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Stocks sink, gas and oil prices soar over Ukraine fears

By - Mar 05,2022 - Last updated at Mar 05,2022

This photo shows prices for gas and diesel fuel, over $5 a gallon, at a petrol station in Monterey Park, California, on Friday as energy prices rose in the wake of Russia’s attack of an Ukrainian nuclear power plant (AFP photo)

NEW YORK — Global stock markets fell across the board on Friday and energy prices soared after Russia attacked a major Ukrainian nuclear power plant, the largest in Europe, exacerbated worries about the hit to the continent and its economy.

Europe's main stock markets closed sharply lower, with Paris down five per cent and Frankfurt losing 4.4 per cent.

Earlier, Asian indices had retreated and Wall Street also lost ground to conclude a losing week on a downcast note.

The euro sank close to a two-year low under $1.10 as the Ukraine conflict clouds the eurozone's economic recovery from the coronavirus pandemic.

The greenback benefited from its status as a haven investment.

"Investors have piled out of European stocks this week, accelerating a decline that began at the end of last month, and has accelerated over the last two days," said analyst Michael Hewson at CMC Markets.

"This morning's reckless shelling of a Ukrainian nuclear power plant by Russian forces shows that [President Vladimir] Putin is becoming increasingly desperate to obtain a victory in the face of numerous setbacks," he said.

"These actions are a significant escalation and raise the question as to whether Putin could adopt a scorched earth policy in his attempts to crush Ukrainian resistance," Hewson added.

European and British gas prices surged to record peaks on supply disruption fears as a result of key supplier Russia's ongoing attack on Ukraine.

Oil prices also continued to push higher, with Brent futures ending at $118.11 a barrel, the highest level since 2008.

 

'Markets ill prepared' 

 

Ukrainian President Volodymyr Zelensky has demanded still tougher sanctions against his Moscow foes after Russian forces attacked and seized the Zaporizhzhia nuclear power plant, but Kyiv said no radiation leak was detected.

Western countries have hit Russia's economy hard including by closing airspace, freezing assets and excluding seven banks from the SWIFT interbank messaging network.

The impact is already impeding Moscow's ability to shore up the beleaguered ruble and purchase imports.

On Friday, White House spokeswoman Jen Psaki said US officials were "looking at ways to reduce the import of Russian oil while also making sure that we are maintaining the global supply needs out there".

US employers added 678,000 workers to their payrolls in February, government data showed on Friday, driving the unemployment rate down to 3.8 per cent in a monthly report that was better than expected.

"The market is trying to balance the lousy geopolitical situation with the February employment report, which was pretty strong," said Briefing.com analyst Patrick O'Hare.

"What's principally driving the market is this foreboding sense that things are going to get worse before they get better in Ukraine."

Top oil producers hold course despite Ukraine war

By - Mar 02,2022 - Last updated at Mar 02,2022

Boursa Kuwait Premier Market index broke the 8500 point mark for the first time in its history on Wednesday, supported by the increase in oil prices, as Kuwait's oil price reached $102.31 per barrel (AFP photo)

VIENNA — Saudi Arabia, Russia and other top oil producers on Wednesday agreed to only gradually open the taps, despite Russia's assault on Ukraine sending prices spiralling.

Both WTI crude and Brent broke above $110 a barrel on Wednesday. Brent is at a high last seen in 2014, while WTI is at levels not seen since 2013.

OPEC+ — at monthly back-to-back meetings that lasted less than an hour — decided to stick to a decision from last year for an output target of 400,000 barrels per day for April as well, the group said in a statement.

Analysts had widely expected the 23-member group to stick to its guns. A next meeting will be held on March 31, the group said.

On Sunday, Riyadh, the capital of a leading member state of the Organisation of the Petroleum Exporting Countries (OPEC) confirmed the commitment of the 13-country cartel to the agreement with its 10 partners, led by Moscow, which faces international criticism and sanctions over its invasion of Ukraine.

