by arabnews.com — Najia Houssari — BEIRUT: Lebanon’s public sector and legal system are under growing strain amid widening strike action over the plunging value of salaries in the crisis-hit country. Hundreds of judges continued their strike on Thursday in protest at having their salaries based on exchange rate of 1,507 Lebanese pounds to the dollar. Civil servants have also decided to go on strike again for the same reason, despite being granted monthly aid. Meanwhile, Lebanese university professors are continuing their open-ended strike, while students wait for work to resume so they can take last year’s final exams. Lebanon took preliminary steps to raise the customs dollar rate from 1,507 Lebanese pounds — the rate adopted before the economic crisis hit three years ago — to 20,000 pounds. The move created confusion in markets, adding to the chaos they were already facing.

The customs dollar is the price for calculating the customs value of imports, and is paid in Lebanese pounds. On Thursday, caretaker Prime Minister Najib Mikati sent a letter to Finance Minister Youssef Khalil demanding the customs dollar rate of 20,000 pounds be adopted. Khalil told an expanded ministerial consultative meeting about the move. The ministerial committee enjoys exceptional powers that allow it to adjust the customs dollar rate without the need for Cabinet approval. Amin Salam, the caretaker economy minister, told a press conference on Thursday that the preliminary decision will be the subject of discussions between the finance minister and the central bank governor. Salam said that the impact of the new customs dollar rate on prices of goods would be “insignificant,” adding that the current rate was no longer fair. “We want to adjust the wages and salaries of civil servants,” he said. Salam also voiced fears that traders might store goods to be sold later under the new rate. “We are waiting for traders to provide us with the lists of goods they purchased previously,” the minister said.

Foodstuffs that will be subject to the customs dollar can be substituted by alternative products available in Lebanon, in order to encourage the industrial sector and the Lebanese industry, he said. Salam said that expensive cheese and canned vegetables are among products that will be subject to the customs dollar. He warned traders against pricing old products based on the new customs dollar rate. The customs dollar is one of the main elements feeding the Lebanese treasury, which receives a percentage of the price of imported goods.

MP Ibrahim Kanaan, chair of the parliamentary finance and budget committee, said that he doubted the customs dollar would take into consideration people’s means and needs. “How can we come up with the customs dollar? What are the covered and non-covered goods, and who is going to monitor the prices?” he asked. Four rates are currently adopted in Lebanon by the state and banks, in addition to the black market rate, which reached about 33,000 Lebanese pounds to the dollar on Thursday.

Economic analysts have predicted that the country will witness a new wave of price increases while social security measures are negligible in the face of worsening economic pressures. Observers are worried that this might encourage smugglers crossing Lebanese-Syrian border. Hani Bohsali, head of the Food Importers’ Syndicate, told Arab News: “There are no luxury goods anymore. If we want to speak logically and put things in perspective, the interests of Lebanese come before the traders’ interests.” Bohsali said the customs dollar “will affect oils and canned vegetables, and we are afraid that those demanding a wage increase might request another one after a while.” He added: “We will all pay the price of and be affected by ill-considered decisions. “Do we know what the repercussions of increasing the customs dollar are? Is it really going to profit the state? They calculated it based on how things stand currently, but what if the value of importation dropped by half as a result of the Lebanese low purchasing power.”

MP Ziad Hawat said that increasing the rate without a complete economic plan would not achieve the desired objectives. He called for a consolidation of the exchange rate instead of “stealing people’s deposits.”