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07 November 2019
ECONOMY

World Bank reiterates its commitment to support Lebanon

A wave of massive protests across Lebanon against the ruling elite pushed Prime Minister Saad al-Hariri to resign last week, toppling his coalition cabinet and there has been no sign of progress toward agreeing on a new government.

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The World Bank has reiterated that it stood ready to support a new Lebanese government, warning the country had no time to waste to tackle an emerging economic crisis worsening by the day.

Saroj Kumar Jha, World Bank’s Regional Director, said, “Politics captures the most attention, but the economy has the most risks—with every passing day, the situation is becoming more acute and this makes recovery extremely challenging.”

The bank said that the balance of payments constraints are leading to dire conditions for businesses as well as workers and the declining confidence in the economy is also causing higher dollarization of deposits, which impose a heavy toll on the balance sheets of banks and Lebanon’s central bank.

Jha said that the World Bank had earlier projected negative growth of around - 0.2 per cent, now the bank projected the recession to be even more significant due to increasing economic and financial pressures.

The World Bank is among foreign donors who pledged billions of dollars in badly needed aid last year, as long as Lebanon’s government enacts reforms it has long delayed. But with foreign allies not fully convinced, the money has yet to flow into the economy.

Jha emphasised that Lebanon does not have the luxury of waiting to address critical economic and social issues following his meeting with President Michel Aoun.

“We must arrest further degradation of the Lebanese economy as well as its social consequences and rapid government formation that meets the expectations of all Lebanese people is the most urgent step,” said Jha.

The World Bank said that it stands ready to extend all possible support to the new government that commits itself to good governance and creating opportunities for all Lebanese people.


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