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In an interview with CNN’s Becky Anderson, Lebanon’s Minister of Economy and Trade Amin Salam said that the country is struggling to find new markets that meet its bread qualifications due to the war in Ukraine.
“We have been in touch with a number of countries, including the US, France, India, Kazakhstan … because we really need small quantities in Lebanon given the size of the population,” he says. Salam told CNN that Lebanon is looking for support from these wheat producers as it struggles with challenges related to the economy and low purchasing power.
“Lebanon has not recovered yet from the global inflation on food and commodities after Covid-19, now we have this issue that adds another layer of difficulty at a time where Lebanon is struggling with the economy," Salam says.
He tells CNN that an International Monetary Fund negotiating delegation is currently in Lebanon in extensive meetings to reach an agreement for an economic rescue deal. “We know that our national reserves are at a very difficult place, but we are very confident that the IMF agreement will help Lebanon get out of the crisis," he says.
Salam denied that Lebanon’s Central Bank is bankrupt but said it is at a stage where it is looking at the national reserves directly impacting all depositors. “That it is why it is very important to put IMF together now to avoid getting into this difficult spot,” he says.
FULL TRANSCRIPT:
BECKY ANDERSON, CNN: So the shortage in food and fertilizer you are basically left with nothing. For a region already imploding under economic hardship The Middle East is extremely vulnerable, particularly right now during the month of Ramadan for the millions of Muslims breaking their fast this year. The cost of their meals will be significantly higher than it was just a few weeks ago. One country expected to be hit particularly hard in this crisis is Lebanon. I'm joined now by Amin Salam, Lebanon's Minister of Economy and Trade. And like much of the Middle East, North Africa, yours is a country heavily reliant on imports for its basic needs, including food. How concerned are you about the impact of this war and its consequences for Lebanon at this point?
AMIN SALAM, LEBANESE MINISTER OF ECONOMY AND TRADE: Hello, Becky, for sure, Lebanon, due to all the reports that came out, most recently is the most vulnerable state in the MENA - region. Lebanon due to many different factors is being impacted negatively very much by this crisis first of all, because Lebanon lost its national reserves after the Beirut blast that were positioned in the port of Beirut. So this created an additional layer of challenge to Lebanon because so far we've been using the private sectors silos to store wheat, Lebanon imports, about 80 percent of its wheat from Russia and Ukraine. And we've been struggling most recently looking for new markets that have the qualifications that the wheat that is used in Lebanon to produce bread and other products that are sister products of Arabic bread. In addition to the wheat, we're having challenges that we're concerned about more after two months from today that includes sunflower oil, and sugar.
ANDERSON: We're talking about food prices already up somewhat 600 percent since the crisis started 2019, 2020 and now this; you say that you are looking for alternative sources. And I know that is a story that I am hearing across this region of the Middle East, - and North Africa. Who are you talking to? And how are you trying to mitigate this?
SALAM: Well, we've been in talks with a number of countries, including the United States, including in France, in the Kazakhstan. Some of the major players in the wheat industry and food products, because we really need small quantities in Lebanon, given the size of the population. We use no more than 650,000 tons a year compared to sister countries like Egypt that use this quantity on a monthly basis. This is our annual need. So we're hoping that those countries will be able to support us with the supply chain to keep the flow of this commodity to Lebanon because it is very challenging on the pricing side, Becky, because Lebanon in addition to the crisis itself, has not recovered yet from all the inflation, the global inflation on food, commodities and food products after COVID-19. Now we have this issue that adds another layer of difficulty at a time where Lebanon is struggling with the economy. Purchasing power is very low, and many other challenges including the big number of refugees per capita that we have in Lebanon, that adds another layer of challenge. So we've been receiving some positive feedback from all those countries. And we're working on a major program with the World Bank that should see the light in the next few weeks.
ANDERSON: We had Salam has denied reports that Lebanon central bank run by him for the last 30 years is bankrupt. Is it? And what are you doing as far as the IMF support is concerned? I know that you've, you've been putting a plan in place, and the country desperately needs that international support. Are you getting it?
SALAM: I could, I could assure you Becky, that up till today, even though the war between Russia and Ukraine has been sending indirectly, messages to Lebanon, that you trade now is a priority for the international community. But we still feel, and we are confident that the international community is still very supportive of Lebanon does not want Lebanon to fall apart this past two weeks, including this week. We've had extensive meetings with the IMF, the negotiating delegation is still in Beirut, we are concluding our meetings with them on Thursday. So far, everything is moving very positively, we're hoping to have very, very soon a staffing agreement in place, which puts the train on the tracks. And that helps us to move towards a final agreement, despite all what you mentioned, about the negative messages that have been going out in the media about the central bank, the economy and et cetera, et cetera. But we know the challenges are there. We know that our national reserves are at a very difficult place. But we are very confident that those solutions the IMF agreement will help Lebanon get out of its crisis.
ANDERSON: Right.
SALAM: The biggest challenge we have is timing. And we're hoping to keep that under control.
ANDERSON: I have to ask you, and I need a yes or no. Is the central bank bankrupt or not? Yes or no?
SALAM: No, no, the central bank is not bankrupt. But the central bank is at the stage now, where he's looking at the national reserves that directly impact all the depositors. And now we're very concerned how we will manage working with that. That is why it's important for us and very important to put the IMF together now to avoid getting into this difficult spot.
ANDERSON: Got it. Sir, thanks for joining us. We wish you the - we wish in the Lebanese people, the best of course. Yemen is another nation struggling from food insecurity after the conflict. They're left millions on the brink of starvation. But there are signs of a reprieve. Now, thanks to a let up in that nation's long civil war. Yemen's warring parties signed a two month truce on Friday marking a significant step towards ending the country's conflict or at least that is the hope. The internationally recognized government supported by Saudi led military alliance and the Iran aligned Houthi militia have been locked in a violent power struggle since 2015. The U.N. is welcoming the truth which can be renewed past the two month period; it's still unclear how those troops will practically translate on the ground.
