Lebanon's Central Bank Governor Riad Salameh welcomed the conditional deal struck with the International Monetary Fund that will extend $3 billion to the country over a four-year period as part of a comprehensive economic reform programme, but he said the country needs five times more for it to come out of its economic crisis.
“The staff agreement with the IMF is an important step towards restoring confidence and reconnecting Lebanon with the international financial markets,” Mr Salameh, 71, told The National.
“Negotiations to solve the issue of default is fundamental, without the IMF on board the negotiations to exit the default situation would be very difficult,” said the governor, who has been at the helm of the central bank since 1993.
Lebanon's economy collapsed after it defaulted on about $31bn of Eurobonds in March 2020, with its currency sinking more than 90 per cent against the dollar on the black market and inflation rising to triple digits.
Lebanese authorities must enact a list of reforms before the IMF's board approves the $3bn facility and a series of other measures once the programme is in place. Those measures include the government's approval of a bank restructuring strategy, reforming the bank secrecy law, and endorsing a medium-term fiscal and debt restructuring strategy.
Once the IMF programme is in place, Lebanon's government will need to make other changes that include a single exchange rate and capital controls, reforming state-owned enterprises, and strengthening governance and fiscal reforms.
On Thursday, Prime Minister Najib Mikati told The National he was optimistic Parliament would endorse the necessary measures to secure the IMF's backing.
Still, "$3bn is not enough but a programme with the IMF might attract donors, the level of comfort is $15bn”, Mr Salameh said when asked if he thought the fund's proposal was enough to lift the country out of its state of paralysis.
Lebanon is saddled with debt, high unemployment, hyperinflation and rising poverty.
The country's economy contracted about 58 per cent between 2019 and 2021, with the gross domestic product plummeting to $21.8bn in 2021 from about $52bn in 2019, the World Bank said. That is the largest contraction on a list of 193 countries.
Its public debt increased to $100bn, or about 212 per cent of GDP, in 2021, giving Lebanon the fourth highest debt-to-GDP ratio in the world, surpassed only by Japan, Sudan and Greece, World Bank figures show.
If Parliament and the government enact the reforms and secure the IMF funding, the country could unlock $11bn in aid that was pledged by international donors at a Paris conference in 2018. Those funds are also conditional on similar reforms prescribed by the IMF.
“The political environment is important for initiating confidence,” Mr Salameh said.
In times of crisis that preceded the collapse of the economy, Lebanon’s economic stability has customarily hinged on the wisdom and foresight of Mr Salameh, who was hailed more than once as central banker of the year globally and regionally.
He protected the economy and its currency during several military conflicts with Israel and shielded its banking system from the 2008-2009 global financial crisis by banning investment in subprime products.
But for distraught citizens, Mr Salameh and the banking industry are viewed as an extension of a political system marred by corruption, greed and nepotism.
To some, Mr Salameh, a 20-year veteran of Merrill Lynch and former private banker to the late Prime Minister Rafik Hariri, is a casualty of Lebanon’s fractious political landscape. Fringe elements of the far left who want to nationalise banks as well as supporters of parties that control the state today see him as an easy target.
“During the period 2010 to 2021, the government used more than $65bn of the central bank, using existing laws and voting other laws,” Mr Salameh said.
“We are going to vote, as per the IMF requirement, a law forbidding the government to borrow from Banque du Liban (BdL) in the future. This will ensure a better future for the currency. It should have been initiated before. BdL should have pushed for that.”
Lebanon's central bank has a stock of gold valued at more than $17bn at current market prices, Mr Salameh said.
“Yes I was used as a scapegoat,” Mr Salameh said when asked if he was being targeted for the economic meltdown of the country. “It was well planned and executed.”
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So what is Spicy Chickenjoy?
Just as McDonald’s has the Big Mac, Jollibee has Spicy Chickenjoy – a piece of fried chicken that’s crispy and spicy on the outside and comes with a side of spaghetti, all covered in tomato sauce and topped with sausage slices and ground beef. It sounds like a recipe that a child would come up with, but perhaps that’s the point – a flavourbomb combination of cheap comfort foods. Chickenjoy is Jollibee’s best-selling product in every country in which it has a presence.
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Getting%20there
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Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
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Available: Now
Sinopharm vaccine explained
The Sinopharm vaccine was created using techniques that have been around for decades.
“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.
"What is left is a skeleton of the virus so it looks like a virus, but it is not live."
This is then injected into the body.
"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.
"You have to be exposed more than one time to what we call the antigen."
The vaccine should offer protection for at least months, but no one knows how long beyond that.
Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.
“Since it is inactivated, it will not last forever," she said.
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
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Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
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UAE currency: the story behind the money in your pockets
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
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Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
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Expert advice
“Join in with a group like Cycle Safe Dubai or TrainYAS, where you’ll meet like-minded people and always have support on hand.”
Stewart Howison, co-founder of Cycle Safe Dubai and owner of Revolution Cycles
“When you sweat a lot, you lose a lot of salt and other electrolytes from your body. If your electrolytes drop enough, you will be at risk of cramping. To prevent salt deficiency, simply add an electrolyte mix to your water.”
Cornelia Gloor, head of RAK Hospital’s Rehabilitation and Physiotherapy Centre
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Chandrashekar Nandi, physiotherapist at Burjeel Hospital in Dubai
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
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Men's football draw
Group A: UAE, Spain, South Africa, Jamaica
Group B: Bangladesh, Serbia, Korea
Group C: Bharat, Denmark, Kenya, USA
Group D: Oman, Austria, Rwanda
The%20specs
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UAE currency: the story behind the money in your pockets
MATCH INFO
Schalke 0
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Bawaal%20
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