Delays By Lebanese Central Bank Cause Deficit Of Goods - Foodstuff Importers Syndicate
The deficit of subsidized foodstuffs in Lebanon is attributed to delays by the country's Central Bank in processing subsidy application submitted by merchants, the head of the Lebanese Syndicate of Importers of Foodstuff, Hani Bohsali, told Sputnik
MOSCOW (UrduPoint News / Sputnik - 15th March, 2021) The deficit of subsidized foodstuffs in Lebanon is attributed to delays by the country's Central Bank in processing subsidy application submitted by merchants, the head of the Lebanese Syndicate of Importers of Foodstuff, Hani Bohsali, told Sputnik.
"The problem is that there are prolonged delays with the opening of credits by the Lebanese Central Bank, and this on its own impedes the flow of goods, which would mean a reduction of the subsidies in light of the delays in approving the files," Bohsali commented.
Prompted by social media posts reporting a deficit of subsidized food items amid increases in food prices, the Mediterranean nation witnessed a series of panic-buying sprees in the past weeks, with many leading to physical altercations between citizens as they attempt to secure their necessities.
With the country's Consumer Protection Association attributing the deficit to greed and a monopoly over the most basic commodities, the syndicate of Lebanon's foodstuff importers paint an entirely different picture, claiming that some merchants often have no choice but to withhold subsidized foodstuffs from the market until their subsidy applications are approved by the central bank.
"They will be selling the goods at one-third of their price, while the Central Bank is capable of refusing an application or not paying altogether, so you will have little choice but to store the goods until you get an approval as opposed to selling the goods on the market without guarantees that you will be paid," he added.
Bohsali went on to refute public accusations of monopoly against food importers, arguing that the complexity of the subsidy system often led to confusion and contradiction.
"It doesn't mean that it's not true, but rather that there is an explanation for everything, and what you see in the media and on social media is not the situation as it really is, because many things are happening due to the complexity of the subsidy mechanism, which leads to confusion," Bohsali stated.
Set up in an effort to stabilize food prices as the Mediterranean nation's currency began plummeting in late 2019, the subsidy mechanism provides the importers of a number of essential products with hard-currency at favorable exchange rates.
The depreciation of Lebanon's national currency coupled with the fallout from the COVID-19 pandemic has caused prices to soar by over 70 percent since the onset of the country's economic crisis in late 2019, reigniting civil unrest with protesters taking to the street across the country since the beginning of the month as the local currency plummeted to a record low, having lost more than 85 percent of its value.