Bank raids return as Lebanese confront economic crisis

Bank raids return as Lebanese confront economic crisis
Two attempted bank holdups and a sit-in protest on Wednesday highlighted the growing desperation of Lebanese people grappling with the country’s worsening economic crisis. (Reuters/File)
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Updated 23 November 2022

Bank raids return as Lebanese confront economic crisis

Bank raids return as Lebanese confront economic crisis
  • 3 incidents in single day raise fears of growing unrest
  • Lebanon is in the grip of what the World Bank believes could rank among the top three financial crises in modern history

BEIRUT: Two attempted bank holdups and a sit-in protest on Wednesday highlighted the growing desperation of Lebanese people grappling with the country’s worsening economic crisis.
Bank raids by depositors demanding their money have been relatively infrequent during the past two months, but a string of incidents in recent days has again raised fears of growing unrest.
In the third action against a bank in a single day, Amina Mohammad broke into a branch of the Intercontinental Bank of Lebanon in Tripoli demanding access to her savings to pay for an operation for her elderly mother.
The bank was forced to close its doors while staff negotiated with Mohammad and her mother.
Earlier, a former soldier, Rida Rida, stormed into a branch of Bank Audi in Tyre, southern Lebanon, demanding his $15,000 deposit to pay for cancer treatment for his mother.
Patrols from army intelligence and the security were sent to the bank while Rida outlined his demands to the bank’s manager.
In the first incident of the day, Anis Tannous staged a sit-in outside the Societe Generale de Banque au Liban branch in Amioun, northern Lebanon, stopping people from entering or leaving the bank.
Tannous demanded the bank transfer his son’s university tuition fee to the US.
Two days ago, another depositor, Hussein Ramadan, and his mother stormed into the Al-Baraka Bank in Hamra, Beirut, in a bid to reclaim $132,000 in savings. After hours of negotiations, the bank agreed to pay the pair $15,000.
The dismissal of employees has taken a tragic turn, too, with one man attempting to commit suicide using a military weapon in front of his former workplace in Jnah in Beirut’s southern suburbs. Security forces arrived immediately and detained the man.
Lebanon is in the grip of what the World Bank believes could rank among the top three financial crises in modern history.
Meanwhile, caretaker Finance Minister Youssef Khalil said on Wednesday that his ministry will start calculating foreign exchange rates for taxes and fees collected by the customs department on imported goods based on the exchange rate of 15,000 Lebanese pounds to the dollar as of Dec. 1, a few weeks before the start of the holiday season.
The measure will “help limit the exploitation of price differences, and reduce the distortions and losses incurred by the treasury,” he said.
Observers believe that traders anticipated this measure by storing hundreds of tons of goods imported under exchange rate in place before the onset of Lebanon’s economic woes.
The rate at that time was 1,500 Lebanese pounds to the dollar.
Imports in the first seven months of this year alone totalled $10.5 billion, while total imports for the year are expected to reach $18 billion — a record approaching pre-crisis levels.
Last year import activity totalled $13.6 billion, a surprising figure in a country facing collapse and a high poverty rate, and begging the International Monetary Fund for $3 billion.
Lebanese are convinced that the government, particularly the Ministry of Economy and Trade, is unable to control the price of goods after the application of the customs dollar to duties and taxes, resulting in exploitation by traders.
Revenues of goods, for which duties and taxes are paid by consumers, will go into traders’ pockets rather than the treasury, many say.
Riad Salameh, the central bank governor, said on Monday that the bank will adopt an exchange rate of 15,000 Lebanese pounds to the dollar from Feb. 1 as part of a process to unify the country’s multiple exchange-rate system.
Commenting on whether the measure will lead to an increase or decrease in the exchange rate, Salameh said: “This will be determined by the market according to supply and demand, but the central bank will be on the lookout.”
MP Michel Daher said that “strict measures should be taken to absorb the excess liquidity that may be caused by the decision to increase the exchange rate.”
He warned “the exchange rate will skyrocket to over LBP 75,000 if it is accompanied by an ongoing presidential vacuum.”
According to bank data, Lebanese withdrew about $70 billion, mostly from small and medium-sized accounts, between 2019 and 2021.


