Beirut Blast Caused Up To $4.6b in Physical Damage: World Bank
(Bloomberg) -- The blast that devastated parts of Beirut this month caused between $3.8 billion and $4.6 billion in physical damage and the country will need international aid and private investment to recover, according to an initial assessment led by the World Bank.
More than 180 people were killed and thousands injured when a vast consignment of explosive material detonated at Beirut’s port on Aug. 4, ripping through central neighborhoods as ceilings collapsed and windows shattered.
In addition to the damage caused to homes, hospitals, schools, and streets, the blast forced many businesses to close, contributing to a loss of economic activity estimated at between $2.9 billion and $3.5 billion. Housing, transport and cultural assets are among the sectors worst affected, the World Bank said following an assessment carried out with the UN, EU and several Lebanese bodies.
“The disaster will not only exacerbate the contraction in economic activity, but also worsen poverty rates, which were already at 45 percent of the population just prior to the explosion,” the multilateral lender said in a statement Monday. “Implementation of a credible reform agenda will be key to accessing international development assistance and to unlock external and private sector sources of financing.”
Even before the explosion, Lebanon was facing its worst political and economic crisis in decades but had struggled to secure international assistance because politicians repeatedly failed to agree on fiscal reforms and anti-corruption measures required by lenders.
The government resigned in the aftermath of the blast and parliamentary deliberations to name a new prime minister began Monday. Lebanon’s ambassador to Germany, Mustapha Adib, has been widely tipped as front-runner after winning the backing of key political blocs.
- Public sector recovery needs for 2020 and 2021 are estimated at $1.8 billion to $2.2 billion, with as much as $760 million needed by December
- Critical recovery needs over the next three months include $35 million to $40 million to meet the basic needs of 90,000 people and create short-term jobs for at least 15,000
- Immediate housing needs are estimated at between $30 million and $35 million
- About $225 million to $275 million in financial support is needed immediately to restore 5,200 micro firms and 4,800 small businesses that employ thousands of people
- Main economic effects of the explosion: losses in economic activity, trade disruptions, losses in fiscal revenues
- Explosion to deepen contraction in economic activity and worsen poverty rate
- The report recommends the port is rebuilt in a holistic and modern way
- International aid and private investment is essential for meaningful recovery and reconstruction.
- The World Bank, UN and EU are “fully committed” to working with Lebanon to help rebuild and put its people’s needs first.
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