Smugglers profit from botched Lebanese subsidies

Lebanon expanded its subsidy program last year, even as its hard currency reserves plummeted.

As well as local producers, that was meant to help long-suffering ordinary Lebanese.

But as usual, critics say, they've instead borne the brunt of mismanagement while smugglers profit from the scheme.

Fuel, for example, swallows about half the subsidy bill, or $3 billion.

But the cheap fuel is smuggled into neighboring Syria, where it goes for ten times the price. That leads to severe shortages for Lebanese already grappling with a devastating economic crisis.

Resident Mohamed Maktabi says he's been driving around Beirut for two days.

"Today I have been searching since the morning and my car emptied out completely, there is traffic as you can see, and this is the first one I've found operating."

This livestock trader in the northern city of Tripoli says big dollars can be made by buying animals from abroad with subsidized dollars and smuggling them out again.

A sheep imported from Armenia at $100 a head can sell in the Gulf for over $200.

"The sheep are all getting exported abroad, they are all exported, there is nothing in the local market."

The expanded subsidy list doesn't just include essentials: cocoa powder, cashew nuts and saffron are on it.

Those who most need access to cheap goods can struggle to get them.

Under the rules, subsidized food must go straight from importer to retailer, which cuts out wholesalers who reach small shops and remote areas.

So while expensive French butter goes cheap at upscale Beirut supermarkets, others have to brawl for subsidized cooking oil.

Profiteering means items with Lebanese subsidy stickers have also shown up in Europe and Africa.

Caretaker economy minister Raoul Nehme told Reuters the program was only meant to last a few months when it came in a year ago, and the government had hoped to move quickly to directly subsidizing families with cash.

Money for the subsidies could run out by the end of May, officials say, yet another blow for the more than half of Lebanese who live in poverty.

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