The current central bank’s subsidies program (CBSP), which claims to protect poverty-stricken citizens, accelerates the devaluation of the Lebanese pound, increases prices of unsubsidized goods, leads to the shortages of subsidized items, and impoverishes the poor. The amount spent on the program is about 74 trillion Lebanese pounds (LBP) annually, which is more than three times what the Lebanese government spends in a year, and yet has failed to curb the social impact of the crisis. Several stakeholders, including the Diab government, suggested reforming the CBSP to reduce the cost and redirect the money to target groups using cash transfers (reloadable debit cards). Although a step in the right direction, such a reform would:

1. Maintain subsidies on some commodities, which would keep them in shortage.
2. Lack the proper funding and are contingent to the use of the remaining central bank’s foreign exchange reserves, thus deepening the financial crisis and fueling inflation.
3. Present the risk of handing over cash transfers based on clientelism and turning the program into a vote-buying scheme.