Lebanon introduces currency cards, despite declining cash | Poverty and Development Issues

Beirut, Lebanon – After months of delays, and with only a handful of funds available, Lebanon on Wednesday opened a two-state fundraising program to help 700,000 vulnerable families cope with the loss of essential services.

Minister of Social Affairs Hector Hajjar said at the opening ceremony at the Grand Serail in Beirut, where Prime Minister Najib Mikati, legislators and ambassadors were present, that funding mechanisms only provide temporary relief.

“These programs are not a solution to the problem,” he said.

Registration for these trials will remain open until the end of January.

The first one was announced last September under the auspices of Prime Minister Hassan Diab’s government, the release of the programs was hampered by technical and operational difficulties, officials said.

But a shortage of money has also become a problem.

The World Bank has secured a $ 246m loan for one program – called Aman – which seeks to provide 150,000 families with about $ 150 a month and pay $ 200 in tuition fees for 87,000 high school students. All Aman program fees will be in US dollars.

But the welcome card program, which comes with an estimated cost of $ 556m to offer up to $ 126 a month for eligible families, has yet to find a reliable source of income. It is also unknown whether the currency will be distributed in US dollars or in Lebanese pounds – an important variation in which the pound relies on a sudden, violent decline that could undermine purchasing power.

Hajjar said talks between the government and the World Bank were “ahead” to secure funding for the card program.

The head of the International Bank at Mashreq Department Saroj Kumar Jha told Al Jazeera that the Lebanese government had sent a request for funding, but no money had been confirmed. He also said he did not expect the World Bank to fund the entire program, and that the Lebanese government should set aside funds for the program from the 2022 national budget.

“This is how stability comes in,” said Jha. “You need to properly distribute resources to meet people’s needs.”

For more than two years, Lebanon has been facing a financial crisis that has claimed lives and lives. More than a third of these people live in poverty, while the Lebanese pound lost 90 percent of its value.

With the economy in place and no good yields, the government has decided to take out a loan from a number of lenders at one time to try to keep the country afloat.

The government initially wanted to set up programs that wanted to fund it as a way to change the high cost of fuel, oil, wheat and pharmaceuticals that cost the government about $ 7bn a year.

As foreign reserves dwindle in the Banque du Liban, the central bank, government and other financial experts say adjusting the rest of the country’s economy to the poorest families could be more effective than global aid, especially in the absence of aid. a good social security program.

However, due to political unrest and disability, Lebanon began to raise social grants without financial support set up to address the plight of the poorest families.

In the summer, the government began reimbursing oil and gas subsidies. It slightly reversed medical aid last month, and continues to rise in bread prices.

Hajjar stressed that the government has been working “independently” to provide financial assistance and that the failure to set a deadline to remove aid and set up new benefits was due to administrative and technical difficulties.

“Despite our efforts, the growing financial crisis has risen sharply, especially in raising funds for essential commodities,” he said.

Corruption and mistrust

Workers and the international community continue to urge Lebanon to issue and implement anti-corruption and transparency laws. But corruption still exists.

At a press conference Wednesday, Hajjar and the Director of Central Inspection Bureau Georges Attieh tried to allay fears that corruption and political discrimination could determine who is eligible for financial aid.

Families apply through the digital platform and have to go through what the government describes as a way of intensive monitoring to ensure that they are meeting the requirements. The United Nations World Food Program, the World Bank, and finally the third independent company should monitor and evaluate the implementation of the program.

“Everything is put on a computer without any chance of someone interfering or a doctor,” Hajjar said. “I repeat this because people say this is an election card.”

But elections are scheduled for the end of March – Lebanon’s first parliamentary elections since the financial crisis began. Liberals and financial experts say the credit card programs will be used by the ruling parties in Lebanon as a tool to help strengthen political loyalty.

Increasingly, experts say, the programs are launching without any further economic and financial support – which means that recipients may face worse situations than the support they provide. The exchange rate of Lebanese pounds to Lebanese pounds occurs once a day.

The government hopes to fulfill its initial agreement with the International Monetary Fund to raise funds by the end of the year. But the past two years have not seen the successive governments take action to create a credible restructuring plan that is necessary to unlock billions of dollars in international aid.

University of Dublin finance research analyst Mohamad Faour told Al Jazeera that without such a change, funding programs would only bring some relief to the families in need.

“It’s just a temporary process, if we can assume it’s done with good intentions – as difficult as it is,” he said. “Since it was set up in the absence of a sound economic and financial plan, there are questions about its potential in the short term.”

Faour says he has no choice but to feel “very skeptical” about when the program will be launched on Wednesday, as elections are about to take place.

“As things stand, the political party wants to move to a place where we have people who rely heavily on aid,” he said.