Lebanon approves long-awaited economic rescue plan after months of unrest
Issued on: 30/04/2020 – 15:32Modified: 30/04/2020 – 15:34
The Lebanese government on Thursday approved a long-awaited plan to rescue the economy from its worst crisis in decades following a fresh wave of angry street protests this week. Nationwide protests broke out in October accusing the country's political class of corruption and mismanagement.
Diab's cabinet unanimously adopted the plan at a meeting at Baabda Palace and he was expected to lay out its details in a televised address to the nation later in the day.
Announcing the plan on Thursday, Diab said his government would use it to apply for an International Monetary Fund (IMF) programme to help the economy through an acute crisis that could last up to five years.
"If we get (IMF support), and God willing we will, it will help us to pass through this difficult economic phase which could be three, four or five years," Diab said.
The plan was finalised following several days of violent confrontations between protesters and Lebanese security forces that saw dozens of angry youth vandalising 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 rioting triggered by the economic crisis amid a weeks-long coronavirus lockdown.
Panic and anger has gripped the public as they watched the national currency – the Lebanese pound, which has been pegged to the dollar for almost three decades – plummet, losing more than 60 percent of its value in recent weeks. Public debt has soared while the economy contracted and foreign inflows dried up in the already heavily indebted country that relies on imports for most of its basic goods. The tiny Mediterranean country of about five million people is one the most indebted in the world, with the national debt forming nearly 170 percent of GDP.
Nationwide protests broke out in October against the country's political class amid accusations of widespread corruption and mismanagement of resources.
The World Bank warned in November that the poverty rate could rise to 50 percent if the economic situation worsened.
International donors have long demanded that Lebanon institute major economic changes and anti-corruption measures to unlock $11 billion in pledges made in 2018. But the country's economic crisis deepened and the cash-strapped government announced in March it was defaulting on its sovereign debt for the first time.