Lebanon meets with international agencies to assess economic recovery needs post Beirut blast

Representatives from the government, civil society, donors and financing institutions held their first consultative group meeting

Anti-government protesters gather near the parliament building during a protest against power cuts, high cost of living and low purchasing power of the Lebanese pound, in Beirut. Photo: EPA

Representatives from the Lebanon government, civil society, the European Union and the United Nations met online to address the needs of poor households and assess recovery requirements in the aftermath of the Beirut port explosion, according to the World Bank.

The consultative group meeting focused on the reform, recovery and reconstruction framework (3RF), the Washington-based lender said in a statement.

The 3RF aims to ensure implementation of reforms to restore trust and improve governance; help form a people-centred recovery that addresses basic needs and restore their livelihoods; and to reconstruct critical assets, services and infrastructure that provides equal access to quality basic services for all.

Building on the framework launched by the EU, UN and the World Bank in December 2020, the meeting brought together 60 representatives from the Lebanon government (including Prime Minister Hassan Diab), civil society organisations, international donors and financing institutions to assess the needs and priorities for recovery interventions.

“The 3RF is fundamentally for the people, it is about meeting their critical needs, safeguarding their basic rights, giving them a voice and a place in policy making,” Najat Rochdi, UN deputy special co-ordinator, resident and humanitarian co-ordinator for Lebanon, said.

Lebanon is facing its worst economic crisis since its 1943 independence after defaulting on about $31 billion of Eurobonds and reeling under the impact of Covid-19. The Lebanese pound has lost more than 90 per cent of its value against the US dollar, while inflation soared as high as 146 per cent in December 2020, according to the country's Central Administration of Statistics. Annual inflation reached 85 per cent in 2020.

Lebanon government's talks with the International Monetary Fund for a $10bn bailout package have also stalled, delaying the required aid.

The meeting on Wednesday also took stock of the $314 million humanitarian assistance provided to date, the Washington-based lender said.

Members of the consultative group reviewed the reform priorities in the framework and stressed the urgency of adopting and implementing “credible reforms, which are essential to build back better and put Lebanon on the path of sustained recovery”.

They highlighted the need to weave in inclusion, gender equality and women’s empowerment, transparency and accountability, and a green recovery into the reforms process. The group also suggested that “a government be formed at the earliest opportunity” in Lebanon.

The members reviewed current financing needs, priorities and gaps in implementing the 3RF. The World Bank updated the group on the strategic priorities of the Lebanon Financing Facility, which was established to channel donor support directly to Lebanese people and businesses affected by the explosion.

Meanwhile, the Lebanon government committed to deliver on macroeconomic reforms, including progress with the IMF on macroeconomic stabilisation and restructuring of debt.

Other reforms proposed include the forensic audit of the central bank, banking sector reform, capital control, exchange rate unification and a credible path to fiscal sustainability, the statement said.

Lebanon's central bank has scuttled a forensic audit, refusing to provide the necessary information for review citing bank secrecy laws from the 1950s.

The government also expressed its commitment to prepare and approve the 2021 budget, incorporating a strong inclusive social protection programme, according to the World Bank.

Members of the consultative group emphasised the needs and priorities of vulnerable groups, in particular women, youth and people with disabilities; and the importance of adopting an area-based approach involving communities at neighbourhood level in building back greener and smarter, the statement added.