Lebanese workers strike against lifting of subsidies on goods
The Lebanese General Labor Union has called for a nationwide strike today to protest the government’s decision to weaken subsidies for consumer goods.
With the poverty rate around 75% and 100,000 citizens unemployed in the tourism sector alone, strikes have been among the most recent flare-ups in Lebanon’s financial crisis, which has dragged on for more than a year. The Lebanese pound is down 80% since last year and weakened subsidies combined with inflation are rapidly pricing out large swaths of the country from essential goods such as food and gas.
Expect the government to struggle to combat the sagging economy in the short-term, as revenues have likely dried up due to hardship in obtaining taxable domestic income. Prime Minister-designate Saad Hariri will likely attempt to secure a $10 billion aid package from the IMF. However, foreign aid is dependent on improved banking transparency and effective anti-corruption measures—issues that the Lebanese public views as among the root causes of the country’s economic hardship. However, with talks between the IMF and Lebanese officials stalling, it remains unlikely that Lebanon will receive significant aid in the short-term, signalling the possibility of sustained economic hardship, and thus, political instability, in the country.
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