The Minister of Economy and Trade, Amin Salam, who is also the Chair of the Ministerial Committee on Food Security, was invited to attend the annual session of the Executive Board of the World Food Program to participate in a high-level panel discussion entitled Implementing the Nexus between Humanitarian Action, Development and Peace.
Participants in the high-level committee included:
– Svenja Schulz, Federal Minister for Economic Cooperation and Development, Germany;
– His Excellency Amin Salam, Minister of Economy and Trade in Lebanon (remotely connected)
– Mr. David Beasley, Executive Director of the United Nations World Food Programme;
Shamim Ahsan, President of the Executive Board of the World Food Program 2022;
– Anne Bate Tvenerim, Minister for International Development of Norway;
– Ms. Valerie Guarnieri, Assistant Executive Director of the United Nations World Food Programme;
– Luanne Magaghi, Minister of Humanitarian Action
disaster management in Niger;
Speech of the Minister of Economy and Trade:
Ladies and gentlemen, honorable audience
Thank you very much for the opportunity you have given me today to share with you the current situation prevailing in Lebanon which is getting worse day by day as you know.
Almost three years have passed since the economic crisis in Lebanon, and the country is still facing the most serious challenges in terms of economic recovery. Real GDP maintains its continuous decline after recording a sudden drop of 30% in 2021 (according to the World Bank report for the year 2022). The sharp decline in economic activity coinciding with the spread of the Corona pandemic and the rise in price inflation has led to an increase in the rate of poverty and unemployment among thousands of Lebanese families. About 82% of the population lives in multidimensional poverty and suffers from a deficiency in at least six dimensions of poverty, namely education, health, public utilities, housing, assets, property, jobs and income (ESCWA 2021). In addition to extreme poverty, the indebted country still grappling with structural macroeconomic imbalances and persistent political instability is dominated by painful memories of the “Great Famine” of 1915-1918. Fears of growing food insecurity are growing on the At the national and sub-national levels, since the main indicators of food security began to take a disturbing trajectory, placing the country among the 20 countries considered hotspots of hunger and ranked first among the countries of the Middle East according to the FAO and the World Food Program (2021).
In addition, the devastating explosion that rocked the port of Beirut on August 4, 2020, caused Lebanon, already exhausted by the torrent of successive crises, to cause a serious humanitarian crisis. The explosion killed more than 200 people, injured more than 6,500 people, and displaced more than 300,000 Lebanese from their homes. In response, the international community immediately rushed to provide humanitarian aid. Therefore, the Reform, Recovery and Reconstruction Framework (known as 3RF) constitutes the first operational plan through which the United Nations is able to implement the relationship between humanitarian action, development and peace. According to the Rapid Damage and Needs Assessment in Beirut carried out in August 2020 with a joint initiative by the World Bank Group in cooperation with the United Nations and the European Union, the damages were estimated between $3.8 and 4.6 billion, while losses ranged between $2.9 and $3.5 billion.
In this context, it should be noted that the main wheat granaries in Lebanon were destroyed by the explosion of the port of Beirut. These silos are made of concrete with a capacity of 125,000 metric tons evenly divided to store wheat and corn (and barley) and are capable of storing emergency wheat for approximately 35 days. The European Bank for Reconstruction and Development also completed a feasibility study for the reconstruction of new mineral silos and storage silos in Tripoli with a total storage capacity of 110,000 metric tons. Multiple storage silos are expected to reduce risks.
Judging by the availability of food, the main indicators are still relatively worrying. The fragility of the situation is cause for concern, especially since Lebanon is a net importer of food commodities, in addition to the scarcity of dollar reserves earmarked for imports. It is worth noting the decline in imports in terms of quantity and diversity (WFP 2021) at a time when the average adequacy of food energy supply has started to show a contractionary trend, although it has been recorded at an acceptable rate so far. The country has begun to suffer from a shortage of wheat and other basic consumer goods at a time when maintaining an adequate stockpile is extremely difficult for several reasons.