Carrier Emirates test flies Boeing 777 on sustainable fuel

Carrier Emirates test flies Boeing 777 on sustainable fuel
Updated 31 January 2023

Carrier Emirates test flies Boeing 777 on sustainable fuel

Carrier Emirates test flies Boeing 777 on sustainable fuel
  • Airplane and engine manufacturers have been designing more-efficient models, in part to help keep down costs of jet fuel — one of the biggest expenses airlines face

DUBAI: Long-haul carrier Emirates successfully flew a Boeing 777 on a test flight Monday with one of its two engines entirely powered by so-called sustainable aviation fuel. This comes as carriers worldwide try to lessen their carbon footprint.
Flight 2646 flew for just under an hour over the coastline of the United Arab Emirates, after taking off from Dubai International Airport, the world’s busiest for international travel, and heading out into the Arabian Gulf before circling to land. The second of the plane’s General Electric Co. engines ran on conventional jet fuel for safety.
“This flight is a milestone moment for Emirates and a positive step for our industry as we work collectively to address one of our biggest challenges — reducing our carbon footprint,” Adel Al-Redha, Emirates’ chief operation officer, said in a statement.
Emirates, a state-owned airline under Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum, described the sustainable fuel as a blend “that mirrored the qualities of jet fuel.” It included fuel from Neste, a Finnish firm, and Virent, a Madison, Wisconsin-based company.
Virent describes itself as using plant-based sugars to make the compounds needed for sustainable jet fuel, while Neste’s fuel comes from vegetable oils and animal fats. Those fuels reduce the release of heat-trapping carbon dioxide typically burned off by engines in flight.

An Emirates Boeing 777-300ER is filled with sustainable aviation fuel in preparation for a milestone demonstration flight on Jan. 30, 2023 at Dubai airport. (AFP)

Aviation releases only one-sixth the amount of carbon dioxide produced by cars and trucks, according to World Resources Institute, a nonprofit research group based in Washington. However, airplanes are used by far fewer people per day — meaning aviation is a higher per-capita source of greenhouse-gas emissions.
Airplane and engine manufacturers have been designing more-efficient models, in part to help keep down costs of jet fuel — one of the biggest expenses airlines face. Emirates, for instance, used over 5.7 million tons of jet fuel last year alone, costing it $3.7 billion out of its $17 billion in annual expenses.
But analysts suggest sustainable fuels can be three times or more the cost of jet fuel, likely putting ticket prices even higher as aviation restarts following the lockdowns during the coronavirus pandemic.
It wasn’t immediately clear how much the fuel used in the Emirates’ test on Monday cost per barrel. Jet fuel cost on average $146 a barrel at the end of last week, according to S&P Global Platts.
The UAE, a major oil producer and OPEC member, is to host the next United Nations climate negotiations, or COP28, beginning in November. Already, the seven sheikhdom federation has been criticized for nominating the CEO of Abu Dhabi’s state oil company to lead the UN negotiations known as the Conference of the Parties — where COP gets its name.
 


Tunisia president blames hatred of parliament for low turnout in elections

Tunisia president blames hatred of parliament for low turnout in elections
Updated 31 January 2023

Tunisia president blames hatred of parliament for low turnout in elections

Tunisia president blames hatred of parliament for low turnout in elections
  • The electoral commission announced that only 11.4 percent of the electorate had voted on Sunday in parliamentary runoffs

TUNIS: Tunisia’s president on Monday blamed ultra-low turnout for parliamentary elections on hatred among voters of the parliament, not to a decline in his own popularity.
The electoral commission announced that only 11.4 percent of the electorate had voted on Sunday in parliamentary runoffs. Critics of President Kais Saied said the empty polling stations were evidence of public disdain for his agenda and seizure of powers.
Opposition parties called Saied to resign after what they called a “huge failure,” saying early parliamentary and presidential elections were the only route out of the crisis.
Saied rejected accusations, calling his critics “traitors.”
“90 percent did not vote. ... This confirms that Tunisians no longer trust this institution. ... During the past decade, Parliament has been an institution of absurdity and a state within the state.,” Saied said.
“Our popularity is greater than theirs,” he added during a meeting with prime minister Najla Bouden.
Saied closed parliament with tanks in 2021, dismissed the government and started ruling by decree, a move the opposition called a coup.
He accused lawmakers of accepting huge sums of money in return for passing laws.
The newly configured parliament has had its role shrunk as part of a political system Saied introduced last year.
Many Tunisians appeared initially to welcome Saied’s seizure of powers two years ago, after years of weak governing coalitions seemed unable to revive a moribund economy, improve public services or reduce stark inequalities.
But Saied has voiced no clear economic agenda except to rail against corruption and unnamed speculators, whom he has blamed for rising prices.
Unlike the previous parliament, the new one elected on Sunday will have limited powers. The formation and dismissal of governments will be in the hands of the president.
Over the past decade, parliament has been powerful and has appointed and dismissed governments. Despite the political tensions that took place in the previous parliament since the revolution, it had the ability even to dismiss the president and hold all officials accountable.


