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Lebanon’s post-explosion economy, one year on: Chief economist weighs in

The Beirut Port explosion on August 4 last year not only caused the Lebanese capital’s port to go up in smoke, but it reverberated across the capital and surrounding areas, causing immense widespread physical, mental and economic damage.On Wednesday, Lebanon marks a year since the blast, the country’s worst-ever peacetime disaster. The Beirut blast, which killed 214 people, was equivalent to a 3.3 to 4.5 magnitude earthquake.For the latest headlines, follow our Google News channel online or via the app.It was one of the world’s biggest non-nuclear explosions to ever be recorded. Stored in a warehouse for six years, the large amounts of ammonium nitrate exploded and injured 6,500 people.It left the Lebanese capital in shambles, with over 300,000 people homeless and 70,000 jobless. It also left 73,000 apartments, 9,200 buildings, 163 schools and education centers, 106 healthcare facilities damaged.Prior to the blast, the country was already grappling with an out-of-control pandemic and instability, years of corruption and national debt brought on by the ruling elite.Al Arabiya English spoke with Chief Economist and head of Research at Bank Audi Marwan Barakat to better understand the state of the country now and how the blast worsened matters.“The explosion actually further worsened the country’s economic conditions, bearing in mind that Lebanon was already caught under an unprecedented macros crisis [before the blast] that drove it into real sector depression, monetary drift and huge socio-economic pressures at large,” said Barakat.“The World Bank Group, in cooperation with the United Nations and the European Union launched a Rapid Damage and Needs Assessment (RDNA) immediately after the explosion, to estimate the impact on the population, physical assets, infrastructure and service delivery in Beirut, utilizing ground data and cutting-edge remote tools and technology. The estimate of the damages and losses to the economy stands at an upper bound of circa $8 billion, very significant when compared to the size of the Lebanese economy,” he added.United Kingdom-based charity Save the Children has said that hundreds of children in Lebanon are going to bed hungry as their parents fail to make ends meet at the end of every month. The devaluation of the country’s currency has left parents unable to pay for basic needs such as electricity, food and medicine.“Our children are craving food- as simple and tragic as that. My children (16 and 13 years old) lost weight significantly and the entire situation has affected not only their physical but also mental health,” Najwa, a single mother grappling with the economic crisis in Lebanon, told Save the Children.“Both my parents are elderly with chronic illnesses. My father has cancer and, due to the situation, we missed a couple of months of treatment. Medication was either unavailable or too expensive. I don’t know how long we’ll be able to survive the situation. For months, we kept waiting and hoping things would get better but all we’re witnessing is a free fall into the abyss,” she added.Beirut explosion, COVID-19 led to highest spike in food prices The Beirut blast’s impact on the economy, coupled with that of the COVID-19 pandemic, have led to the highest spike in food prices in the world, meaning that families are having to resort to desperate measures such as buying food on credit, selling furniture, eating less and consuming poorer quality food.According to Barakat, there is room for the economic crisis to worsen even further.“In the absence of a credible Cabinet formation, the crisis can get worse in Lebanon,” he said. “As time goes by, the remaining reserves of the Central Bank are getting depleted on a daily basis. If no solution is reached within an acceptable horizon, the full depletion of BDL reserves can cause the macro situation to worsen, leading to a hyperinflation similar to a Venezuelan-like scenario and generating intense socio-economic pressures on Lebanese households,” added Barakat.He believes that “…the mild margin of maneuver within the context of a wide confidence crisis and a lack of available tangible financing” would make any measure of support “prove to be of limited impact amid the massive current and upcoming socioeconomic pressures.”Undoing the damage: What can be done? “The government of Lebanon and the international community need to start treating the situation in Lebanon for what it is- a full-fledged humanitarian crisis driven by an economy in total collapse. This crisis is entirely man-made, so it can also be man-unmade. If that doesn’t happen, children can die of hunger any day,” Save the Children’s country director for Lebanon Jennifer Moorehead was quoted as saying in a report released by the charity group on Thursday.“The intense political bickering around Cabinet formation for the past year adds to the political cloudiness, increases monetary fears and accentuates black market volatility and fuels inflationary pressures,” says Barakat.“What is needed in this political volatility period is to have concerted efforts between government, parliamentary and monetary authorities to try to lessen, as much as possible, the burden of political uncertainty on the Lebanese population.”Barakat believes that sitting back and doing nothing whilst relying on the status-quo would only lead to “total chaos”, but instead, he suggested that an orderly “restructuring” based on the International Monetary Fund’s disbursement of $860 million to Lebanon in relation to its Special Drawing Rights (SDR), an international reserve asset created by the group in 1969 to supplement its member countries’ official reserves.He suggested that the restructuring take place with strict fiscal and structural reforms in place, by a credible cabinet, which newly elected prime minister-designate Najib Mikati is set to announce in the coming weeks.“It ought to be based on the restructuring of the public sector to reduce its borrowing needs, the creation of a sovereign fund with state assets for circa $30 billion which will serve directly or indirectly to bridge the prevailing FX (Foreign Exchange) gap, the injection of liquidity into the local banking sector via a loan linked to gold reserves, floating the local currency which reduces the local debt stock and negotiating a discount on Eurobonds investors.”Read more:US hails EU decision to adopt new sanctions regime for LebanonBeirut explosion: One year since worst recent disaster, in numbersBeirut blast one year on: Wife of killed firefighter still waits for answers, justice
Source: Al Arabiya
Full Article: Lebanon’s post-explosion economy, one year on: Chief economist weighs in