Saudi Arabia’s Crown Prince Mohammed Bin Salman "affirmed the kingdom's keenness on the stability and balance of oil markets", according to the Saudi Press Agency.

Wednesday's meetings, held via video conference, come a day after International Energy Agency (IEA) countries agreed to release 60 million barrels of oil to stabilise global markets.

The United States will contribute half of the amount, President Joe Biden announced.

But the move has failed to assure markets, and analysts had low expectations that OPEC+ would take any decision to rein in surging prices.

"The war in Ukraine is getting very ugly and destructive and hostilities between the West and Russia are intensifying. High risk for disruptions to both crude and natural gas," Bjarne Schieldrop of Seb said ahead of the meeting.

OPEC+ has so far resisted pressure from major oil consumers, such as the US, to open the taps more as some of its members, including Nigeria and Angola, struggle to meet quotas. 

Between December and January, OPEC members boosted their production by 64,000 barrels per day (bpd), far below their 400,000bpd agreement, according to the organisation's last monthly report.

"The pledge from OPEC+ to increase supply is so far a paper promise... adding to the shortness in the supply market and further stoking the bullish price environment," Louise Dickson of Rystad Energy said.

OPEC, whose secretariat is based in Vienna, had drastically slashed production in 2020 as the COVID-19 pandemic began to spread through the world, pummelling demand and prices.

Wednesday's meeting takes place at a key moment as negotiations to revive the 2015 Iran nuclear deal are widely expected to come to a head in the coming days.

The deal provided sanctions relief for Tehran in return for strict curbs on its nuclear programme but has been disintegrating since former US president Donald Trump withdrew from it in 2018 and reimposed sanctions, including on Iran's oil exports.

If an agreement were to be found and sanctions lifted again, it could unlock the Iranian exports.

China manufacturing activity picks up in February

By - Mar 01,2022 - Last updated at Mar 01,2022

Employees work on an assembly line producing speakers at a factory in Linquan county, Fuyang city, in China's eastern Anhui province on Monday (AFP photo)

BEIJING — Factory activity in China picked up in February, official data showed on Tuesday, as market demand and production resumed following the Lunar New Year holiday.

The Purchasing Managers' Index (PMI) — a key gauge of manufacturing activity — edged up in February to 50.2, defying expectations of a return to contraction territory, data from the National Bureau of Statistics (NBS) showed.

The 50-point mark separates growth from contraction.

"Enterprises resumed work and production in good shape after the holiday," NBS senior statistician Zhao Qinghe said in a statement.

He added that new orders in the world's second-biggest economy picked up, indicating that market demand returned after the holiday break.

The purchasing price index for key raw materials and the ex-factory price index both increased as well, rising "markedly for two consecutive months", Zhao said.

He noted that costs for petrol, coal and other materials continued to be in a "high range".

"Early indicators suggest that conditions improved in February," Julian Evans-Pritchard, senior China economist at Capital Economics, added in a recent report.

"Most localised restrictions on industrial areas and port cities were lifted thanks to fewer [coronavirus] outbreaks this month compared to January."

Pinpoint Asset Management chief economist Zhiwei Zhang added: "These encouraging signs likely reflect the effect of supportive macro policies."

China logged a spike in domestic coronavirus cases in late December and January ahead of the Winter Olympics in Beijing, with authorities scrambling to eradicate flare-ups in several major cities and restrictions such as lockdowns imposed.

Case numbers moderated after that, and non-manufacturing PMI picked up from 51.1 in January to 51.6 in February, NBS data showed.

In particular, activity in the construction sector accelerated.

The service industry's performance, however, still lags behind that of similar periods in earlier years, Zhao said.

"Virus cases dropped back in late January and were relatively low throughout the holiday, but consumers were still very cautious," Evans-Pritchard said.

