More and more families are now worried about feeding their children and finding basic items like diapers and baby formula.
The Lebanese pound (LBP) is effectively worth about six times less than it was a year ago when compared to the U.S. dollar.
A shortage of U.S. dollars means currency is traded on the black market, so even though the official exchange rate is LBP1,500 to one U.S. dollar, many businesses are currently paying LBP9,000.
It’s devastating for an economy that imports so much of what it consumes.
Flour, fuel and medicines now cost much more, even multiples of what they did last year, leading to hunger and regular power cuts.
The government raised the price of a subsidized loaf of bread by 33 per cent last month, triggering a new wave of protests.
WATCH (Feb. 11, 2020): Lebanon protesters clash with security, demand elections ahead of confidence vote
4:14 Lebanon protesters clash with security, demand elections ahead of confidence vote
Lebanon protesters clash with security, demand elections ahead of confidence vote
Prime Minister Hassan Diab has admitted the country risks “a major food crisis.”
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In April, the World Bank estimated the economic crisis could put 45 per cent of the population into poverty, a doubling of poverty levels in Lebanon in less than a decade.
In some parts of the country, the figure is estimated to be well above 50 per cent.
A series of other factors will almost certainly make matters even worse.
Anti-government protesters shout slogans in Beirut, Lebanon, Saturday, June 13, 2020. Lebanese protesters took to the streets in Beirut and other cities in mostly peaceful gatherings against the government, calling for its resignation as the small country sinks deeper into economic distress. (AP Photo/Hassan Ammar).
Perfect storm
The sound of Lebanon’s woes has been largely drowned out as the planet deals with a pandemic.
The country’s crisis was not caused by COVID-19, but the coronavirus that causes it has made a very bad situation even worse, tipping the economy over the edge.
Many businesses that were already struggling to afford imported goods have been forced to close.
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On top of that, the country has been unable to agree on a bailout deal with the International Monetary Fund (IMF).
These enormous loans come with strict austerity conditions that Lebanese politicians know they can’t afford to make.
“If they implemented (them), they would be done for politically,” said Sami Hamdi, a Middle East analyst and editor-in-chief of the International Interest.
“That’s what the IMF is proposing, is saving money, is cuts and the like; that will not please the citizens, even if it saves Lebanon from bankruptcy.”
Negotiations with the IMF have broken down, partly because the two sides can’t agree on the size of the bailout needed.
In fact, the Lebanese negotiation team can’t even agree among themselves.
Two members of the team have quit, apparently due to conflicting pressures from various sectarian elements within the Lebanese government.
“We are doing everything possible to thwart the project, and this is what makes us lose our necessary credibility, whether with or without the fund,” Alain Bifani said after he quit as director general of Lebanon’s Finance Ministry in June.
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“We claim that we are committed to the plan that saves people’s money, but we give in to narrow interests and we do what will lead to waste people’s rights and money.”
WATCH (Jan. 25, 2020): Protesters doused by water cannons in Lebanon as demonstrations continue
2:00 Protesters doused by water cannons in Lebanon as demonstrations continue
Protesters doused by water cannons in Lebanon as demonstrations continue
One of the main reforms protesters have been calling for is an overhaul to the diverse country’s unique form of government.
That compromise helped end the country’s civil war 30 years ago, but critics say a system designed to accentuate religious differences has led to decades of dysfunction and corruption.
Not to mention foreign interference and influence from Iran, Saudi Arabia and the West.
“There is no easy solution to this that does not require turning a blind eye to bolstering elements of Lebanese society that have been part of the problem,” said Hamdi.
“There is no international will at all, from any side, in order to allow the people to manifest their will to overhaul that system. Because that means Lebanon becomes (truly) independent.”
Syria sanctions
Bakery workers package freshly-produced bread coming off a production line at an automated bakery in Lebanon’s capital Beirut on July 1, 2020. (Photo by JOSEPH EID/AFP via Getty Images).
The Caesar Act primarily targets Syrian individuals, including the Assad family, military leaders and business executives.
It also places sanctions against supporters of the Assad regime, in particular the Lebanese militant group Hezbollah.
Political allies of Hezbollah formed part of the Lebanese coalition government formed in January 2020.
The porous border between Lebanon and Syria sees a large amount of official and black market trade.
It remains to be seen whether the Caesar Act will have any real effect on the links between Lebanon and the Assads, but it does seem likely to compound problems in Beirut.
Away from the geopolitics, normal Lebanese people have been forced to improvise just to survive, using the entrepreneurial spirit for which they’re known around the world.
Hassan Hasna set up a Facebook group to allow people to barter unwanted goods for food.
“A Lebanese person would say: ‘Yes, the economic situation is tough and the situation is deteriorating, but it doesn’t mean I want to humiliate myself and beg, I am willing to barter a piece of clothes in exchange for bread,’” said Hasna.
“I am proud of such people; they’re doing the impossible to survive and live with dignity.”
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However, household items, just like dignity, are in finite supply.
OTTAWA – Statistics Canada says retail sales rose 0.4 per cent to $66.6 billion in August, helped by higher new car sales.
The agency says sales were up in four of nine subsectors as sales at motor vehicle and parts dealers rose 3.5 per cent, boosted by a 4.3 per cent increase at new car dealers and a 2.1 per cent gain at used car dealers.
Core retail sales — which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers — fell 0.4 per cent in August.
Sales at food and beverage retailers dropped 1.5 per cent, while furniture, home furnishings, electronics and appliances retailers fell 1.4 per cent.
In volume terms, retail sales increased 0.7 per cent in August.
Looking ahead, Statistics Canada says its advance estimate of retail sales for September points to a gain of 0.4 per cent for the month, though it cautioned the figure would be revised.
This report by The Canadian Press was first published Oct. 25, 2024.
OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.
Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.
The change is scheduled to come into force on Nov. 8.
As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.
The program has also come under fire for allegations of mistreatment of workers.
A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.
In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.
The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.
According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.
The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.
Temporary foreign workers in the agriculture sector are not affected by past rule changes.
This report by The Canadian Press was first published Oct. 21, 2024.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
