Caretaker Finance Minister Ghazi Wazni. (Credit: Dalati & Nohra)
BEIRUT — The Lebanese government has agreed to pay out long-delayed World Bank-funded cash assistance in US dollars, resolving a major obstacle to getting money into the hands of some of Lebanon’s poorest families amid a deepening economic crisis.
The question of whether the payouts to vulnerable families would be in dollars or lira was the latest of a series of issues that have delayed implementation of the Emergency Social Safety Net program, which was approved by the Bank’s board in January and by Parliament in March.
The centerpiece of the $246 million loan is a cash assistance program that would provide aid to at least 147,000 of the country’s poorest families.
As originally announced, the aid would have been paid out in lira at a rate of LL6,240, but as the lira continued to nosedive, the Bank later insisted that it should be paid out in dollars to ensure that beneficiaries would get the aid’s full value.
The Lebanese government, meanwhile, had balked at the requirement to pay in dollars and pointed to language in the loan agreement that outlined the mechanism for paying out in lira.
However, in a letter sent on Monday by caretaker Finance Minister Ghazi Wazni to the World Bank, which L’Orient Today obtained, the government appeared to have changed its stance.
Wazni wrote, “The Ministry of Finance understands the World Bank’s concerns to preserve and ensure the full value of aid and to protect the objectives of this loan.”
As a result, Wazni wrote, the ministry is prepared to pay out beneficiaries in dollars via bank counter, ATMs, money transfer offices or “any other withdrawal channel agreed on with the World Bank … until a transparent mechanism to determine the weekly or daily exchange rate between LBP and USD is developed by the Ministry of Finance and Banque du Liban (BdL) in terms agreeable to the World Bank.”
Once such a mechanism is in place, he wrote, beneficiaries would have the option to choose between being paid in dollars or lira.
Wazni declined to comment on the letter.
The Bank’s director for the Levant region, Saroj Kumar Jha, thanked the caretaker finance minister in a Twitter post.
“This decision would allow poor households to receive [the] full value of the World Bank assistance and protect the objectives of [the safety net program],” he wrote.
The apparent progress toward implementing the cash assistance program comes as the country is facing unprecedented shortages of electricity, fuel, medicine and now even bread and drinking water.
Some hurdles still remain before the money can be disbursed, however. The government needs to complete verification of the beneficiaries and hire an independent monitoring agency, Jha noted. The government must also sign an agreement with the World Food Program to administer the cash assistance program.