Egypt's Suez Canal announces hike in passage tolls

By - Mar 01,2022 - Last updated at Mar 01,2022

CAIRO — Egypt's Suez Canal Authority (SCA) announced on Tuesday additional tolls for transiting vessels including fuel tankers, as oil prices soar in the wake of Russia's invasion of Ukraine.

Petroleum gas tankers will see a 10 per cent hike on passage fees while liquefied natural gas carriers and general cargo ships will incur a seven per cent increase, an SCA statement said.

Ships carrying petroleum products will be hit with a 5 per cent rise under the new tolls, which are effective immediately.

A 6 per cent fee hike had already come into effect earlier this year, though cruise ships and liquefied natural gas carriers were exempt.

SCA chief Osama Rabie said the new fees would be evaluated and could be readjusted.

The vital waterway connecting the Mediterranean and the Red Sea provides passage for around 10 per cent of all global maritime trade and is one of Egypt's main sources of foreign currency revenues.

In 2021, some 1.27 billion tons of cargo were shipped through the canal, earning $6.3 billion dollars in transit fees, 13 per cent more than the previous year and the highest figures ever recorded, Rabie said in January.

The conflict in Ukraine has caused a surge in oil prices amid concerns that Russian energy supplies could be curtailed.

Italian FM in Algeria for energy talks

By - Feb 28,2022 - Last updated at Feb 28,2022

MILAN — Italy's foreign minister held talks in Algeria on Monday on increasing gas supplies from the North African country to compensate for a possible drop in Russian supplies over the Ukraine conflict.

Luigi Di Maio tweeted as he arrived that he would "discuss strengthening bilateral cooperation, in particular to address European energy security needs, in the light of the conflict in Ukraine".

Russia last week invaded its pro-Western neighbour, prompting international outrage and causing the United States and its allies to impose sanctions on Moscow.

"Our goal is to protect Italian companies and families from the effects of this terrible war," Di Maio told reporters, without giving any detail on how much extra gas Algeria might provide.

Italy imports around 95 per cent of the gas it uses, and around 45 per cent of that comes from Russia.

During his visit Di Maio met Algerian President Abdelmadjid Tebboune, the foreign and energy ministers and Toufik Hakkar, the head of Algerian state energy giant Sonatrach.

Sonatrach said on Sunday it was ready to increase gas supplies to Europe, notably via the Transmed pipeline linking Algeria to Italy.

Sonatrach is "a reliable gas supplier for the European market and is willing to support its long-term partners in the event of difficult situations", Hakkar was quoted as saying in the daily Liberte.

He added that Europe is the "natural market of choice" for Algerian gas, which accounts for about 11 per cent of Europe's gas imports.

Di Maio was accompanied by a delegation that included Claudio Descalzi, head of Italian energy giant Eni, which is a partner of Sonatrach in Algeria.

Italian Prime Minister Mario Draghi has called for Italy to move quickly to diversify its sources of energy to reduce its dependence on Russian gas.

Di Maio confirmed on Monday that Italy was "committed to increasing energy supplies, notably in gas, from various international partners" — including Algeria, which he said had "always been a reliable supplier".

Draghi said that supplies could also be increased from Azerbaijan, Tunisia and Libya.

UK to freeze all Russian banks' assets, bars ships

By - Feb 28,2022 - Last updated at Feb 28,2022

LONDON — The UK on Monday said it would freeze the assets of all Russian banks over the invasion of Ukraine, tightening the international economic stranglehold on Moscow over its "unjustified aggression".

Foreign Secretary Liz Truss said the UK wants "a situation where they [Russia] can't access their funds, their trade can't flow, their ships can't dock and their planes can't land".

More than 50 per cent of Russian trade is denominated in dollars or sterling and the new powers "will damage Russia's ability to trade with the world", she told parliament.

At the same time, British Transport Secretary Grant Shapps ordered all UK seaports to turn away Russian vessels, having already barred Russian aircraft, including oligarch jets.

Britain last weekend joined the United States and Western allies in preventing the Russian central bank's ability to use reserves to support the plummeting ruble.

