Lebanese protest against rescue plan as government seeks IMF help

Hundreds of Lebanese gathered on Friday outside Beirut’s central bank and elsewhere in the country, a day after Prime Minister said he would ask for an International Monetary Fund (IMF) bailout to deal with a crisis economic and financial spiral.

Protesters criticized the government’s handling of the unprecedented crisis that saw the collapse of the local currency, devastating their economies and driving up prices and inflation. Scuffles broke out outside a private bank and soldiers were seen beating and removing at least one protester.

The government “does not even meet the most basic needs,” said a protester in Beirut, Ahmad Demashqia. There have also been rallies in northern and southern Lebanon to commemorate May 1, International Labor Day.

Lebanese Prime Minister Hassan Diab signed the official request for IMF assistance on Friday. He said the government had taken “the first step on the road to saving Lebanon from the deep financial pit”. Cabinet had adopted a long-awaited bailout on Thursday.

France said on Friday that it was urgent for Lebanon to implement the reforms, describing the bailouts as essential to the country’s recovery.

“It is on this basis that France is ready to support the efforts of Lebanon,” said the spokeswoman for the French Ministry of Foreign Affairs, Agnes von der Muhll.

But the protesters were skeptical. In the southern city of Sidon, 19-year-old Omar al-Mughrabi said the country needed radical change – not failed or ineffective policy reform.

“Going to the IMF is not the solution,” said al-Mughrabi. “We don’t need more debt than we already have.”

The Lebanese banking association also expressed opposition to the government’s decision, saying it could “in no way” approve a bailout that “would further destroy confidence” in the country.

Lebanon, one of the most indebted countries in the world, defaulted on its sovereign debt for the first time in March. The anti-government protests that broke out in October have subsided during a nationwide blockade since mid-March to curb the spread of the coronavirus. Lebanon, a country of five million, reported only 729 cases and 24 deaths and began easing some virus restrictions this week.

Many demonstrators wore masks against the virus.

The foreclosure has worsened the acute bite of the recession, increasing unemployment and popular resentment. In recent days, protesters have ignored social distancing measures and calls to stay at home to gather outside the central bank and private banks, sparking clashes with the security forces and the military. In the northern city of Tripoli, a protester was killed earlier this week.

Commodity prices have increased, in some cases by more than 60%. The Lebanese pound, pegged to the dollar for 30 years, has lost almost 60% of its value.

With a stable national currency, the Lebanese had used their pound and the dollar interchangeably, many keeping their savings in dollars. To cope with a liquidity crisis and a massive import bill, the central bank decreed that most withdrawals could only be made in local currency. The decision further weakened the pound.