The small country of 5 million people and more than a million Syrian refugees is going through an unprecedented economic meltdown that has seen the local currency lose more than 80% of its value against the U.S. dollar in recent months amid soaring prices and popular unrest.
Lebanon, one of the most indebted nations in the world, has asked the International Monetary Fund for a bailout after defaulting on its sovereign debt, but the talks appear to be faltering, with hardly any progress made after more than 15 sessions.
On Monday, the director general of the Finance Ministry resigned from the post he held for 20 years as the crisis worsened.
As prices increased over the past weeks, people have been rushing to supermarkets and groceries to buy goods. On Tuesday afternoon, Al-Makhazen Coop, one of the largest retailers in the country closed its stores in Beirut.
Outside one of the branches in Beirut’s commercial Hamra district, an employee said they were running out of some products and they plan to open again on Wednesday. A statement posted at the gate apologized that some products were not available amid a rush by people to buy stuff.
Economy Minister Raoul Nehme told reporters after a Cabinet meeting that he will issue an order Wednesday to increase the price of 900 grams (32 ounces) of bread, a main staple in Lebanon, by 33% to 2,000 pounds ($25 cents). He urged people not to stock flour at homes saying there is enough stocks in the country.
Owners of bakeries have been complaining that prices of plastic bags, yeast and diesel have been rising urging the government to allow them to raise the price. People had to stand in long lines outside bakeries in recent days amid the rush.
Flour is subsidized in Lebanon and along with medicine and oil products, the central bank has been funding their imports at the official price of the U.S. dollar that stands at 1,507 pounds.
People were also buying candles as the electricity that is usually cut three hours a day in Beirut was cut for much of the day on Tuesday.
On the black-market, the dollar moved closer to 9,000 pounds on Tuesday marking another blow to many Lebanese who have seen their purchase power crash over the past months.
“If I sell I lose and if I don’t I lose as well,” said the owner of a perfume shop in Hamra street who asked that her name not be mentioned. “If I sell products today, I will have to buy them at a much higher price later.”
“I sold nothing today,” said the women standing outside her shop.
In Beirut’s corniche Mazraa avenue and Verdun street, dozens of protesters used giant garbage bins to close the roads to protest the currency crash. Lebanese troops were on alert nearby as thousands of people were stuck in their cars.
On Monday night, a teenager was shot in the head while protesters against electricity cuts closed a road. The 14-year-old boy is in critical condition and the army said it opened an investigation to know who was behind the shooting.
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