| 20 May 2024, Monday |

How the Economic and Social Council will address the hurdle of lifting subsidies?

The Director General of the Economic and Social Council, Dr. Mohammed Saifeddine, talked to “Sawt Beirut International” correspondent Mahasin Mursal, about the council’s proposal for providing support to needy people, after several meetings with representatives of the World Bank, economic experts and specialists. Saifeddine said: “This step was taken to reach the correct path, especially that the Central Bank’s reserves have shrunk and we’ve reached to the mandatory reserves.” He added, for this reason the government should be providing more efficient support and reduce costs, until the political officials reach a solution for forming the government, which is required to take several steps to surpass the crisis through searching for funding resources abroad.

Saifeddine said that the prominent points in the council’s proposal includes focusing on direct financial support rather than the commodity support; therefore supporting the citizen’s purchasing power. The council proposed providing citizens a card that enables them withdrawing cash dollars from the ATM, at a monthly ceiling of $100 per family. This step will preserve the purchasing power regardless of any changes in the exchange rate. Subsidies on main commodities such as flour shall be kept so all Lebanese can benefit from subsidized bread. Diesel will be also subsidized in the first year, accompanied with strict monitoring on consumed quantities. Electricity tariffs shall be corrected and subsidies will be lifted completely on other goods, except for generic pharmaceuticals and not the originators.

Saifeddine affirmed that the council have visited the three presidents, as well as Central Bank’s Governor where they discussed the possibility of converting the project into a draft law to be referred by the government to the Parliament for approval. “The feedback was positive, however minor technical details require more indepth research.”

Regarding financing the ration card, Saifeddine said: “We proposed resorting to international aids and grants provided by several donors including the World Bank loan program which is worth $246 million. The government can also use the loan provided by the European Union that is valued at $70 million, and the remaining required amount will be taken from the Central Bank through the Lebanese state.” He added that the government will be also required to find additional external resources to finance the card.

All the suggested proposals may be an entrance for a solution, however the funds for financing the ration card should be available. But it seems that the deposits are the target, as the International aid is only limited to the World Bank loan which does not exceed $246 million.

  • Sawt Beirut International