Beirut Port blast damage estimated $2.5 billion: World Bank

MENA

Published: 2020-12-05 19:17

Last Updated: 2021-12-04 14:45


Photo: France24
Photo: France24

Lebanon needs more than $2.5 billion to overcome the repercussions of the horrific Beirut port explosion, according to what the World Bank, United Nations and the European Union announced Friday during their launch of an 18-month reform, recovery and reconstruction framework.

The three donors, which held a press conference at the United Nations headquarters in Beirut, coinciding with the four month anniversary of the explosion, said that "The cost of the course of reform and reconstruction in this context is estimated at two billion dollars."

The explosion in the Port Aug. 4 killed more than 200 people and injured more than 6,500 others. It severely damaged the port and several neighborhoods of the capital, displacing tens of thousands of families from their homes that were damaged or destroyed.

The explosion was caused by huge quantities of ammonium nitrate stored carelessly at the port for years. Of yet, no official has been charged. 

The 18-month framework follows two parallel tracks, the first centering on social and economic recovery "that meets the urgent needs of the most vulnerable population and small enterprises affected by the explosion."

The second track relates to reform and reconstruction, and focuses on "basic reforms to meet the challenges of governance and recovery in Lebanon, which are preconditions for mobilizing international support for reconstruction beyond the recovery track."

Among the "fundamental reforms," it called for "achieving progress with the International Monetary Fund on the path to macroeconomic stability, debt and financial sector restructuring, central bank forensic accounting work, reform of the banking sector, imposing controls on capital movement and unifying exchange rates."

It warned that "international support for the reconstruction priorities identified in this framework will depend on the government's ability to achieve credible progress in reforms."

Since last year, Lebanon has witnessed an unprecedented economic collapse, which coincided with the deterioration of the value of the local currency, the dwindling of foreign currency reserves in the Central Bank, a rise in poverty rates, and mass unemployment. The outbreak of the COVID-19 pandemic, followed by the explosion of the port, exacerbated the situation.

Tuesday, the World Bank suggested that the real GDP growth rate declined sharply by 19.2 percent in 2020, after shrinking by 6.7 percent in 2019. He said that the collapse of the currency led to "inflation rates that exceeded 100 percent."