Business & Economy

Political paralysis condemns Lebanon to deep depression, warns World Bank

Beirut, Dec 1 (efe-epa).- The World Bank on Tuesday warned that the political paralysis in Lebanon, run by a caretaker government for nearly four months, would lead to a long economic depression.

 “A year into Lebanon’s severe economic crisis, deliberate lack of effective policy action by authorities has subjected the economy to an arduous and prolonged depression,” the international entity said during the presentation of a report on the economic situation in the Arab country.

Covid-19 and the explosion that rocked the Beirut port in August have aggravated the economic crisis, which has had “the largest and most persistent negative impact” among the three crises, the World Bank added in a statement.

The experts projected a 19.2 percent economic contraction in 2020 compared to 6.7 percent last year, the statement ran.

The poverty reached 55 percent of the Lebanese people, the United Nations said in August and it most likely to continue expanding, it warned.

 “Lack of political consensus on national priorities severely impedes Lebanon’s ability to implement long-term and visionary development policies”, Saroj Kumar Jha, World Bank Mashreq Regional Director, said.

“A new government needs to quickly implement a credible macroeconomic stabilization strategy with short-term measures to contain the crisis, as well as medium- to long-term measures to address structural challenges,” he added.

Hassan Diab’s caretaker cabinet tendered its resignation to President Michel Aoun on 10 August, six days after the powerful explosion that devastated part of the Lebanese capital, leaving 200 dead, over 6,000 injured and hundreds of thousands homeless.

Although the country promised France, which organized a donor conference for Lebanon after the explosion, to have a new government within a few days, the situation remains stagnant.

Lebanese political parties have not been able to reach a consensus to form a new government, forcing Prime Minister-designate Mustapha Adib to resign in the process on 26 September.

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