Lebanese army detains man after deadly Hezbollah funeral attack

The Lebanese army said on Monday it had detained a man wanted over an attack on mourners at a funeral where three people were killed, after the extremist group Hezbollah demanded the perpetrators be detained.For the latest headlines, follow our Google News channel online or via the app.The shooting in Khaldeh, a town south of Beirut where tensions between Shia and Sunni Muslims have long simmered, has prompted leaders to warn against an escalation as Lebanon grapples with political and financial crises.The attack targeted the funeral of Hezbollah member Ali Shibli who was shot dead on Saturday during a wedding.Sunni Arab tribes claimed responsibility for that shooting, saying they had taken revenge for the killing of one of their members last year in Khaldeh.Army intelligence stormed the homes of several wanted people and detained a man who was involved in the funeral attack, the army said.Hezbollah, an armed group backed by Iran, has said it is seeking to maintain calm but said the attackers must be handed over. The group has called it a planned ambush.“You don’t want strife, then come and surrender those killers to the state,” Hassan Fadlallah, a Hezbollah MP, said in an interview with al-Jadeed TV late on Sunday.People were “boiling”, and the group could not control them all, he said.Shibli’s coffin was draped in a Hezbollah flag at his funeral in the town of Kunin in southern Lebanon.Clerics prayed over the casket and Hezbollah fighters wearing camouflage and red berets were in attendance, footage broadcast by Hezbollah’s al-Manar TV showed.“What happened in Khaldeh confirms the blatant absence of the logic of the state and that the language of uncontrolled and illegitimate arms is the one prevailing,” Fouad Makhzoumi, an independent Sunni MP, wrote on Twitter.“We are afraid of the country being dragged to strife.”Lebanon’s financial and economic meltdown marks the biggest crisis since the 1975-90 civil war.“Strife awakens on the eve of Aug. 4,” declared the front-page headline of an-Nahar newspaper, referring to the first anniversary of the Beirut port explosion that devastated swathes of the capital and killed more than 200 people.Read more:Five killed in ambush during a Hezbollah’s militant funeral south of BeirutLebanon battles wildfires for third straight dayUS hails EU decision to adopt new sanctions regime for Lebanon
Source: Al Arabiya
Full Article: Lebanese army detains man after deadly Hezbollah funeral attack

Saudi Arabia candidate for UK ‘green list’: Travel experts

Saudi Arabia is a potential candidate to be placed on the UK’s quarantine-free ‘green list’, according to research by travel consultancy the PC Agency.The traffic light system in place in the UK is being reviewed by the British government every three weeks.For more coronavirus news, visit our dedicated page.The next review is expected on Thursday August 5, with any changes coming into place the following Monday.The PC agency has has identified 12 countries that could go fully green thanks to COVID-19 rates below 30 cases per 100,000 residents and fairly robust vaccination rollouts: Austria, Bosnia, Canada, the Czech Republic, Germany, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.Saudi Arabia – together with Bhutan, French Polynesia, North Macedonia, and Norway - have also been identified as potential candidates for the green watchlist.Holidaymakers from green countries who test negative do not need to quarantine or take any additional tests.However the United Arab Emirates has not been earmarked for any change to travel restrictions. Since the UK introduced the red, amber and green light traffic travel system in January 2020, the UAE has remained on the red list, meaning visitors must pay to quarantine in a government-approved hotel for 10 days in England.Meanwhile, a minister has defended the government’s pandemic travel rules amid suggestions a new amber watchlist could be created for countries – possibly including Italy and Spain – which would signal they were close to going red.For all the latest headlines follow our Google News channel online or via the app.Matt Warman, minister for digital infrastructure, denied claims the guidelines were complicated – and defended the idea of moving away from “three cut-and-dried categories” for travel.“Saying to people if a country is on a watch list there is a risk that it could, for instance, move from green to amber or amber to red seems to me to be providing people with really important information when they’re making significant financial decisions,” he said.Read more:UK easing travel curbs for foreign-vaccinated expats from amber countries on Aug 1As Britons back home celebrate ‘Freedom Day,’ some expats in the UAE sufferEngland to drop COVID-19 quarantine for fully-jabbed travelers from EU, US
Source: Al Arabiya
Full Article: Saudi Arabia candidate for UK ‘green list’: Travel experts

