High hopes as Hariri seeks UAE cash for ailing economy, Emiratis can now travel to Lebanon

Lebanese Prime Minister Saad Hariri attends the UAE-Lebanon Investment Forum in Abu Dhabi, UAE. (Reuters)
Updated 10 October 2019

High hopes as Hariri seeks UAE cash for ailing economy, Emiratis can now travel to Lebanon

  • Abu Dhabi hosting conference where Lebanon seeking partnerships and investments
  • Hariri’s advisers said the mood was “positive” as Emirati citizens now allowed to travel to Lebanon

ABU DHABI: Lebanon hopes the UAE will inject cash into its central bank to help shore up the ailing economy, Prime Minister Saad Al-Hariri said on Monday on a visit to the emirates in which leaders sought a deal behind closed doors.

Abu Dhabi is hosting a conference at which heavily indebted Lebanon is seeking partnerships and investments in food, infrastructure, oil and gas, and renewable energy.

The UAE economy minister said financing for Lebanon would be discussed, while one of Hariri’s advisers said the mood was “positive” — though no formal announcements had been made by late Monday.

However, the UAE announced its citizens would be allowed to travel to Lebanon starting from Tuesday (October 8), according to an Emirates News Agency statement released on Monday.

Faced with one of the world’s highest debt burdens, low growth and crumbling infrastructure, Hariri’s government has vowed to implement long-delayed reforms. It is also seeking to curb a sharp loss of confidence among foreign investors and among depositors who are turning away from the Lebanese pound.

Asked on the conference sidelines whether Lebanon will see a cash injection for its central bank, Prime Minister Saad Al-Hariri told Reuters: “We are working on everything,” adding: “Yes we are hoping, we will work on it.”

Financial markets have tightened significantly this year, raising the costs for Lebanon of borrowing and insuring against default. But hopes for a deal boosted dollar-denominated bonds on Monday, which remain down some 15% this year.

The central bank has been drawing down its foreign exchange reserves to repay the state’s maturing dollar-denominated debt, and said last week it was prepared to do more.

Central bank governor Riad Salameh, also attending the conference, said the bank was continuing to provide dollars to local financial markets, adding that Lebanon has “numerous possibilities” as it looks for assistance but it expects support from the UAE.

Lebanon’s traditionally high reserves of foreign currency have been in decline because capital inflows into its banking system from Lebanese abroad have been slowing.

An adviser to Hariri, Ghattas Khoury, told Reuters the mood at the conference was positive and that there would be a meeting between the Lebanese premier and UAE authorities later on Monday.

Beirut, which has debt-to-GDP ratio, hopes its Gulf allies or regional sovereign wealth funds will offer support but no public pledges have so far been made.

UAE economy minister Sultan bin Saeed Al Mansouri told reporters his government believes Lebanon’s investment climate is becoming more “settled.”

He made no financing commitments, but said any financing would “be discussed with the government and they’ll make the right decision.”

Lebanon is preparing to sell a Eurobond of around $2 billion this month, with cash raised earmarked for refinancing maturing debts and shoring up shaky public finances.

On Oct. 1, Moody’s put Lebanon’s Caa1 credit rating under review for downgrade, saying anticipated external financial assistance had not yet been forthcoming.

Ratings agency Fitch downgraded Lebanon to CCC in August, citing debt servicing concerns.

At the same time, S&P Global affirmed Lebanon at B-/B with a negative outlook, saying it considered foreign exchange reserves sufficient to service government debt in the “near term.”

Iraqi protesters shut roads to ports, oil fields

Updated 46 min 43 sec ago

Iraqi protesters shut roads to ports, oil fields

  • Basra saw protesters block access routes to the ports of Khor Al-Zubair and Umm Qasr, as well as Rumailah oil field

BAGHDAD: Anti-government demonstrators in southern Iraq shut roads to two major ports and a key oil field Wednesday, port officials and AFP correspondents said, leading to a brief operational halt.
Correspondent in oil-rich Basra province saw protesters block access routes to the ports of Khor Al-Zubair and Umm Qasr, as well as Rumailah oil field.
Trucks waiting to load up goods from the ports could be seen waiting empty behind crowds of demonstrators.
Khor Al-Zubair is used for some heavy crude exports but also to import fuel products like benzene, while Umm Qasr is the main entry point for food and medicine into Iraq.
“Export and import activities have stopped because trucks cannot enter Khor Al-Zubair or Umm Qasr ports,” one official at Basra’s port authority said.
A second official later said the route to Khor Al-Zubair had been reopened but Umm Qasr remained shut.
Sit-ins have become a go-to tactic for Iraqis demonstrating against their government since early October.
Protesters have shut the road to Umm Qasr several times, causing a delay in offloading operations that on one occasion forced around a dozen ships to unload their cargo in another country.
Road closures have also impacted heavy crude from the Qayyarah field in northern Iraq from reaching Khor Al-Zubair since earlier this month.
The prime minister’s office has warned security forces “will not allow” protesters near key infrastructure, and riot police have forced roads open in deadly crackdowns.
More than 330 people have been killed since rallies erupted on October 1 in Baghdad and across the south.
In the capital’s main protest camp of Tahrir (Liberation) Square, thousands gathered Wednesday to express their ongoing frustration.
Top leaders and political parties have focused their efforts on hiring drives, more welfare and a new electoral law as immediate measures.
Parliament met late Tuesday to discuss a draft voting law that proposes downsizing the house from 329 seats to 251, shrinking districts and distributing votes according to a complex hybrid system.
But the United Nations mission in Iraq (UNAMI) said the draft law needed more work.
“The draft electoral legislation — currently under review by the Council of Representatives — requires improvements to meet public demands,” it said in an emailed statement on Wednesday.
UNAMI chief Jeanine Hennis-Plasschaert urged lawmakers to pass legislation that “will reflect the public appetite for a new and different way of conducting politics.”
Protesters have so far been unimpressed by the government’s proposals and large crowds — most of them students — turned out on Wednesday.
“Last night’s session serves their own interests, not those of the people,” said Younes, a 28-year-old protester.
Crowds have spilled over from Tahrir onto three main bridges that lead to the western bank of the Tigris, where key government buildings and embassies are based.
On Tuesday night, they tried to cross two of the bridges to reach the so-called Green Zone but security forces deployed on the bridges fired tear gas to keep them back, a security source told AFP.