Experts suggest measures to alleviate pressure of financial crisis on Lebanese citizens

Source: Xinhua| 2020-02-23 19:24:23|Editor: huaxia

by Dana Halawi

BEIRUT, Feb. 23 (Xinhua) -- Local experts suggest a series of measures that can be immediately adopted by the Lebanese government to ease the negative repercussions of the financial crisis on citizens.

Samer Salameh, chairman and CEO of Pacific Future Energy, an oil refinery in Vancouver, told Xinhua that Lebanon must immediately unlock small accounts of depositors and give them the freedom to withdraw their money as a first step.

Salameh said that strict measures such as haircut must be imposed on big depositors who have benefitted from the high interest rates offered by banks in the past couple of years.

Lebanon has been going through a shortage in dollar crisis caused by economic slowdown, the drop in cash injections from Lebanese abroad and transfer by big depositors to foreign countries.

This has prompted banks to impose unofficial capital control on all depositors with people standing in lines for hours at banks to be able to withdraw up to 200 U.S. dollars weekly from their banks accounts.

The past days have witnessed multiple protests by people all over Lebanon against the banking system and its policies.

People have also been protesting against the government's decision to seek the intervention of the International Monetary Fund to decide if it has to repay 1.2 billion U.S. dollars of maturing Eurobonds due on March 9 or it can avoid this heavy obligation amid serious financial deterioration.

The central bank has been repaying the finance ministry's Eurobonds for years because of the high budget deficit registered every year in the state's budget.

"It is not the duty of the central bank to repay for the Eurobonds but only to manage the banking system. The repayment of Eurobonds is the duty of the finance ministry," Salameh said while adding that the central bank must use this money to ease the burden on small depositors.

For his part, Mike Azar, senior financial advisor, told Xinhua that the first thing that the government can do is allowing people who have dollar accounts to withdraw them at 2,000 Lebanese pounds per one U.S. dollar instead of the official rate of 1,515.

"This would allow people to withdraw their dollar money in Lebanese currency at a rate higher than the official rate of the bank to avoid incurring big losses," Azar explained.

Another step that must be adopted by the cabinet, according to Azar, is to start with serious reforms in a bid to be able to approach donor countries to ask them for financial support which would help the country in creating a social safety net for education, medical care, unemployment insurance and other essentials.