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BEIRUT: The government and the Central Bank agreed in principle to disburse the World Banks $246 million cash assistance to poor families in fresh US dollars instead of Lebanese pounds.
This information was disclosed in a letter by officials from the Wold Bank, European Union and United Nations to caretaker Finance Minister Ghazi Wazni.
In this letter, the officials said that following a meeting with Wazni and Central Bank governor Riad Salameh on Feb. 22 , a verbal agreement was reached to facilitate the disbursement of humanitarian and development assistance in hard currency as long as the current suboptimal multiple exchange rate situation persists and for countries who want to do so.
We believe that this disbursement arrangement can preserve value to both beneficiaries and donors. We acknowledge that potential programmatic and protection concerns might arise in case of hard currency disbursement and would like to confirm our readiness to discuss with competent Lebanese authorities potential risks and the implementation of adequate mitigation measures, the letter to Wazni said.
The officials told the minister that they would be grateful to receive guidance by competent Lebanese authorities in the shortest possible days on how to proceed within those circumstances in which disbursement of humanitarian and development in hard currency is not feasible or practical, in order to secure an exchange rate for the local currency which corresponds to its value on the open non-administered market.
On March 12, Lebanons Parliament passed a law on a $246 million World Bank loan that will provide a social safety net for tens of thousands of the neediest families as Lebanon grapples with a crisis that has sent more than half the population under the poverty line.
The World Bank loan will fund a direct cash assistance program for around 150,000 vulnerable families and will also be used to fund the government's battle against the pandemic.
In addition to the $246 million loan, another law granting $5.5 million from a different, existing World Bank loan to small and medium enterprises was also on the agenda and was passed by the MPs
Dan Azzi, a former CEO of a bank and financial analyst, hailed the decision to disburse the World Bank loan in fresh US dollar banknotes instead of the pound.
This is great development and a small victory for the Lebanese people fighting corruption, practically, and not just through slogans. In the old way of dispensation, a couple of banks were literally absconding with 2/3 of the money and, originally with the way the World Bank loan was designed, BDL was skimming 30 percent of the proceeds intended for the neediest segment of society, Azzi told The Daily Star.
He added that fortunately the Fourth Estate did its job by shining the disinfecting light of truth on this travesty, through a Media Blitz, triggering the wrath of a few conscientious diplomats, mainly from Germany, USA, and others.
A UN Official, Ms. Najat Rochdi, although newly stationed in Beirut, figured out the local scams our boys try to pull off, and insisted right off the bat at dispensing in cash dollars, and got her way several months ago, proving that courageous leadership and perseverance gets results. The remaining challenge is to monitor that the aid is going to the truly needy and not cronies of the sectarian corrupt leaders, Azzi said.
He hopes that the concerned parties have developed some indicia to identify the truly needy, and are distributing this cash aid directly, without going through local officials, because once you interject those, then it becomes an exercise in cronyism and clientelism.
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