BEIRUT: Maj. Gen. Abbas Ibrahim, director-general of the Lebanese General Security, who is currently in the US on an official visit, has expressed concerns over “the social situation imploding as a result of the economic situation in Lebanon,” hoping that security would not be affected.
A security source told Arab News: “The situation is very delicate. The prices of goods are doubling, and some merchants are now requesting to be paid in US dollars, as the local currency continues to depreciate uncontrollably. Not everyone has dollar bills. How can people survive? At some point, we are bound to face a dangerous scenario.
“The security services are once again sounding the alarm regarding the miserable social situation of the soldiers. How it is acceptable for on-duty soldiers to only eat grains and canned goods every day?”
On Wednesday, Lebanon’s telecommunications company Ogero doubled and tripled the prices for some of its services. It announced packages intended for students and those with limited income, provided that the price amendments come into effect starting July.
Before going into caretaker mode, the Cabinet held a final session and raised the tariffs of prepaid mobile services.
Caretaker Communications Minister Johnny Korm said: “The decision to increase the tariffs for telecom and Internet services was caused by problems with suppliers and employees. There is no way for any sector to continue working based on the 1,500 LBP/USD rate in these circumstances.
“The sector would have collapsed, so we halved the expenses from $560 million to $255 million, and we also took several steps to reduce the burden. The sector’s income decreased to 22 percent, and we have become one of the cheapest telecom sectors in the world, as the average rate of subscription revenue is $1.88 per month, compared to $11.5 in Jordan, for instance. With the tariff increase, the rate becomes $7, with exceptions for people with limited income, for whom there will be packages of $4.5 and $7, taking into account the people with special needs, security officers and students.
“When we raise the tariff in July, the first bill we collect will be on Aug. 8. I understand and feel the pain of the citizens, but the tariff must be changed.”
In October 2019, the Cabinet headed by former Premier Saad Hariri discussed a proposal to impose a 20-cent fee on voice calls via applications such as WhatsApp, Facebook and FaceTime to avoid the imminent economic collapse after Lebanon’s dollar reserves rapidly decreased.
This proposal was the initial spark that caused one of the largest popular protests in Lebanon when protesters blocked roads with burning tires and tried to storm the headquarters of the government and parliament. The protests spread over two years, as economic conditions worsened.
The government sought to cancel its proposal hours after it was announced, but the collapse occurred. Lebanon was unable to pay its external and internal debts, and the central bank imposed measures on bank transfers. Protesters accused the ruling authorities of corruption, while the enthusiasm of Arab and foreign countries to help Lebanon waned due to the growing influence of Tehran-backed Hezbollah.
Will the worsening economic crisis and increase in telecom and internet fees bring people back to the streets?
Telecom engineer Abbas Qanso, who works with an internet service provider, ruled out the possibility of returning to the streets. “There will be protesters against the price hike, but many will accept it, just as they did with the rise in the prices of fuel, medicine and even bread.”
Official data shows that the unemployment rate in Lebanon increased to 29.6 percent from 11.4 percent in 2018-2019, which indicates that nearly a third of the active labor force was unemployed by January 2022. The percentage of unemployed women reached 32.7 compared to 28.4 for men, while the youth unemployment rate was 47.8 percent, twice the adult rate of 25.6 percent.
Economist Walid Bou Suleiman said: “The Lebanese pound will depreciate even more amid the uncertainty on the political scene.
“Nothing can curb the local currency’s depreciation except a positive shock that comes in the form of a quick formation of the government, but there are no signs of that. It’s a downhill journey from here.
“Since the government entered into caretaker mode, it is no longer entitled to take decisions. A new government needs to be formed as soon as possible, and recovery plans need to be implemented immediately, otherwise an ominous fate awaits Lebanon with the depletion of the central bank’s dollars, which will impede imports.”