And it also cut selected banks from the SWIFT international money transfer system, which Truss said was only the first step in a "total SWIFT ban".

As Truss spoke in parliament, the Treasury announced asset freezes on Russia's state development bank VEB, and commercial lenders Otkritie and Sovcombank, with the rest of the freeze to come into effect "in days", Truss said.

The sanctions add to those announced last week on a series of Russian banks, businesses, billionaires, President Vladimir Putin himself and his Foreign Minister Sergei Lavrov.

Three million businesses 

The assets freeze on Russian banks will stop the Kremlin from raising debt in the UK and will prevent more than 3 million businesses from accessing UK capital markets, Truss said, also promising a ban on "high-end technological equipment such as micro-electronics, marine and navigation equipment".

"This will blunt Russia's military industrial capabilities and act as a drag on Russia's economy for years to come," she said.

UK broadcasting regulator Ofcom meanwhile said it had opened 15 new investigations into the "due impartiality" of state-funded Russian broadcaster RT since the invasion of Ukraine.

London has long been accused of turning a blind eye to illicit Russian money, but Truss promised new measures would target oligarchs' "houses, their yachts and every aspect of their lives".

"I say to our Ukrainian friends, we are with you. In Britain and around the world we're prepared to suffer economic sacrifices to support you however long it takes," she added.

"We will not rest until Ukraine sovereignty is restored."

London's tough talk was blamed by the Kremlin for provoking Putin into raising the readiness level of Russia's nuclear forces — a claim dismissed by UK officials as risible.

British Prime Minister Boris Johnson's spokesman was forced to backtrack after telling a daily briefing that the swingeing set of sanctions imposed by Britain, Europe and the United States was intended "to bring down the Putin regime".

Downing Street said that he had misspoken, and the spokesman clarified that he was talking about "how we stop Russia seeking to subjugate a democratic country".

Moving and courageous 

In his latest call with Ukraine's President Volodymyr Zelensky on Sunday evening, Johnson praised the "heroic" resistance of Ukrainians, according to Downing Street.

Johnson was to visit Poland and Estonia on Tuesday, two NATO allies bordering Russia where Britain has been stepping up military support.

The prime minister released a further £40 million ($54 million) in humanitarian aid for Ukraine, after giving an emotional address at London's Ukrainian Catholic cathedral on Sunday.

"Never in all my study, my memory of politics and international affairs, have I seen so clear a distinction between right and wrong, between good and evil, between light and dark," he told the congregation.

The cathedral's Bishop Kenneth Nowakowski said that he had been blessing Ukrainian men and women who were en route to defend their homeland.

"People have come and told us they're returning back to Ukraine to fight and wanting us to pray for them and give them our blessings," he told journalists.

"It's very touching, very moving and very courageous," he said on Monday.

European subsidiary of Russia's Sberbank 'failing or likely to fail' — ECB

By - Feb 28,2022 - Last updated at Feb 28,2022

People work at one of the Lebanese capital Beirut's public libraries, in the Bachoura neighbourhood, on February 11 (AFP photo)

FRANKFURT — The European subsidiary of Russia's state-owned Sberbank is facing bankruptcy, the European Central Bank (ECB) said on Monday, in the wake of sanctions aimed at punishing Moscow for its invasion of Ukraine.

Sberbank is one of Russia's largest banks.

Austrian bank Sberbank Europe AG and its subsidiaries in Croatia and Slovenia have "experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions", the ECB said.

As a result, the bank is "likely to be unable to pay its debts or other liabilities as they fall due", the ECB said.

"The ECB has assessed that Sberbank Europe AG and its two subsidiaries in the banking union, Sberbank d.d. in Croatia and Sberbank banka d.d. in Slovenia, are failing or likely to fail owing to a deterioration of their liquidity situation," the ECB said.

The two largest Russian banks, Sberbank and VTB, were targeted last Thursday by tough US sanctions aimed at limiting their ability to conduct business internationally.

