The August 4 explosion, which devastated much of the port and beyond, caused property damage in the range of $ 3.8 billion to $ 4.6 billion, while economic losses, resulting from the decline in the production of the various sectors of the economy, represent between 2.9 and 3.5 billion dollars, according to the results of this “rapid assessment of damages and needs” (“Rapid damage and needs assessment”) carried out jointly with the UN and the European Union between August 5 and 31.
The sectors most seriously affected are housing, transport and cultural heritage (including religious and archaeological sites, national monuments, theaters, archives, libraries and other monuments), specifies the World Bank in a statement accompanying its report, published on the eve of French President Emmanuel Macron’s second visit to Lebanon.
The Washington institution has estimated the immediate reconstruction needs (by the end of the year) of 605 to 760 million dollars, and from 1.18 to 1.46 billion dollars for the year 2021. C t is the transport sector most in need of assistance, followed by culture and housing. On a macroeconomic level, the World Bank notes that “the explosion resulted in three major economic effects – the losses of economic activity caused by the destruction of physical capital, the disruption of trade and the loss of budgetary revenues”.
As a result, Lebanon’s gross domestic product is expected to sink an additional 0.4 points in 2020 and 0.6 points next year, according to its forecasts.
Even before the explosion, which destroyed or damaged the homes of some 300,000 people, Lebanon was facing a multifaceted crisis (economic, financial and monetary) which, aggravated by the effects of the Covid-19 pandemic, had already led the World Bank to anticipate a GDP decline of 10.9% in 2020.
But “not only will the disaster exacerbate the contraction of economic activity, but it will also worsen poverty, which already affected 45% of the population just before the explosion”.
If the country, given its “insolvency” and its “lack of foreign exchange reserves”, can only count on “international aid and private investment”, it “must imperatively implement a reform program. credible “in order to” prevent corruption and break the grip of the elite “, judges the economic organization.