Between a third and half of the U.N. aid sent to Lebanon gets lost to Lebanese banks, a Thomson Reuters Foundation (TRF) investigation has shown.
The total amount of U.N. humanitarian aid lost to banks is at least $250 million, according to a report published by the Foundation on Thursday.
The aid, which targets vulnerable communities in Lebanon, loses a significant chunk of its value to unfavorable USD/LBP exchange rates adopted by banks.
These bank rates have had the biggest impact on poor Lebanese and on Syrian and Palestinian refugees, as they considerably reduce the value of the payouts these people receive, the report indicates.
For instance, refugees and Lebanese living below the poverty line receive $27 on a monthly basis from the World Food Programme, which equated to 40,500 Lebanese pounds before the ongoing crisis.
Now, the sum is being paid out as LBP 100,000 — no more than about $7 at the black-market exchange rate. Also, the exchange rate is unstable and on a gradual rise, which means that the value of these payouts is only expected to plummet further down the road.
An aid official and two diplomats from donor countries confirmed to the TRF that between a third and half of all direct U.N. cash aid in Lebanon has been lost to banks in the conversion process since the crisis started in late 2019.
In 2020, Lebanon received over $1.5 billion in humanitarian aid in total. Up to half of this sum was engulfed by banks used by the U.N. to convert the donations to Lebanese pounds, according to an internal U.N. assessment conducted earlier this year.
By July 2020, a “staggering 50%” of donations were being lost, the assessment, cited by the TRF, said.
This much aid money being absorbed by banks has raised concerns of reputational damage on the part of donor countries. Banks have denied using the conversion cuts to raise capital.
Meanwhile, the Lebanese authorities have yet to enable the dollarization of aid, a measure recommended by donor countries to safeguard the value of contributions against exchange rate fluctuations.
Our team works tirelessly to ensure Lebanese people have a reliable alternative to the politically-backed media outlets with their heavily-funded and dangerous propaganda machines. We've been detained, faced nonstop cyber attacks, censorship, attempted kidnapping, physical intimidation, and frivolous lawsuits draining our resources. Financial support from our readers keeps us fighting on your behalf. If you are financially able, please consider supporting The961's work. Support The961. Make a contribution now.