The sanctions were stepped up over the weekend with the announcement that selected banks would be expelled from the international SWIFT payment system.

As customers rushed to withdraw their money from Sberbank Europe AG, "this led to a deterioration of its liquidity position", the ECB said.

"There are no available measures with a realistic chance of restoring this position at group level and in each of its subsidiaries within the banking union."

Austria's financial market regulator FMA has imposed a "moratorium" on Sberbank Europe AG, blocking it from carrying out any "withdrawal, transfer or other transaction" until at least March 2.

Under EU legislation, retail depositors are protected up to 100,000 euros ($112,000) per depositor per bank.

The CEO of Sberbank Europe AG, Sonja Sarkozi, said she was "in close contact with the competent regulatory authorities" to seek a solution to "an unprecedented situation".

The bank's Slovenian subsidiary said it had "recorded a substantial outflow of funds in a very short space of time" and had "decided to keep its agencies shut for the next two days".

Withdrawals and payments were being limited to 400 euros per day, it added.

The Czech National Bank said it was revoking the banking licence of Sberbank CZ, a.s. following "a deterioration of the bank's liquidity situation in the context of a significant outflow of deposits".

"In this context, the CNB has issued a preliminary measure preventing the bank from disposing of assets and liabilities, including the provision of new loans and accepting deposits," it added in a statement.

Sberbank Europe AG is 100 per cent owned by the bank's Russian parent company, which has 800,000 customers, employs 3,900 people and has assets worth 13 billion euros.

Sberbank Europe AG also has subsidiaries in Bosnia and Herzegovina, the Czech Republic, Hungary and Serbia, which do not come under the jurisdiction of the ECB.

The ECB said it has "coordinated with national competent authorities" in those countries.

Google 'pauses' Russian state media monetisation

By - Feb 28,2022 - Last updated at Feb 28,2022

WASHINGTON — Google on Saturday became the latest US tech giant to prevent Russian state media from earning money on its platforms in response to Moscow's invasion of Ukraine.

It follows similar moves by its YouTube subsidiary and Facebook.

"In response to the war in Ukraine, we are pausing Google monetisation of Russian state-funded media across our platforms," a Google spokesperson said in a statement.

"We're actively monitoring new developments and will take further steps if necessary."

The move was revealed hours after YouTube announced it would block certain Russian media channels from monetising their videos, among other restrictions.

"In light of extraordinary circumstances in Ukraine, we're taking a number of actions," a YouTube spokesperson said in a statement.

"Our teams have started to pause the ability for certain channels to monetise on YouTube, including RT's YouTube channels globally," the spokesperson said, referring to the Russian state-funded news outlet.

YouTube channels earn money through ads that appear when users watch their videos.

On Friday, Facebook also said it was banning Russian state media from running ads and monetising through its platform.

Nations around the globe issued broad sanctions against Russian businesses, banks and officials after Moscow invaded Ukraine on Thursday.

"As always, our teams are continuing to monitor closely for new developments, including evaluating what any new sanctions and export controls may mean for YouTube," the platform's spokesperson said.

In addition to restricting monetisation, YouTube added it would limit recommendations to the same channels and is "continuing to actively surface authoritative news content" in Russia- and Ukraine-related search results.

Videos from RT and a number of other channels will also be "restricted" by YouTube, the company said.

At the beginning of February, Germany banned RT, which prompted Russia to close the Moscow bureau of German media outlet Deutsche Welle.

RT, created in 2005 under the name "Russia Today", is regularly accused by Western authorities of contributing to disinformation.

YouTube noted that over the past few days it has removed hundreds of channels, including some for "coordinated deceptive practices", the term the company uses for disinformation.