Cost of living crisis cuts a cruel swathe through Arab political economies

Cost of living crisis cuts a cruel swathe through Arab political economies
Updated 31 January 2023

Cost of living crisis cuts a cruel swathe through Arab political economies

Cost of living crisis cuts a cruel swathe through Arab political economies
  • The middle classes of Middle East and North African countries are now feeling the impact of soaring costs
  • They have suffered triple blow of pandemic, rising food and fuel prices, and Russia’s invasion of Ukraine

DUBAI: With economies in crisis, currencies under pressure and inflation sapping purchasing power, it has long been clear that the poor of the Arab region are suffering. But as even the middle classes in some countries begin to feel the pinch as well, more families are struggling just to put food on the table.

“It’s like we were hit by an earthquake; suddenly you have to let go of everything,” Manar, a 38-year-old Egyptian mother of two, told the news agency Agence France-Presse.

“Now, whatever semi-human life people had has been reduced to thinking about how much bread and eggs cost.”

Bread prices have shot up in some Arab countries as a result of the war in Ukraine. (AFP)

The Egyptian pound has lost half its value against the dollar since March last year, following a devaluation that was demanded as part of a $3 billion International Monetary Fund loan agreement. Official annual headline inflation in the country hit 21.9 percent in December and food prices have soared by 37.9 percent.

The Egyptian economy had been struggling to recover in the wake of the COVID-19 pandemic. But it was Russia’s invasion of Ukraine that sparked the latest crisis, as both of those countries are key exporters of wheat to Egypt and sources of mass tourism.

According to the World Bank, nearly a third of Egypt’s population of 104 million people currently live below the poverty line, and almost as many are “vulnerable to falling into poverty.”

Meanwhile, gloomy economic forecasts are already casting a pall over 2023, with economists predicting a deepening global recession that will bring with it further depreciation of currencies, skyrocketing prices, and rising rates of unemployment and poverty.

In the past year there have been multiple setbacks for the world economy. Nations and businesses that were just beginning to recover from the lockdowns, restrictions and other effects of the COVID-19 pandemic suffered a fresh blow with the start of the war in Ukraine almost a year ago.

The conflict has disrupted global supply chains, causing the price of food and fuel to rise sharply, contributing to inflationary pressures. This has placed additional strain on national currencies and business confidence, endangering jobs and hobbling growth.

The depreciation of Arab currencies against the dollar is a particular concern for the most vulnerable nations because households that had built up savings prior to the economic downturn have seen the value of their financial reserves plummet and safety nets cut from beneath them.

A Lebanese activist displays mock banknotes called “Lollars” during a stunt to denounce the high-level corruption that wrecked the country in Beirut on May 13, 2022. (AFP)

The Lebanese pound recently hit another all-time low and has now lost about 95 percent of its value since the start of the financial crisis in the country in late 2019.

Jordan, Syria and Iraq are likewise experiencing massive rises in the costs of food, fuel and other essentials items while public purchasing power continues to fall, leading to protests and occasional waves of violent unrest.

The lives of about 130 million people in the region are now blighted by poverty, according to the Survey of Economic and Social Developments in the Arab Region, which was published in December by the UN Economic and Social Commission for Western Asia.

INNUMBERS

130 million - People in the Arab region affected by poverty.

12% - Unemployment rate in Arab region (highest in the world).

36% - Proportion of the Arab population in poverty by 2024. *

* excluding Libya and GCC countries

(Source: UN ESCWA)

It found that, excluding Libya and the Gulf Cooperation Council countries, more than a third of the region’s population, 35.3 percent, is now living in poverty. This rate is expected to increase over the next two years, reaching 36 percent by 2024.

The survey also revealed that the Arab region had the highest unemployment rate in the world in 2022, 12 percent, reflecting widespread economic stagnation, pressures on businesses, and the effects of government austerity measures.

The effects of inflation have not been uniformly felt across the region, however. According to Ahmed Moummi, the lead author of the survey report, it is likely that GCC countries and other oil-exporting nations will continue to benefit from higher energy prices, while oil-importing countries will experience several socioeconomic challenges.

“The current situation presents an opportunity for oil-exporting Arab countries to diversify their economies away from the energy sector by accumulating reserves and investing in projects that generate inclusive growth and sustainable development,” Moummi said.

Saudi Arabia is expected to be the fastest-growing economy in the G20 group of developed nations this year. Meanwhile, Lebanon’s economy contracted last year amid political paralysis and delays in implementing a recovery plan.

Tunisians take to the streets on January 14, 2019 to complain about the high cost of living. (AFP)

Economists said the recent effects of inflation have had disproportionately harsh effects on Arab countries that are dependent on imports of food and other essential commodities. The Arab world was already among the world’s most food-insecure regions, and in the past year the number of hungry households has increased.

