The Lebanese citizen lives on the impact of the shocks resulting from the sudden economic measures. After the Ministry of Economy allowed the pricing of commodities in dollars, it was the turn of raising the customs dollar from 15 thousand Lebanese pounds to 45 thousand pounds at once, and then the decision of the Governor of the “Banque du Liban” Riad Salameh to raise a dollar. An exchange platform” to 70 thousand Lebanese pounds, and announcing its intervention as a buyer and seller of green currency according to the new price, all of which raised fears of market chaos and high prices, leading to the inability of individuals to secure their basic needs.
The new confrontation
Day after day, the impact of the dollar on the lives and livelihood of the Lebanese is increasing, as the various activities are heading towards “comprehensive dollarization” (the adoption of dealings in dollars), and with the shift to pricing goods in dollars in the supermarket, the citizen has become in confrontation with the cashier’s employee in stores to determine the price of items. Some institutions have installed a “scanner” that shows commodity prices instead of final pricing.
Yesterday night, Wednesday, the price of the parallel market dollar fell by 12,000 pounds within hours. After it touched 92,000 Lebanese pounds during the day, it decreased in the evening, following the “Banque du Liban” circular, to 79,000 pounds, which led to quarrels in some stores, and one of the citizens recounts, “ I entered the supermarket to buy some basic commodities, and asked about payment in dollars, and I was told that the institution continues to collect prices in the national currency exclusively.” He added, “Then I asked him about the approved dollar for pricing, so he confirmed that the approved dollar is the price at the beginning of the day, i.e. 90,000 pounds for Collecting the price of the goods”, which caused opposition from some customers because the pricing did not coincide with the decline in the value of the dollar.
On the other hand, another citizen, Youssef, describes the situation of the Lebanese who has become a prisoner of the “gang” of private electricity generators, medicine and fuel. Finally, the danger has reached a livelihood by linking the fate of food commodities and bread to the dollar, fearing that he will reach the stage of “starvation.” One of the women says, “We no longer have the ability to secure basic needs, so we are forced to choose between medicine, infant formula, or food.”
On a tour of some stores today, Thursday, citizens did not feel the decline in the prices of commodities inside the stores, unlike what happened with fuel and gas, while mobile phone users were shocked by the large increase in prepaid lines because it is moving according to an upward path in parallel with the increase in the price of the dollar as a “banking platform.” To 70 thousand Lebanese pounds, which formed one of the provisions of the decision issued yesterday by Salameh.
The Ministry of Economy is moving
For its part, the Ministry of Economy believes that the pricing decision in dollars will reduce the possibilities of price manipulation and will facilitate monitoring and control. The Director General of the Ministry of Economy, Muhammad Bu Haidar, confirmed that “the approved price of the dollar is the free market dollar, which necessitates putting it on a visible screen so that the citizen understands what the pricing criterion is.” He also pointed out that “when the dollar suddenly falls, it must be accompanied by a fall in commodity prices.”
Bu Haidar specified the penalties for institutions violating the regulations, so that the violation will be referred to the judiciary, calling on citizens to inform the Ministry of Economy to deter violations, and he also warned shops against “the practice of fraud described” because he will submit notifications of their right to be held accountable.
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Surprise customs dollar
At the beginning of last February, the Lebanese Ministry of Finance set the customs dollar at 15,000 pounds, before suddenly raising it to 45,000 pounds at the beginning of March. The head of the Syndicate of Foodstuff Importers in Lebanon, Hani Bohsali, described the decision as “a surprise, which we considered at first glance to be misleading news.” However, “I believe that it will have a limited effect on the foods covered by the exemptions, and the state may have issued it without prior notification to prevent excessive importation of electronic devices and cars.”
Bohsali reassured the limited impact of raising the customs dollar on basic food commodities, pointing out that “the customs duty must be reduced on a large part of the imported items for which there is no local alternative.” He gave some examples, “such as kashkaval cheese, or canned vegetables and fruits,” and talked about the disproportionateness of customs duties. At a time when the import fee for caviar was set at 5 percent, the fee for canned corn was set at 35 percent, which applies to mushrooms and frozen peas.
Bohsali asserted that “45,000 Lebanese pounds is not a final ceiling for the customs dollar, which may follow an upward path to equal an exchange dollar in order to secure revenues for the state.” tax, which constitutes the gateway to solving the problems we live in and secures stable revenues,” adding, “Without these steps, the measures taken will not help, rather these increases will encourage the parallel economy and smuggling.”
Hosali welcomed the pricing step in dollars inside the supermarket, considering that “this mechanism requires some time to overcome its drawbacks and possible pitfalls,” calling “not to judge the owners of the establishments and accuse them of bad faith, as we are in a transitional phase that may include some impurities that must be overcome to be in the interest of consumer”.
Bohsali opposed spreading a negative atmosphere among the people, reassuring that “commodities will be available in the market during the fasting seasons, as well as during the next month of Ramadan, in the last week of March.” He pointed out that “at the present time we are in a balanced situation, and it will continue as long as we are able to secure the dollar and there is no fear for food security, and we do not know what the future will be like.”
The International Support Group warns
In parallel with the internal warnings, the position of the International Support Group for Lebanon, which includes the United Nations, the European Union, the League of Arab States and more than six countries, including the United States and France, emerged, as it affirmed that the ongoing presidential vacuum in the country is a matter of great concern in light of the paralysis affecting all state institutions. And also after the local operation lost more than 98 percent of its value since 2019.
The group also indicated that Lebanon “has not yet concluded a financial program with the International Monetary Fund” and called for the expedited adoption of the necessary laws to restore confidence in the banking sector and unify the exchange rate. It also noted with “concern” the lack of progress in the investigation related to the “horrific explosion in the port of Beirut which took place on August 4, 2020.