Brazil tourism sector tries to rise from pandemic ashes

Feb 28,2022 - Last updated at Feb 28,2022

Aerial view of the Marques de Sapucai sambadrome at the city centre of Rio de Janeiro, Brazil, on February 24 (AFP photo)

RIO DE JANEIRO — With the glittering parades, towering floats and sultry samba postponed by the omicron variant, Brazil will have a carnival week without much carnival this year — bad news for a tourism industry already battered by the pandemic.

In a world without COVID-19, this would have been the week a deluge of tourists — more than 2.1 million in 2020 — descended on Rio de Janeiro for a free-for-all of street parties and spectacular, all-night parades.

Instead, industry experts predict Rio and other tourist destinations to be relatively low-key, with a smaller number of visitors — mainly Brazilians travelling domestically.

That is adding to the agony of a tourism industry only just starting to recover from near-collapse in 2020.

"It's been very traumatic," said Alexandre Sampaio, head of hotel and restaurant federation FBHA, citing official figures showing the tourism industry's revenues plunged 35 per cent in 2020.

The industry rebounded only partially in 2021, growing around 20 per cent.

Carnival week will still have concerts, parties and balls in Rio — limited to 70 per cent capacity, with vaccine and mask requirements.

But Omicron led authorities to cancel carnival street parties for the second straight year, and postpone the famed samba school parade competition until April.

"We'll see some revenues" from the rescheduled parades, "but it won't come anywhere near pre-pandemic levels," said Fabio Bentes, an economist at the National Confederation of Trade in Goods, Services and Tourism (CNC).

Bentes predicts carnival-week revenues one-third below pre-pandemic levels.

His research indicates the tourism industry, which accounted for 7.7 per cent of Brazil's economy before the pandemic — 551.5 billion reais ($110 billion) in direct and indirect revenues in 2019 — has lost $94.1 billion in the past two years, and more than 340,000 jobs.

 

'Call of the journey' 

 

Brazil is a bucket-list destination for many people, with the Amazon rainforest, the Pantanal wetlands, the colourful colonial capital of Salvador, the stunning waterfalls of Iguacu and myriad other must-sees — not to mention Rio and carnival.

But the country has been hit hard by the pandemic, with nearly 650,000 deaths — second only to the United States.

The numbers have improved with more than 70 per cent of the population now fully vaccinated.

But visitors have been slow to return.

Flavio Miranda is waiting for business at the base of Corcovado mountain, where Rio's iconic Christ the Redeemer statue spreads his arms over the city.

Miranda, a 52-year-old driver from a nearby favela, sells tours of the city's attractions.

He spent eight months without work when the pandemic arrived, relying on food handouts to feed his family of four.

Tourists "are returning, but it's slow", he told AFP, saying his income is down about 80 per cent.

"This place used to be bursting with tourists. Now there are hardly any."

Nearby, Miguel Viana, a 27-year-old engineer on vacation from Portugal, was on his way to visit the statue.

"The call of the journey was stronger than the pandemic," he said with a laugh.

But he is among the few. International tourist numbers remain at just five to 7 per cent of pre-pandemic levels, Sampaio estimates.

Local tourism 

Experts say the drop in foreign tourists has been partially offset by more Brazilians travelling domestically, themselves wary of flying overseas.

"We used to mainly travel abroad. But we had been isolated so long, we wanted to start travelling again. So we decided to start with Brazil," said Maria Augusta Rosa, 40, a civil servant from the central city of Goiania vacationing in Rio.

Experts predict a full recovery for Brazil's tourism sector only in 2023 — if there are no more unpleasant surprises in the meantime.

In Manaus, the "capital of the Amazon", Remy Harbonnier, a French tour operator who specialises in rainforest lodges and river cruises, said client and revenue numbers at his company, Heliconia, remain around 80 per cent off pre-pandemic levels.

He hopes to cut that to 50 per cent this year, he says.

But that will depend on events.

"Now we're worried about the situation in Ukraine. It's a bit scary," he said.

"We just try to tell ourselves, we've gotten through two years of COVID, we'll get through an armed conflict in Europe."

