Lebanon asks allies for help with import crisis
BEIRUT - Lebanon's outgoing prime minister Saad Hariri asked foreign allies for help on Friday as its dollar-starved economy faces an import crisis after weeks of political and economic turmoil.
Lebanon asked for credit lines from the United States, France, Russia, Saudi Arabia, Egypt, Turkey, China and Italy, a statement from Hariri's office said.
The appeal was part of an effort "to address a liquidity crisis and secure basic imports" and was critical to preserving food security, the statement said.
Since October 17, Lebanon has been rocked by anti-government protests that triggered a protracted lockdown and prompted the cabinet to resign within two weeks.
But political paralysis amid the ongoing demonstrations has aggravated a dollar liquidity crisis that since September has seen banks limit dollar withdrawals and transfers.
With banks failing to provide sufficient dollars, the greenback is selling for more than 2,000 Lebanese pounds on the parallel market for the first time since it was pegged at 1,507 in 1997.
Importers of fuel, medicines and wheat warn of shortages if the situation persists.
Petrol station owners have already staged strikes, and hospitals have threatened to stop admitting patients, fuelling public panic.
To ease the crisis, the central bank said in October it would facilitate access to dollars at the official rate for importers of fuel, wheat and medicine.
Other sectors have struggled to obtain hard currency for imports however, with banks capping dollar withdrawals at $500 a week.
Even before protests began, economic growth had stalled following repeated political deadlock in recent years, compounded by the war in neighbouring Syria.
Public debt stood at more than $86 billion, over 150 percent of gross domestic product, according to the finance ministry.
The World Bank has warned of an impending recession that may see the number of people living in poverty climb from a third to 50 per cent of the population.
Unemployment, already above 30 per cent for young people, would also increase, it said.