injured on both sides in some of the most serious anti-government riots sparked by the economic crisis amid weeks of coronavirus blockade.

Panic and anger seized the public as they watched the national currency – the Lebanese pound, which has been pegged to the dollar for nearly three decades – collapse, losing more than 60% of its value in recent weeks. Public debt has soared as the economy has contracted and currency inflows have dried up in the already heavily indebted country that depends on imports for most of its staples.

The tiny Mediterranean country of around five million people is one of the most indebted in the world, with national debt representing almost 170% of GDP. Nationwide protests erupted in October against the country’s political class due to widespread corruption and mismanagement of resources.

International donors have long called on Lebanon to introduce major economic changes and anti-corruption measures to unlock $ 11 billion in pledges made in 2018. But the country’s economic crisis has worsened and the government has run out of money. Money announced in March that it was defaulting on its sovereign debt for the first time.

Lebanese politicians have traded the blame on who is responsible for the crisis, the worst since the end of the Lebanese civil war in 1990.

Lebanon’s economic situation “catastrophic” as third night of unrest breaks out

Lockdown Worsens Economic Problems

A lockdown to fight the coronavirus pandemic has added to the economic woes that beset the country, which include soaring inflation, a liquidity crunch and a currency in free fall.

Protesters in northern Lebanon attacked banks and clashed with the security forces for three consecutive nights, reviving a protest movement launched in October against a political class that activists deem incompetent and corrupt.

The government has unanimously approved the economic plan after minor changes, the presidency announced on Twitter following a cabinet meeting at the presidential palace in Baabda.

The economic crisis in Lebanon is rooted in decades of state waste, corruption and poor governance that have burdened the country with one of the largest public debt burdens in the world. Lebanon defaulted on sovereign debt last month for the first time.

(FRANCE 24 with AP, AFP and REUTERS)