The Finance and Budget and the Foreign Affairs and Expatriates Parliamentary committees approved a World Bank loan of $150 million to Lebanon to finance wheat imports, the heads of the committees MPs Ibrahim Kanaan (FPM/Metn) and Fadi Alameh (Amal Movement/Baabda) announced on Thursday. The full Parliament still has to approve the loan before it can take effect.
The loan, which was approved by the World Bank on May 6, was made to “finance immediate wheat imports to avoid the disruption in supply over the short term and help secure affordable bread for poor and vulnerable households,” a World Bank spokesperson told L’Orient Today. The war in Ukraine had disrupted global supply chains, leading to fears of wheat shortages in Lebanon. Indeed, the country has been facing shortages of bread in recent weeks.
Following the Finance and Budget committee meeting, which was attended by caretaker Deputy Prime Minister Saade Chami and caretaker Finance Minister Youssef Khalil, Kanaan said that other members of the committee “had reservations and questions” on some terms of the law. Kanaan said he had asked “cabinet and Parliament to answer a number of financial and supervisional questions to make sure the loan will be spent according to the formal procedures and that there is a real monitoring for it.” Kanaan also raised questions regarding the period in which the Lebanese will benefit from the loan.
The Foreign Affairs and Expatriates Parliamentary committee head Alameh told L’Orient Today following the session on Thursday that one of the most important questions the committee members had raised was, “How is Lebanon going to pay back the loan, which is in dollars? It is not the first time this point is raised, but is [raised] in every deal as Lebanon is struggling.”
Lebanon has not paid yet for a one-year deal under which it has received fuel oil for its power plants from Iraq since last September. According to the deal Lebanon should provide Iraq with “services,” which are to this day not identified and not implemented. Alameh added that another issue that was raised is the supply chain to Lebanese mills and bakeries, amid accusations from the Economy Minister Amin Salam of facilities hoarding subsidized wheat.
For his part, member of the Foreign Affairs committee MP Salim Sayegh (Kataeb/Kesrouan) told L’Orient Today that one of the points he raised during the meeting is the credits that will be opened by the Lebanese government will be officially recorded at the official rate of LL1,507 against the dollar. The dollar stood at around LL29,000 against the dollar on the parallel market against the dollar as of Thursday.
“Which party in Lebanon will benefit from the difference in the dollar rate? It is not clear,” Sayegh said.
Sayegh also alleged that “half of the beneficiaries of the loan are from the Syrian refugees… now we take loans to feed the Syrians.”
According to the World Bank, the loan is meant to also benefit the “displaced population and refugees in Lebanon.”
Sayegh also said that the loan’s terms “bypasses the administrative skills [in Lebanon] through an indirect assistance to technicians that are not [public] employees.”
The World Bank agreement includes a $2.5 million “project management and capacity building” component, which includes “consultancy services and technical assistance that will strengthen MOET’s oversight function as well as capacity to manage the gradual transition from the current wheat subsidy system to a more market-oriented system.”
“The situation in Lebanon cannot afford having such a loan, but it is for the brotherly countries to provide a donation without anything in return but respecting the standards of rightly ruling and transparency,” Sayegh said, without specifying which countries he thought might donate wheat to Lebanon.
Also during his press conference on Thursday, Kanaan said that a law that would lift banking secrecy was approved yesterday by a parliamentary subcommittee, and the finance committee “will hold a session on Monday to finally approve it.”
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