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Sunday , September 20 2020

World Bank warns of risk to Lebanon economy

Student protesters chant slogans during ongoing protests against the Lebanese government, in front of the government palace in Beirut, Lebanon, Saturday, Nov. 9, 2019. Lebanon’s president is meeting with several Cabinet ministers and top banking officials in search for solutions for the deepening financial and economic crisis. (AP Photo/Bilal Hussein)

BEIRUT, Nov 9, (AP): The World Bank on Friday urged Lebanon to form a new Cabinet “within a week” to prevent further degradation and loss of confidence in its economy, warning of grave risks to the country’s stability amid a worsening fiscal and economic crisis.

Saroj Kumar Jha, the organization’s regional director, told The Associated Press that the World Bank observed “enormous losses” in recent weeks and said a new government was urgently needed to redress the situation. “We are very concerned that this will impact the Lebanese poor people, middle class” and businesses, he said in an exclusive interview.

Prime Minister Saad Hariri resigned his government on Oct 29 in response to the unprecedented nationwide protests that have swept Lebanon starting in the middle of last month. The protests erupted over proposed new taxes and have snowballed into calls for the government to resign and for the entire political elite that has ruled Lebanon since the end of its 1975-90 civil war to step aside. The protests have paralyzed Lebanon and kept banks shuttered for two weeks.

Since they opened again last Friday, people have been rushing to withdraw money, fearing that the country’s crisis would further deepen amid shortage in liquidity. The banks subsequently have been imposing irregular capital controls to protect deposits and prevent a run on the banks, adding to the turmoil.

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