Diab Says Govt. Wants to ‘Rationalize’ Essential Goods Subsidies


Caretaker Prime Minister Hassan Diab on Monday chaired a ministerial meeting dedicated to discussing the issue of the subsidization of imported essential goods amid the severe financial and economic crisis in the country.

“We are a caretaker government, but the country is facing a crisis,” Diab said at the beginning of the meeting.

“We are trying to rationalize the financing of imports and we are looking for a way that does not harm the people while slashing the cost of this importation,” Diab added.

Al-Jadeed TV meanwhile reported that Central Bank Governor Riad Salameh told the conferees that “he has no money for subsidization and that ministers should specify the essential and very necessary goods that will be subsidized.”

“There is no inclination to end the subsidization of (Arabic pita) bread and diesel will remain subsidized in the winter season,” al-Jadeed added.

MTV meanwhile reported that there are discussions over “rationing power supply to save fuel and over ending the subsidization of nonprescription medicine.”

“Intensive meetings will be held at the Grand Serail tomorrow and taking a final decision on the issue of ending subsidization might be postponed to next week, pending an agreement with the Iraqi government over the import of fuel,” MTV added.

According to reports that emerged earlier in the day, a decision has been taken to end the subsidization of some types of flour. The decision will not affect the subsidization of flour used in the country’s main type of bread, according to the reports.

On October 9, Diab had adamantly rejected any move to end subsidies of goods in the crisis-hit country, warning it would lead to a “social explosion” as the central bank’s reserves dwindle and the local currency continues to drop, throwing more Lebanese into poverty.

Lebanon is mired in the worst economic and financial crisis in its modern history. It defaulted on paying back its debt for the first time in March, and the local currency has lost nearly 80% of its value amid hyperinflation, soaring poverty, and unemployment. Talks with the International Monetary Fund on a bailout package have stalled since July.

Since the local currency’s collapse, the central bank has been using its depleting reserves to support imports of fuel, wheat and medicine.



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