Lebanon’s social and economic crisis has grown acute. Today, many Lebanese citizens are struggling to survive, dealing with dramatic price rises and huge shortages of food, fuel and basic products.
The situation has been exacerbated by the fall of the Lebanese pound, which – over the course of the last 18 months – has lost more than 90% of its value. This has sparked unsustainable hyperinflation that is causing financial misery for Lebanese citizens.
Adel Afiouni is an economic and banking industry expert who served as the Lebanese Minister of State for Investments and Technology from 2019 to 2020. Speaking with Sky News Arabia on the 22nd August 2021, Mr Afiouni explained that Lebanon is now using at least six different foreign exchange rates for the US dollar, depending on the particular type of goods or services in question.
Adel Afiouni asserts that this situation is unacceptable in the middle of the current crisis faced by Lebanese citizens. As he points out, it is important to have a unified foreign exchange rate for the US dollar, reflecting the market and real demand and supply dynamics. He is calling for people in need to be supported through direct and transparent aid, rather than via artificial official foreign exchange rates.
Mr Afiouni indicated that the current Lebanese Government and authorities have failed to provide viable and sustainable solutions to tackle the crisis, instead offering piecemeal and patching measures that actually do more harm than good in terms of helping Lebanon and its people.
He explained that the recent decision to revise the current subsidy system does not resolve the issue, merely increasing subsidized prices and consequently increasing the cost of living. In short, he indicated that the changes do nothing to reform what he considers a fundamentally flawed system that predominantly benefits wealthy people, merchants and smugglers. Adel Afiouni is calling for radical changes, prioritising the lifting of subsidies and the provision of social support as a safety net for the country’s poorest citizens.
When asked by Sky News Arabia how he would solve the current crisis in Lebanon, the former Minister of State for Investments and Technology explained that the only viable solution is a comprehensive rescue plan that lifts the subsidies system, while simultaneously creating a safety net to protect the poorest in society.
He said that this rescue plan should also include a financial plan restructuring the banking sector; a fiscal plan restructuring public debt and reforming public finance; and a financial support and liquidity injection from the International Monetary Fund and donor countries.
Adel Afiouni contends that such a plan should have been implemented more than two years ago, explaining that Lebanon now needs between five billion and ten billion US dollars in short-term funding to salvage its economy and rescue the country.