Thread by @timourazhari

EXCLUSIVE: #Lebanon banks have swallowed at least $250 million in UN humanitarian aid for Syrian & Palestinian refugees and poor Lebanese since 2019 via bad exchange rates negotiated with UN agencies, a @TRF_Stories investigation finds

news.trust.org/item/202106170…
Thread (1/12)

Most losses stem from a joint WFP/UNHCR/UNICEF program worth $400 million in 2020 for Syrian refugees.

Losses of a third to half were also recorded in:
-WFP assistance for 105,000 poor Lebanese
-UNRWA assistance for Palestinian refugees - even amid a severe funding crisis.

2/12

These massive losses took place at a time when
- Roughly half of Lebanese are poor
- More than 2/3 of Palestinian refugees are poor
- Nine out of 10 Syrian refugees are extremely poor

UN orgs essentially handed banks millions of $ while many people struggled to buy food.

3/12

How did this happen?

As the currency collapsed, banks gave the UN exchange rates worth about 40% of the actual market value of the currency.

This means for every $100 in aid from donors, only about $60 got to beneficiaries

The rest was swallowed up by banks

4/12

The "staggering" scale of losses was laid out in a Feb internal assessment for the UN humanitarian coordinator in #Lebanon:

"Substantial shares of contributions are in effect transferred from the donors (through humanitarian organizations) to the impaired financial sector"

5/12

Three of four UN agencies contacted declined to comment on how massive losses took place for so long, while UNICEF says it was "very concerned" about the issue and had since negotiated a better rate.

Collapsed Lebanese banks allegedly used the $ to recapitalize

6/12

Banks deny that they used aid money to raise capital because "we need billions of dollars and a few millions of dollars of humanitarian aids [sic] ... will not serve the purpose."

They say it was up to donors/the Central Bank to set better rates -- or disburse in dollars

7/12

To stem the losses, donors/analysts/some in the UN have pushed for aid to be paid out directly in dollars

Instead, they have been given better rates in local currency that decrease losses but dont eliminate them

Whenever the Lebanese pound depreciates, money is wasted.

8/12

The losses have a crushing effect on those struggling to survive the crisis

Abu Ahmad Saybaa, a Syrian father of five, says cash assistance used to buy "an acceptable food basket" but now barely pays for cooking oil

"It's weighing on all our health - mental and physical"

9/12

Saybaa runs a Facebook page that sheds light on issues faced by Syrian refugees: m.facebook.com/21862742383679…

In a March post, he noted may were struggling to survive with meager WFP aid and asked: "Where is the difference in the exchange rate going?"

We have an answer.

10/12

Meanwhile, frustration grows among some donors disgusted by losses & fearful of reputational damage for mis-spending taxpayer money

"We need a credible counterpart that's not going to pocket money that we are ultimately accountable for at home," a western diplomat told me

11/12

Bottom line from economist @JadChaaban:

"There must be higher standards. We effectively see the same dynamics as contractors or crony businessmen siphoning off money they received to build... [an] infrastructure project.

Right now, every cent counts for #Lebanon."

12/12