By Joshua Howat Berger
Agence France-Presse

Lebanese turn to public libraries to check out of financial crunch

By - Feb 28,2022 - Last updated at Feb 28,2022

By Layal Abou Rahal
Agence France-Presse

BEIRUT — In many countries, public libraries are considered a dying relic amid the shift to digital, but in Lebanon they are getting a new lease of life as its economy flatlines.

Every Friday afternoon, Munira Khalifa takes her son Elia to a public library in Beirut for a weekly storytelling event — one of the last affordable pleasures as a crashing local currency has rendered books something of a luxury.

"We had reached a point where we couldn't find anywhere to take Elia because of the coronavirus pandemic and our difficult financial situation," Khalifa said.

She is just one of hundreds of parents who are hitting the shelves at three public libraries in Beirut in the heat of the unprecedented financial crisis.

The libraries are managed by the Assabil non-governmental group, which was founded in 1997 to promote free access to books and culture.

At one of them in the neighbourhood of Bachoura, the mother and son were the first to arrive ahead of a reading.

The library offered them some relief, Khalifa said, adding: "It is safe, comfortable and close to home."

"Financially, it helps us cut on costs for transportation and new books, which have become more expensive," she told AFP.

Throughout the reading, laughter abounded as a storyteller acted out a book using puppets.

Librarian Samar Choucair said the number of visitors at the facility had increased in the past year, largely since people cannot afford to buy new books.

This is especially the case for children's books, which are mostly produced abroad and tend to be more expensive, she said.

"We keep hearing from parents that this is the spot they choose to take their children... in light of the economic crisis."

'Need to read' 

Sluggish Internet speeds and the absence of credit cards have also hindered the take-up of digital books in Lebanon, where banks have locked people out of their accounts.

Lebanon is facing a financial crisis that the World Bank says is of a scale usually associated with wars, with more than 80 per cent of the population living in poverty.

The local currency has shed more than 90 per cent of its value against the dollar on the black market, causing skyrocketing inflation.

As a result, the cost of printing and buying books has soared, while the monthly minimum wage remains unchanged at 675,000 pounds, the equivalent nowadays of just $32.

While this may have translated into more footfall at libraries, it has eaten into booksellers' profits.

Lana Halabi, who runs a family-owned bookshop in Beirut's Tariq Al Jadideh neighbourhood, said all new books were priced in dollars and therefore hit by the fluctuating exchange rate.

"Book purchases are not a priority" for many Lebanese, the 33-year-old told AFP.

"This has reflected negatively on us and other publishing houses," she added, pointing to a drop in orders at the Halabi bookshop.

But in a public library in Beirut's Geitawi neighbourhood, demand is on the rise, prompting management to add 300 new covers to their collection in the past two months, said librarian Josiane Badra.

"Books have become very expensive and people can't afford them... especially novels that are in great demand in the region, whether in French or in Arabic," she said.

For literature student Aline Daou, the Geitawi public library is an indispensible lifeline.

"As a literature student, I always need to read," the 21-year-old said.

I prefer to borrow novels from here," she added, explaining that it helps her set aside money to buy books not carried by public libraries.

'Breathing room' 

Ali Sabbagh of the Assabil organisation said public libraries offered people "breathing room", but they were beset by challenges.

"We run these libraries in partnership with the Beirut municipality which used to front around 80 per cent of operating costs in Lebanese pounds," he said.

The currency devaluation, according to Sabbagh, has meant the value of municipal funding has plummeted.

"We are trying as much as possible to reach out to donors that can provide us with the necessary support to continue," Sabbagh told AFP.

"Relying solely on public funds during this time has become very difficult."

International donors, meanwhile, tend to focus on humanitarian projects as opposed to cultural spaces, said Sabbagh.

At the Geitawi library, fine arts student Valentina Habis said funding should not overlook culture.

"In the midst of economic collapse, we need cultural spaces... places that develop thought and culture, because culture is the basis of society," she said.

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