Lebanon makes another plea for aid at Dubai Summit

“We expect aid from all of you once we convince you it’ll be spent in the right way,” caretaker Finance Minister Youssef El Khalil told a meeting of government and institutional officials in Dubai, one of seven sheikhdoms that make up the United Arab Emirates. 

Donors including Saudi Arabia and the European Union have pledged billions of dollars but haven’t delivered since Beirut has yet to embark on critical economic reforms and tackle endemic corruption. Lebanon struck a $3 billion deal with the International Monetary Fund last year on the condition it carries out measures including audits of the central bank and its banking sector. 

“We are explaining our situation to the UAE and all those participating,” El Khalil said on the sidelines of the conference. 

The UAE is listening and asking questions, and Lebanon hasn’t formally asked for aid and they haven’t offered, he said. No specific amounts are being discussed. 

Lebanon’s 90% Devaluation Leaves Pound Trailing Black Market 

The country’s financial implosion has been dubbed by the World Bank as one of the worst globally since the mid-19th century. The US-based lender has supported the Middle Eastern nation with millions of dollars since the crisis erupted in 2019. 

Lebanon defaulted on $30 billion in international debt almost two years ago and saw its economy crater, with a combination of triple-digit inflation and a currency meltdown wiping out people’s life savings. 

Saudi Arabia Says Days of Unconditional Foreign Aid Are Now Over 

“The private sector has been doing better and better,” El Khalil told the conference. He’s part of a caretaker government that was installed two years ago. 

The issue is with the public sector, he said. The government spends more than 60% of its budget on salaries of 300,000 state employees including the armed forces. 

A senior World Bank official said Tuesday that Lebanon is in the most precarious situation in the Middle East in terms of debt transparency. 

“Lebanon has a huge governance issue, an immense governance issue, the economy is not manned today that’s the issue,” said Ferid Belhaj, the World Bank’s vice president for Middle East and North Africa, in an interview with Bloomberg TV. “You feel that there is nobody driving the car of the economy of Lebanon.”