Lebanon needs political action to avoid economic collapse -finance minister

Finance Minister Ali Hassan Khalil made the remarks following a meeting with the government’s economic and social council. (Reuters)
Updated 12 September 2018
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Lebanon needs political action to avoid economic collapse -finance minister

BEIRUT: Politicians in Lebanon, still lacking a government four months after national elections, need to take action to stop the country’s economic crisis becoming an economic collapse, its finance minister said on Wednesday.
Infighting has hampered efforts by Prime Minister-designate Saad Al-Hariri to form a national unity administration, leaving a political vacuum that has increased concerns for the highly-indebted economy.
“We are not concealing this crisis, but will this crisis inevitably lead us to a collapse? ... I say that with strong political commitment, political will and cooperation between all sectors we can avoid it,” caretaker Finance Minister Ali Hassan Khalil said.
His comments, which followed a meeting with the government’s economic and social council, were televised. Asked by Reuters what he meant by collapse, he replied “the economic situation.”
Leaders from across the political spectrum agree a government urgently needs to be formed, but a deal remains elusive.
Its formation would be likely to help raise investor confidence in the country, unlock billions of dollars in donor funding and enable parliament to embark on long-overdue reforms.
In April, international donors meeting in Paris pledged more than $11 billion of investment, but they want evidence of economic reforms first. At that meeting Hariri promised to reduce the budget deficit as a percentage of GDP by 5 percent over five years.
Lebanon had the world’s third highest debt-to-GDP ratio, at over 150 percent, at the end of 2017. The International Monetary Fund wants to see immediate and substantial fiscal adjustment to improve debt sustainability.
On Wednesday, parliamentary speaker Nabih Berri said Lebanon did not have the luxury of time when it came to forming a government “especially when it comes to the economic situation.”
Central Bank Governor Riad Salameh has said the Lebanese pound, which is pegged to the dollar, will remain stable and that the central bank has high foreign reserves.
He reiterated those comments to broadcaster CNBC on Tuesday.
Lebanon’s foreign assets excluding gold were $43.56 billion at the end of August, according to central bank data.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
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Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.