The World Bank said the loan would support the development of a national social safety net in Lebanon, which was grappling with a financial crisis before the pandemic struck, leading nearly half of the small country’s population to six million people in poverty.
The World Bank has approved a $ 246 million loan to Lebanon to provide emergency cash assistance to nearly 8,000,000 Lebanese amid the country’s worsening economic and health crises.
The World Bank said in a statement Tuesday evening that the loan would also support the development of a national social safety net in Lebanon, which was grappling with a financial crisis before the pandemic hit, leading nearly half of the population of the small country of six million people in poverty. More than a million Syrian refugees live in Lebanon.
The economic crisis has resulted in an expected 19.2% drop in gross domestic product, triple-digit inflation and pushes 1.7 million people below the poverty line. Some 22% of the population is expected to fall into extreme poverty.
International donors have provided direct humanitarian aid to Lebanon. But in the absence of major structural reforms, talks with the International Monetary Fund that began last summer have failed to produce a bailout for the cash-strapped government. The worsening crisis has depleted foreign exchange reserves in this import-dependent country and caused the local currency to fall, losing nearly 80% of its value against the dollar. The government is discussing ways to remove subsidies from some basic commodities and has already raised the price of basic flour and bread.
Meanwhile, a surge in coronavirus infections – amounting to around 4,000 new cases per day in recent days – and a strained healthcare system have compounded concerns. A massive explosion last summer in the port of Beirut devastated the city, killing more than 200 people and injuring 6,000.
“The consequences of these repeated shocks on the economic well-being of households are considerable and potentially disastrous,” said Saroj Kumar Jha, regional director of the World Bank.
The loan will provide cash assistance for one year to 1,47,000 extremely poor Lebanese households, or about 7.86,000 people, through a prepaid electronic card.
The loan also includes school fees for some 87,000 children between the ages of 13 and 18. It will also help Lebanon develop a social registry to determine who needs help in the future.