Lebanese fear economic chaos

Special Lebanese fear economic chaos
Lebanese students dance the traditional dabke during a demonstration in Beirut’s downtown district on Saturday, as protesters keep up their three-week-long movement against a political class regarded as incompetent and corrupt. (AFP)
Updated 10 November 2019

Lebanese fear economic chaos

Lebanese fear economic chaos
  • Banks witness pressure from depositors to withdraw funds for commercial purposes both in dollars or Lebanese pounds

BEIRUT: Lebanese worries rose on Saturday as economic chaos began to seep into the country’s life cycle.

The dollar crisis is resurfacing. Lebanese banks closed on Saturday and will  be closed next Monday for the Prophet’s birthday.

Over the past two days, the banks witnessed pressure from depositors to withdraw funds for commercial purposes both in dollars or Lebanese pounds, but the banks were reluctant to pay them on the pretext of lack of liquidity. Social media reported many arguments between bank employees and customers.
The financial situation was the focus of a meeting between caretaker Prime Minister Saad Hariri and Lebanese Central Bank Governor Riad Salameh on Friday night. It was also the focus of a meeting between President Michel Aoun and Governor Salameh on Saturday, Chairman of the Association of Banks Salim Sfeir and members of the board of directors of the association.
According to information distributed after the Hariri-Salameh meeting, Governor Salameh refuted with figures and facts the temporary measures taken by the banks “to protect the depositors and their money and maintain the stability of the lira’s fixed exchange rate (1,507 against the dollar) with the support of the great potential possessed by the Banque du Liban.” He stressed the necessity of accelerating the formation of a government that “rebuilds confidence and contributes to the restoration of things to the right level to relieve monetary and banking pressures.”
Salameh described what has been happening as “a state of confusion resulting from the loss of confidence and fears of the development of political matters to the extent of unrest.”
Sfeir assured the Lebanese that “things are under control and there is no need for fear or concern for the citizens on their deposits and their money. Despite precautionary measures that protect their deposits and protect the Lebanese pound, banks continue to serve their clients.”

FASTFACT

The financial situation was the focus of a meeting between caretaker Prime Minister Saad Hariri and Lebanese Central Bank Governor Riad Salameh on Friday night.

Fady Gemayel, president of the Association of Lebanese Industrialists, met with Governor Salameh and complained to him about “the suspension of facilities, stopping transfers and the scarcity in hard currency, which does not allow the provision of basic raw materials necessary for the industry.” After the meeting, Gemayel said: “This puts the industrialists on the brink of collapse for reasons unrelated to them, and this collapse will first affect the banks.”
However, the reassurances did not alleviate the confusion and concern of the Lebanese. Protests were held in Tripoli in front of money exchange bureaus, which closed their doors. Money exchange bureaus in Lebanon are pricing the dollar differently from the official dollar pricing. The dollar reached 2,000 Lebanese pounds on the black market because of low volumes.
Many fuel stations in Beirut and the region were closed due to the lack of stock, while other stations rationed the distribution of fuel. Fadi Abu Shakra, the representative of the companies and distributors of fuel, said the reason for this was that “the owners of the stations are struggling to get the dollars to buy fuel and that the stations are currently closing one by one because of running out of stock.”

Things are under control and there is no need for fear or concern for the citizens on their deposits and their money.

Salim Sfeir, Chairman of the Association of Banks

Two laboratories that produce vaccines told hospitals on Saturday that any hospital that was late in paying the laboratories would not get vaccines until it paid in cash, Al Markazia news agency (CNA) said.
The Order of Nurses in Lebanon warned that “some hospitals have begun procedures to affect the salaries of nurses, on the grounds that hospitals did not receive their dues from the state treasury and guarantors, and the Order will be forced to take ominous escalatory measures because the nursing sector can no longer tolerate more prejudice.”
The street protests remained unchanged on the 24th day of the civil movement. The protest groups targeted the Foreign Ministry because “the ministry is not a public facility to serve the minister and his group,” amid heavy security deployment.
The political discussions on the issue of scheduling binding parliamentary consultations to appoint a new prime minister did not make any progress due to the preconditions for forming a government.
Asked whether the street protests are in a dilemma because economic concerns have overridden the anger of young protesters, Dr. Kholoud Kassem, a political sociologist, told Arab News: “We must not forget that what moved people on the street was the economic situation and people were not thinking about politics. People just want to live. The street uprising may have taken a second facet that is related to politics. But people are not taking into consideration the specificity of the Lebanese structure.”
Dr. Kassem added: “After this time, the revolution must monitor the daily reality and how it should move accordingly. What is happening now in the country puts the revolution in a dilemma if it is not directed by people who are known for their competence and lack of political affiliation. People need to be realistic. The structure in Lebanon that people want to change is not just ministers, deputies and presidents. It is a complex system in the Lebanese structure.”
Dr. Qassem stressed that “the revolution has attained an achievement represented by monitoring and accountability. This was not available before, but there is an urgent need now for competent figures who follow this monitoring and follow-up what people have achieved.”