Morning brief – Lira crash, protests, funding for electricity: Everything you need to know to start your Monday

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Lebanese security forces stand guard after protesters breached a fortified gate leading to the Parliament building in downtown Beirut on Saturday during a protest against the political system. (Credit: Anwar Amro/AFP)

Hundreds of protesters took to the streets across Lebanon over the weekend as the national currency continued to hit new lows. The lira has lost about 87 percent of its value since it began to significantly diverge from the official peg of LL1,507.5 per dollar during the second half of 2019, trading now at some LL12,300 to the dollar. On Saturday and Sunday, intermittent road blocking became common across the country while scores gathered in downtown Beirut, with some setting up tents in Martyrs’ Square. The lira’s depreciation has accelerated since the start of the month, prompting officials last week to implement measures intended to crack down on licensed and illegal money changers who “speculate” against the lira, as well as a block on electronic platforms that provide the market dollar price. However, the currency’s value has nonetheless continued to plummet.

Gebran Bassil once again called for a review of the political agreement between his Free Patriotic Movement and Hezbollah, as the relationship between the two parties continues to sour. Their memorandum of understanding, signed in 2006, calls for the establishment of a national defense strategy that addresses Hezbollah’s military arsenal. “The FPM is determined to review the document of understanding between itself and Hezbollah … to protect Lebanon through a defense strategy, state-building through a real fight against corruption and the implementation of all reforms,” the FPM leader said in a prerecorded televised address on Sunday. Bassil’s father-in-law, President Michel Aoun, proposed the defense strategy more than a decade ago, but it has been on hold for years. Bassil said the strategy should be based on “internal understanding, preservation of Lebanon’s elements of strength to maintain a balance of deterrence, and the centrality of state decision-making without abandoning the sacred and legal right to self-defense.”

Parliament approved a $246 million loan from the World Bank Friday to provide cash assistance to impoverished Lebanese families. Under the controversial program, more than 160,000 households will receive monthly payments of LL200,000, plus LL100,000 for each family member, for one year via prepaid cards. At the heart of the issue is the method of distribution, which will be done in lira instead of dollars, at a rate far lower than that offered by exchange shops. Concerns over the potential for existing political patronage networks to co-opt the scheme also came to the fore during the session after parliamentarians decided to cut $21 million in administrative expenses, part of which came at the expense of oversight. The cuts, according to caretaker Deputy Premier Zeina Akar, will increase the number of recipient households from the original 147,000 to 161,257.

A joint parliamentary committee will discuss a LL1.5 trillion bill to fund state-run Électricité du Liban through 2021 on Tuesday. Without funding to secure fuel, Lebanon risks a total blackout, caretaker Energy Minister Raymond Ghajar has warned. However, some are using the issue as a political tool as the government formation crisis drags on, with opponents of President Michel Aoun saying that any funding must be contingent on reforms. Reforms, however, cannot typically be implemented by a caretaker government. The president and Saad Hariri have been at loggerheads since October when Parliament — without the support of FPM lawmakers — designated Hariri to form a new government. Both men must agree on the composition of the next cabinet.

For the first time since Jan. 24, the number of new COVID-19 cases on a Sunday exceeded 3,000. According to Firass Abiad, the general manager of Rafik Hariri University Hospital, this confirms an “upward trend and impending wave” as Lebanon moves forward with easing lockdown restrictions alongside a slow vaccine rollout. Some 96,888 vaccine doses had been administered as of Monday morning, while just 17,711 people have received the requisite two doses to guarantee immunity. “An increase in hospitalizations and deaths will follow,” Abiad tweeted, noting that it “is hard to implement tougher measures when the existing ones are being ignored.”

 

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