by Dana Halawi
BEIRUT, Nov. 17 (Xinhua) -- Lebanese economists warned that Lebanon's economy is going onto a dangerous path due to the delay in forming a new government capable of restoring confidence in the country.
Mounir Rached, president of the Lebanese Economic Association, told Xinhua that the current paralysis amid an absence of a government capable of making crucial decisions will cause further economic and financial deterioration.
"There is a paralysis in the government. The 2020 state budget has stopped and officials are incapable of giving people their demands," he said.
Nassib Ghobril, economist and head of the economic research department at Byblos Bank, said that there are pressing economic, financial and social needs to be addressed and further delay in the formation of an effective government will only cause more harm to the country's economy.
Lebanon has been witnessing for the past month nationwide protests against the current political ruling class and its failing policies which led to an economic and financial deterioration in the country.
The protests led to the toppling of Lebanese Prime Minister Saad Hariri's government 12 days after the beginning of the demonstrations.
The protesters vowed not to leave the streets before they see the formation of a government with new figures capable of implementing serious reforms, including the fight against corruption and the recuperation of stolen public funds.
Lebanese President Michel Aoun has so far failed in starting consultations with MPs for the appointment of a new prime minister capable of assuming full responsibilities to save the country from further economic and financial collapse.
The new government will be responsible for restoring the confidence in the country, which has witnessed a drop in cash injections by Lebanese expatriates and the outflow of deposits from Lebanon.
The decline in cash injections and outflow of deposits led to a drop in central bank's foreign currency reserves, which prompted Banque Du Liban to restrict its spending of U.S. dollar currency.
As a result, Lebanese flocked to the banks to withdraw their money and store them in houses out of fear of losing their money since banks hold most of the government's public debt.
Moreover, Standard & Poor's international rating agency Thursday joined Moody's and Fitch in downgrading some Lebanese banks.
Economists emphasized the need for a new government with a clear and proper plan to save Lebanon.
"We do not have the luxury of time," economist Walid Abou Sleiman said, adding that Lebanon has lost 3 billion U.S. dollars during the past month due to the country's paralysis caused by protests and the drop in business activities.
"We need a government that would restore confidence in the country," he said.
Ghobril reiterated Abou Sleiman's comments by saying that Lebanon is currently incurring an opportunity cost.
"The clock is ticking. We do not have more time to waste," he said.
Meanwhile, Rached said that Lebanon needs a government capable of implementing reforms by approving a budget that includes real figures and not fake numbers.
He criticized the economic paper announced by Hariri before his resignation, saying that the paper is vague and it does not properly tackle Lebanon's problems.
"The paper included a plan to reduce budget deficit to 0 percent in 2020 state budget, which is not realistic at all," he said.
Economists also emphasized that banks' closure for a long period is only adding more pressure on the economy.
"Banks' closure is hurting the economy. People need to withdraw money to buy their needs, which would activate the economy a bit, not to forget that people also want to pay school fees for their children," Rached said.
Meanwhile, Layal Mansour, an economist and lecturer at the Lebanese American University, said that banks' closure is freezing all business transactions between suppliers and retailers.
George al-Hajj, president of the Federation of Syndicates of Bank Employees, announced on Saturday that his federation is waiting to be informed about the security measures that will be taken by the interior ministry in cooperation with internal security forces to protect banks in a bid to reopen the banks.