The officials are irresponsible and great damage has been done to the economy...

The officials are irresponsible and great damage has been done to the economy...

| Wednesday 01 March 2023

Omar al-Rassi, “Akhbar al-Yawm” agency

Economic source to "Akhbar Al-Yawm": the government is benefiting from inflation

The dollar is rapidly heading towards the LBP 100 000... It was accompanied by a sudden decision to triple the customs dollar from LBP 15,000 to LBP 45,000, which means, according to an economic source, that "the situation has completely collapsed", and everything the government does is "useless".

The same source explains, via "Akhbar Al-Yawm" agency, that the new customs fee is to put pressure on the government, which needs money to pay its expenses, and it is likely that the US dollar exchange rate will be raised on the Sayrafa platform, which leads to more "profits" for the government. But what was missed by Prime Minister Najib Mikati, finance minister Youssef al-Khalil and all those who were behind the decision, is that this will increase tax evasion, while legitimate exports will decrease.

Pointing out that the government has lost control of the country, the source said: the new customs decision coincides with the dollar pricing specifically in the supermarket -that is, goods that affect people's daily lives- which will lead to great chaos, he added: although food commodities are mostly exempt from customs duties, however, the supermarket will take advantage of the reality to raise its prices unreasonably, it is likely that the Ministry of economy will not be able to control the situation, as everyone knows that "large traders enjoy political protection", pointing out that the lack of the ministry's control bodies is an unconvincing argument, as the registration of proceedings and their strict implementation against one supermarket is an example for others, in the sense that the ministry can constitute a deterrent force at this level.

The source also considered that the pricing in dollars is also greatly exaggerated, and pointed out that there is no competition between supermarkets, but rather "Oligopoly markets", i.e. 5 or 6 merchants control the market and create a kind of illegal agreement (agriculture illicite), adding that the existence of a syndicate of supermarket owners means monopoly in itself.

The source expressed his fear of high inflation, saying: the government may be comfortable with the high inflation rates, as it leads to reducing its debts in Lebanese pounds, but it does not know that any desire or future treatment to reduce inflation will again highlight its public debt, which will be borne by future generations.

The source warned that if the US dollar exchange rate reaches LBP 100 000, it will not be able to decrease later.

He concluded: The officials are irresponsible and great damage has been done to the economy.

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