First, food consumption is highly dependent on imports, with cereals being the most consumed food category among imports (ESCWA 2016). Wheat and cereals make up about 35 to 39% of daily energy intake, where availability becomes essential for survival. It is customary to provide about 96% of basic grains, especially wheat, either from Russia or from Ukraine (Ministry of Economy and Trade 2022); This thus contributes to price fluctuations. As the Russo-Ukrainian War continues to put pressure on global commodity prices and availability, the latter has become prohibitively expensive and extremely difficult to secure. The ratio of wheat stock to use has become relatively low, and the same applies to the level of strategic reserves, in light of the availability of a small amount of wheat stock that is sufficient to be consumed for one month. In May 2022, the World Bank approved an emergency loan of $150 million to provide food security and finance wheat imports; This loan is awaiting approval by the new parliament, knowing that it is sufficient for a period of 7 to 9 months only.
Second, the monopolistic nature of the Lebanese food import market and the food system, in general, tends to benefit a few actors, thereby increasing their control over prices, the available quantity of supplies and stocks (FAO, European Union, CIRAD); This affects the availability and stability of the food supply.
With regard to local production, farmers, especially the small-scale enterprises that make up the majority of farmers in Lebanon, face difficulties in obtaining agricultural inputs (seeds, fertilizers, insect control medicines and fuel), knowing that most of these inputs are imported and therefore are priced in dollars while most of them are sold. Agricultural products in Lebanese pounds. Thus, the ability of farmers to continue their agricultural business is greatly undermined without forgetting that most farmers lack the liquidity required to purchase these inputs due to the unavailability of traditional seasonal credits to farmers provided by input suppliers (FAO, European Union, French Center for International Cooperation in Agricultural Research for development (CIRAD 2022).
It should be noted that the multilateral sources of funding provided through United Nations programs and bilateral funding provided by embassies of countries to assist small farmers and food producers as well as other private and local initiatives provided by international NGOs and local NGOs activist and even sometimes those provided by ministries. In addition, the past two years have witnessed an increase in the means of remuneration for work, technical training and in-kind assistance. While these programs have been successful in providing short-term assistance and support to the beneficiaries, they have had little success in creating an impact at the macro level.
This is attributed to many reasons, including:
1) the absence of a comprehensive plan to direct and coordinate these activities, as well as create long-term collaborations to consolidate their impact; and 2) the loose field observation process. From the point of view of access to food, the situation is becoming more and more alarming in conjunction with the rise in food prices locally and globally. According to the reports of the Central Statistics Department, the consumer price index increased by 208% in the period from March 2021 to March 2022, while food prices increased by 390.3% in the same time period (Central Statistics Department 2022). These prices are expected to rise further in light of the rapid decline of the local currency and the rise in international oil prices and imported food consumables due to the repercussions of the Russian-Ukrainian war. ESCWA had warned in early 2020 that 50 per cent of the population would be at risk by the end of the year of not being able to obtain basic food needs.
In addition, inflation rates reaching into the hundreds digits have reduced the purchasing power of the consumer. In fact, the minimum expenditure basket cost to survive has risen since October 2019 by 557% (WFP).
Need for immediate action:
The process of deteriorating macroeconomic conditions has steadily and sharply accelerated compared to the slow and inadequate response of successive governments. Given the current circumstances, and in the absence of any comprehensive economic recovery plan, the threat of food insecurity increases in scope and severity. Therefore, the government urgently needs to give priority to addressing the issue of food security and taking immediate measures to fight hunger, as well as establishing a safety net program by developing a comprehensive long-term plan aimed at strengthening all pillars of food security with the support of the international community while giving priority to sustainable solutions such as supporting farmers in their lands Historically known as the “Rome Barns”. I hope that Lebanon will be able to regain its pioneering role in the field of agriculture in the region and enjoy a self-sustaining and sustainable market thanks to the commitment of the government and the support of the international community.