Before the war in Ukraine began, Russia was the world’s biggest exporter of wheat and Ukraine the fifth-biggest, accounting for about 20 percent and 10 percent of global exports respectively, according to the Organization for Economic Cooperation and Development. Between them they were also key exporters of other important products.

The blockade of Ukraine’s Black Sea ports last year therefore resulted in massive spikes in the market prices of grain, cooking oil and fertilizers. This caused the price of staple goods such as bread to soar throughout the Arab region.

Russia's invasion of Ukraine last year disrupted the country's grain exports, jacking up food prices worldwide. (AFP)

Although a UN-brokered deal last summer summer allowed Black Sea grain shipments to resume, easing fears of a supply-side shortage, Western sanctions on Russian goods, including hydrocarbon products, raised the price of fuel and, in turn, the cost of importing and exporting.

“Food security has been jeopardized in several countries, especially those witnessing conflicts and unrest (whether political or economic), as the food basket is becoming more and more unaffordable,” Majed Skaini, regional manager of the International Comparison Program at UN ESCWA, told Arab News.

Meanwhile, because of the added pressures on governments and businesses, wages have failed to keep pace with the rising cost of living, leading to a decline in living standards in many countries and mounting levels of public anger.

People in the Arab region are “probably more adversely affected by the rising cost of living for two reasons,” An Hodgson, the global head of consumer research at Euromonitor, told Arab News.

“Firstly, consumers in the region have a relatively low savings ratio, which means that they don’t have much of a financial cushion to help them weather the cost-of-living crisis.

“In 2022, the savings ratio in the Middle East and North Africa stood at 10 percent of disposable income, below the global average of 17.6 percent. In comparison, the savings ratio in Asia Pacific was 26.7 percent of disposable income during the same year.”

The second reason is the high reliance in the region on food imports.

“In 2021 (the latest year for which Euromonitor has data), imports of foodstuffs in the Middle East and North Africa averaged $105 per capita, compared with $44 per capita in Asia Pacific and $67 per capita in Latin America,” said Hodgson.

“This means that consumers in the region are more vulnerable to soaring food prices as a result of global supply-chain and food-production disruptions.”

The mounting cost of living is putting particular pressure on the middle classes, who tend to make up the biggest and most economically active group in societies.

“We see middle classes all over the world struggling to maintain their socioeconomic status, as well as their standard of living, in the context of weak income growth, soaring inflation and the cost-of-living crisis,” said Hodgson.

“As a matter of fact, the middle class in developed countries, especially in Western Europe, have never recovered from the financial squeeze they experienced during the 2008-2009 global financial crisis.”

This squeeze has resulted in a widespread shift in consumer habits, including a fall in conspicuous consumption, more cautious spending and general belt-tightening.

According to Euromonitor’s latest findings on global consumer trends, the vast majority of households will focus on saving over the course of the coming year. Its research found that about 75 percent of consumers did not plan to increase overall spending, and 43 percent had reduced their energy consumption.

A recent survey by the World Economic Forum found 92 percent of respondents said people in their countries are “adjusting their budgets to pay for food, some even going without.”

The report added: “When asked how rising prices had impacted consumers, 68 percent said household debt had increased and 59 percent that access to healthcare had been affected.”

Many believe 2023 will be another tough year for parts of the Arab region, which will experience a further widening of the gap between the wealthier oil economies and the more unstable, import-intensive nations of the Levant and North Africa.

In Egypt, the new reality is driving families that were once considered part of the middle class to seek help. Ahmed Hesham of the Abwab El-Kheir charity said a growing number of middle-class Egyptians have been seeking assistance.

“A lot of people had life savings they were keeping aside … Now they’re using them for healthcare or daily costs,” he told AFP.

“They used to make a good living. Now they can’t make ends meet. They’ve never been in this position before and they’re mortified to come to us.

“One man told us he can either feed his kids or put them through school but not both.”

 


Palestinian legal center files objection to plans to build US embassy in Jerusalem on illegally confiscated land

Palestinian legal center files objection to plans to build US embassy in Jerusalem on illegally confiscated land
Updated 30 January 2023

Palestinian legal center files objection to plans to build US embassy in Jerusalem on illegally confiscated land

Palestinian legal center files objection to plans to build US embassy in Jerusalem on illegally confiscated land
  • Action filed on behalf of 12 descendants of the original owners of the site
  • Scheme would amount to ‘full-throated endorsement’ of Israel’s move against private property, says letter

JERUSALEM: The Legal Center for Arab Minority Rights in Israel filed an objection on Monday to plans to build the US embassy in Jerusalem on illegally confiscated Palestinian land.

