In a status update report made public Tuesday the World Bank said Lebanon has not yet submitted paperwork required to begin implementing the financial aid, which the group demands a maximum of 120 days after board approval.
The report read: “None of the effectiveness conditions have been met to date and the World Bank is working closely with the government to ensure speedy compliance with these conditions in order to proceed with project implementation.”
The emergency crisis and COVID-19 response social safety net project was ratified by Parliament March 12, and followed by President Michel Aoun’s signature authorizing the bill on April 8 and was published in the Official Gazette.
With more than half the country now estimated to be living below the poverty line, due to the country’s acute economic crisis that has soared inflation rates near 400 percent, consequently pushing basic necessities out of reach, the aid project cannot arrive quick enough.
Lebanon has been run by a government only in caretaker capacity for 250 days, as prime minister-designate Saad Hariri has so far failed to form a Cabinet in agreement with Aoun and under demands proposed by French President Emmanuel Macron, needed to unlock international financial assistance.
The political stagnation has caused immense instability resulting in the Lebanese pound’s crash, losing 90 percent of its value since October 2019, which has in turn caused widespread unrest and fueled angry protests.
The World Bank loan aims to halt the growing number of people slipping into poverty by providing access to Lebanese pounds, through a pre-paid electronic card.
But the three-year project has been met with criticism, due to the difference loaned in US dollars to the amount received in Lebanese pound by each beneficiary.
Around 800,000 individuals will qualify for the support, who will receive LL100,000 a month for a year, according to the World Bank’s exchange of LL6,240 to the dollar, an exchange rate attempting to reflect the devaluation of the pound.
With the Central Bank’s pegging of LL1,500 to the dollar, the country’s official exchange rate, some have raised concerns that recipients are being short changed by getting less than the black market rate, which has sat at LL12,000 to the dollar in recent days.
The World Bank addressed this issue on its website, writing that the exchange rate will be 1.6 times higher that the Central Bank’s Electronic exchange platform, currently at LL3,900 to the dollar.
“This is the highest rate obtained for any internationally financed program in Lebanon although it does not match the US bank note rate (or street rate), yielding a transfer of benefit to the financial system.”
In addition, the status report revealed concerns that the vetting of hundreds of thousands of families to receive the support, has not yet begun. “Most importantly, the verification of applicants - one of the disbursement conditions - has not started and is expected to take 4-6 months at minimum.”
It advised that the process should have begun “several months ago to not delay implementation.”
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