Lebanon’s financial health is worsening. And it is not just because of the coronavirus. Its leaders are reportedly equally responsible for the state of the nation’s economy.

Lebanon’s economy faces an “arduous and prolonged depression,” with real GPD projected to plunge by nearly 20% because its politicians refuse to implement reforms that would speed up the country’s recovery, the World Bank said.

It said Lebanon should quickly form a reform-minded government to urgently carry out the reforms. The crash of the local currency has already led to triple-digit inflation.

Political chaos, the COVID-19 pandemic and a huge explosion at Beirut’s port, which killed nearly 200 people and caused billions of dollars in damage, have all aggravated Lebanon’s woes.

The economic crisis erupted last autumn as capital inflows dried up and protests swept the country. A year on, the currency has crashed and banks are paralysed, with prices and job losses on the rise.

In such circumstances, the move by France and the United Nations to keep providing humanitarian aid to Lebanon holds promise. The two nations however urged the country’s leaders to form a new government as a political deadlock in Beirut has blocked billions of dollars in assistance for the cash-strapped country.

Lebanon’s government resigned days after the Aug.4 blast.

A meeting organised via videoconference by the UN and France was the second since the disastrous Aug. 4 explosion that destroyed Beirut’s port and wrecked large parts of the capital.

French President Emmanuel Macron and UN Secretary-General Antonio Guterres announced the creation of a fund handled by the World Bank, the UN and the European Union to provide support for Lebanon, including food, healthcare, education and the reconstruction of the Port of Beirut.

“We can, together, help the Lebanese people move beyond the emergency phase and onto the path for longer-term recovery and reconstruction,” Guterres said.

The plan also calls for “a targeted set of reforms, which are essential to facilitate recovery and reconstruction,” he added.

Macron said Wednesday’s conference would “make it possible to complete the emergency response and provide an early recovery response.”

The United Nations estimated in May that the proportion of Lebanon’s population living in poverty – or less than $14 per day – had doubled in the last year here to 55%. Within that group, those judged to be in extreme poverty tripled to nearly a quarter of the population.

It predicts more people will sink into poverty, widening one of the region’s biggest wealth gaps. Inflation and the port blast have since left yet more Lebanese vulnerable.

The World Bank report came a day before France and the UN were scheduled to host the new conference about aid to Beirut.

The virus has only deepened their suffering. A suffocating economic crisis has left Lebanon’s poor with little or no means to cope with extra hardship.

The heavily-indebted state, which defaulted in March, is poorly placed to help the poor.

Over the past year, tens of thousands of people have lost their jobs, with many leaving to seek opportunities abroad. The migration of skilled workers from the country of 5 million could further impede any recovery.

International donors have vowed not to give financial aid to Lebanon before major reforms are implemented to fight decades of widespread corruption and mismanagement.

The extent and speed to which aid and investments are mobilised will depend on whether authorities and the parliament can act quickly, the report said.

The move by France and the UN is a welcome initiative. But it remains to be seen whether it is viable.