The objection was filed against the Jerusalem District Planning Committee, the US Secretary of State Antony Blinken, and the US ambassador to Israel on behalf of 12 of the descendants of the original Palestinian owners of the land upon which the State Department is seeking to build.

Four of the descendants are US citizens, three are Jordanians, and five are East Jerusalem residents. 

The original owners’ land was confiscated by Israel under the Israeli Absentees’ Property Law of 1950.

Records discovered in the Israel State Archives show that the land was owned by Palestinian families and leased temporarily to British mandate authorities prior to the establishment of Israel in 1948, Wafa News Agency reported.

The objection was sent with a letter which said that in the event of the US proceeding with the plan, it would be “a full-throated endorsement” of Israel’s illegal confiscation of private Palestinian property.

It also said it would make the US State Department an active participant in violating the rights of its own citizens.

State Department officials recently claimed that no decision on moving forward with the construction plan had yet been made, and that the US was still deciding whether to pursue an alternative site.

Suhad Bishara, legal director at Adalah, has argued that confiscating the land on which the US compound is to be built would violate international law, specifically article 46 of The Hague Regulations on land warfare. The regulations enshrine the need to respect private property rights and expressly prohibit confiscation of private property.

Adalah has said that the Israeli Absentees’ Property Law is one of the most arbitrary, broad, discriminatory, and draconian laws enacted in Israel.

It has also argued that moving the embassy to Jerusalem, regardless of where it is or will be located, disregards international consensus on the city’s special status and signals support for Israel’s illegal annexation.


‘Silence is unacceptable’ in response to victims of atrocities, UN experts tell Libyan authorities

Mohammad Auajjar, chairperson of the UN’s Independent Fact-Finding Mission on Libya
Mohammad Auajjar, chairperson of the UN’s Independent Fact-Finding Mission on Libya
Updated 31 January 2023

‘Silence is unacceptable’ in response to victims of atrocities, UN experts tell Libyan authorities

Mohammad Auajjar, chairperson of the UN’s Independent Fact-Finding Mission on Libya
  • The Human Rights Council urged officials to ensure justice prevails for the many victims of human rights abuses and compensation is provided for their families
  • Members of a fact-finding mission to the country lamented the denial of access to the key city of Sebha in the south, and to prisons and detention centers across the country

NEW YORK CITY: The UN Human Rights Council on Monday called on Libyan authorities to step up their efforts to ensure justice for the large numbers of victims of long-standing human rights violations in the country, and provide compensation for them and their families.

These include cases of torture, arbitrary detention, extrajudicial killings, forced disappearances, human trafficking and internal displacement, along with families who have been denied access to mass graves and morgues containing the remains of relatives.

“Victims and their families are impatient for authorities to provide timely information on investigations and ensure the perpetrators are held accountable,” said Mohammad Auajjar, chairperson of the UN’s Independent Fact-Finding Mission on Libya, which was established by the HRC in June last year to investigate allegations of human rights abuses in the country since 2016.

He was speaking following a visit by his team to the North African country, where they heard testimonies from the relatives of victims. Many of them had traveled from the cities of Benghazi, Sirte, Murzuk, Sabha and Misrata to meet the representatives of the mission.

“The families of these victims have waited far too long for justice,” said Auajjar. “Libyan authorities owe it to them to share information about their loved ones, to meet them and give them answers. Silence is unacceptable.

“We, too, have asked repeatedly for answers to the status of multiple investigations concerning serious human rights violations but to date there has been no satisfactory response.”

Members of the mission were supposed to visit Sebha, the capital of the southern Fezzan region, to meet victims of human rights violations but they were denied access by local authorities. People traffickers have transported huge numbers of migrants from Niger, Chad and Sudan to Europe via Sebha.

The team’s experts also expressed regret that they were unable to meet the attorney general and ask about the testimonies of victims, which he has a mandate to investigate. In addition, Libyan authorities denied the team access to prisons and detention centers across the country.

Chaloka Beyani, an expert in international law, said: “Arbitrary detention in Libya has become pervasive as a tool of political repression and control, which explains why thousands of persons are deprived of their liberty, often in poor conditions, without due process or access to justice.”

Lawyer Tracy Robinson from Jamaica, who is a member of the fact-finding mission, said: “The state authorities we met told us of their efforts to strengthen the rule of law but these efforts have not produced justice for the victims and their families.”

The UN team also called for the immediate release of Iftikhar Boudra, who was detained in Benghazi four years ago after making critical comments on social media about militarization in eastern Libya. She is reportedly critically ill and has been denied visits from her family for months.