The Businessmen Union for Support and Development called on the Lebanese government to “adopt a more effective strategy to gradually lift subsidies on some commodities because the radical and immediate change in the subsidy policy will lead to an unpleasant shock in the local market.”
He said in a statement: “By maintaining subsidies for some basic commodities and materials for a limited period (between 12-16 months), society in general can adapt to the big and sudden change in the prices of all commodities, so the subsidy remains on wheat and flour for bread, medicines for chronic and incurable diseases and medical supplies. (In exchange for encouraging the use of generic drugs), in addition to activating controls at the borders to prevent smuggling, in parallel with working on activating the unified medical card.
He suggested that “the government plan includes granting the equivalent of $ 200 to every family of 5 people, in Lebanese pounds at the market exchange rate, or in digital currency afterwards, the equivalent of two million Lebanese pounds for each family of 5 people. Consequently, the total direct support amounts to 3 billion US dollars instead of the currently approved 6 billion dollars annually. In parallel, support for some basic and essential materials remains. The proposed method of support will save at least half of the current subsidy value on the state treasury and not the money of depositors, which is equivalent to 3 billion dollars annually. It will also be limited to the Lebanese, excluding those residing in Lebanon of other nationalities.
He added: “The main challenge remains in how to finance this direct support to the Lebanese, as it cannot continue to come from the reserves in the Central Bank. The public treasury is directly responsible for financing the support. With the deterioration of the financial conditions due to the economic downturn and the current crises, and to prevent the trend towards printing more national currency to cover costs in order to prevent further inflation, we suggest the forced approach to international donors for funding to solve this worsening crisis day by day.
He concluded: “The strategy proposed by the government to provide direct cash compensation to the Lebanese, as an alternative to the current mechanism based on direct support for commodities, is not the best solution to address the current economic and financial crisis and the major collapse of the Lebanese pound exchange rate. The current plans are nothing but a set of ambitious immediate and objective plans, which calls into question their feasibility and ability to have a positive impact on citizens because they do not cure the origin of the disease.