Even before the explosion, Lebanon was facing its worst political and economic crisis in decades
LEBANON • The blast that devastated parts of Beirut this month caused between US$3.8 billion and US$4.6 billion (RM19.32 billion) in physical damage and the country will need international aid and private investment to recover, according to an initial assessment led by the World Bank.
More than 180 people were killed and thousands injured when a vast consignment of explosive material detonated at Beirut’s port on Aug 4, ripping through central neighbourhoods as ceilings collapsed and windows shattered.
In addition to the damage caused to homes, hospitals, schools and streets, the blast forced many businesses to close, contributing to a loss of economic activity estimated at between US$2.9 billion and US$3.5 billion. Housing, transport and cultural assets are among the sectors worst affected, the World Bank said following an assessment carried out with the United Nations (UN), European Union (EU) and several Lebanese bodies.
“The disaster will not only exacerbate the contraction in economic activity, but also worsen poverty rates, which were already at 45% of the population just prior to the explosion,” the multilateral lender said in a statement yesterday.
“Implementation of a credible reform agenda will be key to accessing international development assistance and to unlock external and private-sector sources of financing.”
Even before the explosion, Lebanon was facing its worst political and economic crisis in decades, but had struggled to secure international assistance because politicians repeatedly failed to agree on fiscal reforms and anti-corruption measures required by lenders.
The government resigned in the aftermath of the blast and parliamentary deliberations to name a new prime minister began yesterday. Lebanon’s ambassador to Germany, Mustapha Adib, has been widely tipped as front- runner after winning the backing of key political blocs.
Further findings found that the public sector recovery needs for 2020 and 2021 are estimated at US$1.8 billion to US$2.2 billion, with as much as US$760 million needed by December; critical recovery needs over the next three months include US$35 million to US$40 million to meet the basic needs of 90,000 people and create short-term jobs for at least 15,000; immediate housing needs are estimated at between US$30 million and US$35 million; about US$225 million to US$275 million in financial support is needed immediately to restore 5,200 micro firms and 4,800 small businesses that employ thousands of people. Main economic effects of the explosion are losses in economic activity, trade disruptions and losses in fiscal revenues.
Explosion to deepen contraction in economic activity and worsen poverty rate, the report recommends the port is rebuilt in a holistic and modern way. International aid and private investment are essential for meaningful recovery and reconstruction, and the World Bank, UN and EU are “fully committed” to working with Lebanon to help rebuild and put its people’s needs first. — Bloomberg