World Bank to give Lebanon an additional $300 million as crisis worsens

(Patria) - The World Bank will send $300 million in additional funding for the most vulnerable families in Lebanon, Bloomberg reported.

The aid package will extend cash transfers to 160,000 poor households for 24 months and support the development of a "unified social safety net system in Lebanon," according to a statement from the Washington-based lender.

With an economy in decline, the aid offered is only a fraction of what Lebanon needs to cope with a collapse that has pushed three-quarters of its population into poverty.

Efforts to secure greater financial dealings with foreign countries have faltered, leaving the Lebanese economy in freefall after a banking crisis emptied the government's coffers and forced it to pay $30 billion in international debt in 2020.

The massive depreciation of the currency has exacerbated the plight of the Lebanese by destroying their life savings and reducing their salaries. This year, Lebanon's first official devaluation in a quarter of a century made the pound the worst-performing currency in the world.

The World Bank estimates that Lebanon's real gross domestic product has shrunk by almost 40 percent since 2018, wiping out 15 years of economic growth. Annual inflation approached 270 percent in April.

In response, the World Bank is working to improve Lebanon's social safety net, especially as the government moves to phase out subsidies for fuel, food, and medicine that have helped people make ends meet.

The new package is part of a program originally approved in January 2021 to help Lebanon manage the consequences of the economic crisis and the coronavirus pandemic.

The funding will "enable the Lebanese government to continue to respond to the growing needs of poor and vulnerable households suffering in a severe economic and financial crisis," said Jean-Christophe Carret, World Bank Director for the Middle East.