Crisis-hit Lebanon to approve economic rescue plan

Beirut (AFP) –


The Lebanese government met Thursday to approve a long-awaited plan to rescue the debt-saddled economy from its worst crisis in decades, following a fresh wave of angry streets protests.

A lockdown to fight the coronavirus pandemic has added to the economic woes besetting the country, which include soaring inflation, a liquidity crunch and a plummeting currency.

In March the cash-strapped government defaulted on its sovereign debt for the first time.

The cabinet began meeting at the presidential palace in Baabda, following a third straight night of violence in northern Lebanon.

The army clashed again with protesters angered by soaring inflation and an unprecedented devaluation of the Lebanese pound.

On Monday a man was killed after being struck by a bullet fired by a soldier in clashes in the northern city of Tripoli.

In the southern port city of Sidon, demonstrators threw Molotov cocktails at bank branches and offices of the central bank overnight.

Leaks on the economic plan to Lebanese media suggest the country needs $80 billion in funds to exit the crisis, including $10 to $15 billion in external financing in the next five years.

Planned reforms reportedly include cuts to state spending and a restructuring of the public debt, one of the highest in the world at 170 percent of gross domestic product (GDP).

Lebanon is grappling with its worst economic turmoil since the 1975-1990 civil war, compounded by measures to tackle a novel coronavirus outbreak that has infected more than 700 people and killed 24.

The Mediterranean nation has been rocked by a series of political crises in recent years.

An economic crunch helped set off unprecedented cross-sectarian mass protests in October and unseated the last government.

The demonstrations had largely petered out after a new cabinet was tasked earlier this year with implementing urgent reforms to unlock billions in international aid.

But protesters have hit the streets again in recent days in defiance of the lockdown, railing against a sharp devaluation of the pound and rocketing inflation.

Prices have risen by 55 percent, while 45 percent of the population now lives below the poverty line, according to official estimates.

The government has yet to request financial assistance from the International Monetary Fund, which has so far only provided technical assistance.

Experts have lobbied in favour of an IMF bail out which they say is the country's only escape route from its current slump, but some officials remain wary of the world body.