UK summons Iran ambassador over attack on Israeli-managed oil tanker

Britain on Monday summoned Iran’s ambassador to London in response to what it claims was a Tehran-ordered attack on a merchant vessel off the coast of Oman that killed a British and Romanian national.For all the latest headlines follow our Google News channel online or via the app.“The Iranian ambassador to the UK, Mohsen Baharvand, was summoned today to the Foreign, Commonwealth & Development Office... in response to the unlawful attack committed on MV Mercer Street on 29 July,” said a British government statement.“Iran must immediately cease actions that risk international peace and security,” it added, saying that “vessels must be allowed to navigate freely in accordance with international law.”Foreign Secretary Dominic Raab on Sunday said that Britain “believes the attack... was carried out by Iran and was deliberate, targeted and unlawful.”Two crew members of the Japanese-owned, Liberian-flagged oil tanker, which is managed by a prominent Israeli businessman’s company, were killed in what appeared to be a drone attack, the vessel’s London-based operator and the US military said Friday. Israel also blamed Iran.US Navy forces came to the aid of the crew in response to an emergency distress call and saw evidence of the attack, said a US military statement.Analysts said the attack bore all the hallmarks of tit-for-tat exchanges in the “shadow war” between Israel and Iran, in which vessels linked to each nation have been targeted in waters around the Gulf.Zodiac Maritime, owned by Israeli billionaire Eyal Ofer, said the incident on board the MT Mercer Street on Thursday killed one Romanian and a UK national, who was a guard for British maritime security firm Ambrey.The vessel was in the northern Indian Ocean, traveling from Dar es Salaam in Tanzania to Fujairah in the United Arab Emirates with no cargo onboard when the attack occurred, it said.Iran’s state TV channel in Arabic Al-Alam, citing “informed regional sources”, said the attack was a “response to a recent Israeli attack” targeting an airport in central Syria. It did not provide further details.Read more: US blames Iran for attack on Israeli tanker off Oman, vows ‘appropriate response’Iran warns of response if security threatened after ship attack: Foreign ministryIran denies involvement in drone attack on Israeli-managed tanker near Oman
Source: Al Arabiya
Full Article: UK summons Iran ambassador over attack on Israeli-managed oil tanker

Lebanon’s PM-designate Mikati says he hoped for faster pace toward government

Lebanese Prime Minister-designate Najib Mikati said on Monday he had hoped for a quicker pace toward the formation of a new government and that his efforts would not be open-ended.His comments after a meeting with President Michel Aoun underlined the challenge of forming a new government for Lebanon, where fractious politicians have been unable to agree even as the country falls deeper into economic crisis.“I had hoped for a pace that was faster than this in the government formation. It is a bit slow,” said Mikati, who was designated prime minister last month after Saad Hariri abandoned his effort to form the new cabinet.For the latest headlines, follow our Google News channel online or via the app.The Lebanese pound, which has lost more than 90 percent of its value in less than two years, weakened. Dollars were changing hands at a rate of around 20,000 pounds after Mikati spoke, compared to 19,200/19,300 before his comments, a dealer said.Mikati, a wealthy businessman, said he would meet Aoun again on Thursday.Asked if he had a deadline for his efforts, he said: “As far as I am concerned, the timeframe is not open. Let he who wishes to understand, understand.”The prime minister must be a Sunni Muslim in Lebanon’s sectarian power-sharing system. Abandoning his effort last month, Hariri said he could not agree with Aoun, the Maronite Christian head of state.The last government led by Prime Minister Hassan Diab resigned after the Beirut port explosion on Aug. 4 last year. It stays on in a caretaker capacity until a new one is formed.Read more:Obstruction to Beirut blast probe ‘shameless’: Amnesty InternationalLebanese army detains man after deadly Hezbollah funeral attackUS hails EU decision to adopt new sanctions regime for Lebanon
Source: Al Arabiya
Full Article: Lebanon’s PM-designate Mikati says he hoped for faster pace toward government

Tunisia arrests more MPs after lifting of immunity by president

Tunisian security forces arrested Monday MP Faycel Tebbini leader of the Farmers’ Voice party, a critic of the Islamist party Ennahda. His detention comes two days after the arrest of two MPs from the populist Al-Karama (Dignity) coalition, a radical group allied to the Islamist Ennahdha Movement, local media reported Sunday..
Source: Albawaba
Full Article: Tunisia arrests more MPs after lifting of immunity by president