Lebanese purchasing power continues to shrink amid financial collapse

The Lebanese pound hit record lows this week, trading at almost LBP29,000 to the US dollar, leading to an intervention from the Banque du Liban that allowed the exchange rate to drop to LBP27,000.

This spurred self-employed professionals to call for a national state of emergency to be declared, while the transport sector announced that Thursday would be a “day of anger.”

Further exacerbating the situation in Lebanon, the director-general of telecom company Ogero, Imad Kreidieh, said he had applied for an urgent advance to purchase fuel to continue operating the electrical generators for telecom networks.

“But President Michel Aoun refrained from signing decrees since the Cabinet is not convening, which may lead to the suspension of our services and interruption of internet services,” he added.

In light of Lebanon’s increasing financial challenges, the purchasing power of Lebanese citizens has shrunk by 95 percent, while the minimum wage has become the equivalent of about $24.

The head of the Syndicate of Food Importers, Hani Bohsali, said: “The situation is too dangerous. It is not limited to the exchange rate or price increase. Food security is in danger. Regardless of the ability to secure dollars for imports, the problem has become in the consumer’s ability to purchase goods. Chaos is pervading markets.”

The heads of professional syndicates met on Wednesday and expressed “deep concerns about the comprehensive deterioration that has crossed the line and is now threatening the country’s foundations.”

The syndicates called for the need to declare a national state of emergency, accompanied by “vigorous work” to initiate a political solution to save the country and put in place a clear and effective rescue plan, especially “in the absence of serious solutions” for social and economic issues.

“BDL and the Association of Banks in Lebanon ought to take urgent measures to make it easier for the professional syndicates to withdraw their deposits in Lebanese and foreign currencies as soon as possible,” the syndicates demanded, threatening to sue BDL and ABL, and carry out massive protests.

There are no prospects of the Cabinet convening any time soon, as Hezbollah and the Amal Movement insist on removing Tarek Bitar, the judge leading the probe into the Beirut port blast, before attending any sessions.

Bitar has reiterated his demand for the arrest of former finance minister, MP and leader in the Amal Movement, Ali Hassan Khalil.

Some political observers interpreted these developments as “new means of pressure against the continuous disruption of Cabinet sessions by Hezbollah and the Amal movement,” while other pro-Hezbollah observers believed this was “a new American means of pressure to besiege the party.”

Parliament Speaker Nabih Berri, an ally of Hezbollah, told his visitors on Wednesday: “99 percent of our suffering in Lebanon stems from internal disputes.”

He accused Aoun and the Free Patriotic Movement of opposing the Taif Agreement and abstaining from implementing laws, especially the law on electricity which, he said, was to blame for over 45 percent of the state’s financial deficit.

Berri said that he and Hezbollah did not want Bitar to be removed from the port probe. Rather, they were demanding that the investigation abide by the law and constitution.

“The law granted judges the right to be tried before a special tribunal, as well as it granted MPs, presidents and ministers the right to be tried before a parliamentary body. Why were these rules and principles not adhered to?”