Lebanon's currency has plummeted, leaving much of its population short of food, fuel and medicine
) would soon lack the reserves needed to support the subsidy scheme. The World Bank was right and theThe old system could have been better targeted, as rich Lebanese consumed more of the subsidised goods than the poor. But the new system, yet to be implemented, is opaque. It is not clear who is eligible for the aid. Regardless, few people think Lebanon’s politicians will distribute it fairly. They have a history of doling out government largesse to their relatives and supporters .
How the cash-aid programme will be funded is also an open question. The central bank could pay for it, but it is running low on reserves and printing more pounds would increase inflation, which is already sky-high. Outside funding may be an option. Lebanon could, for example, use aid that theis giving to poor countries in order to help with covid-related economic slowdowns. The money is expected to be delivered by the autumn.
The World Bank probably would not mind if more of its money actually went to directly helping the poor. But it is running short of patience with the government. In January the bank agreed to lend Lebanon $246m to expand the social safety-net, including cash transfers for the poor. Feeding more money into that programme would be an option—if the government ever implemented it.
In the coming weeks the government is supposed to present a detailed plan on the funding and implementation of the new aid programme. But the Lebanese people are not holding their breath. Poverty is rising, basic services are failing and politicians appear more concerned with protecting the patronage system that contributed to the crisis.
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