Lebanon has been going through an unprecedented financial crisis with the local currency depreciating by over 90 per cent, limiting people’s ability to afford their basic needs…reports Asian Lite News
A senior UN official has warned that Lebanon may be turned into a “failing state” if the government does not succeed in implementing quick and serious reform measures amid the current unprecedented financial crisis.
“The Prime Minister should exercise his authority and move the country forward. There is no time to waste,” Olivier De Schutter, UN Special Rapporteur on extreme poverty and human rights, said during a press conference held at the end of his mission in the capital Beirut.
He also noted that with a highly regressive tax system, Lebanon is “among the most unequal countries on the planet whereby 10 percent of the wealthiest people earn 70 percent of the total wealth”.
De Schutter pointed out that Lebanon is facing four main crises, including the presence of a big number of Syrian refugees; the devaluation of the Lebanese pound amid the rising inflation; the Covid-19 outbreak which increased school drop-out among students; and the impact of the 2020 Beirut port blasts which left thousands of people homeless and hundreds of thousands others jobless.
“Behind all of these crises, there is a crisis of trust,” he added.
The official emphasised the need for the political system to recover its integrity, especially when it comes to the banking sector responsible for the downfall of the Lebanese pound and the impoverishment of people.
He noted that one of the inconveniences facing the banking sector is the fact that 18 out of 20 banks have major shareholders linked to the political elites.
“We need to prevent the conflict of interests between the business sector and politicians, otherwise Lebanon will become a state that is captured by economic interests,” he said.
Lebanon has been going through an unprecedented financial crisis with the local currency depreciating by over 90 per cent, limiting people’s ability to afford their basic needs.
The country’s social stability started deteriorating since the October 2019 uprising, adding to it is the economic impact of Covid-19 and the deadly Port of Beirut explosions in August 2020.
Moreover, the failure to form an effective government to implement much-needed financial reforms accelerated the deterioration of the socioeconomic situation by resulting in the collapse of the Lebanese pound and an increase in annual inflation by 158 per cent with food inflation going up by 550 per cent.
The country’s poverty rate is currently hovering over 78 per cent.