One of Lebanon’s most seasoned politicians said on Wednesday the financial meltdown underway in the small but geopolitically pivotal country could lead to an impending “hunger revolt”.
Druze leader Walid Joumblatt cautioned against over blaming the banking system for the crisis, saying the edge Lebanon has had for the last seven decades as an economic and business hub could be eroded for good.
Lebanon’s currency, the lira, began plummeting in October-November last year. The monetary authorities imposed capital controls to try and preserve the dollars left in the banking system as almost three decades of public debt accumulation all but brought the system down.
The lira is trading at 4,250 to the dollar, compared with 1,500 liras to the greenback at the beginning of the crisis.
“The hunger revolt will come and we have no answer,” Mr Joumblatt said.
“It started. Every chief of tribe, every chief of community is trying to satisfy his own people,” Mr Joumblatt told a panel organised by the Beirut Institute via Zoom from Al Mukhtara Palace, his ancestral home in the Chouf Mountains.
The tall, gaunt, Mr Joumblatt is a student of history and a former warlord in the Lebanese fratricide of 1975-1990. He is widely regarded, even by his foes, as an astute reader of regional and international politics.
Although Mr Joumblatt supported the Palestinian cause, he dealt in the 1980s with former Israeli Prime Minister Ariel Sharon when Sharon was an army officer, and later placated Hezbollah, in complex political manoeuvres to shield his small sect from threats he viewed as terminal.
He survived last year an attempt by Hezbollah to shove him off a political scene he has been a player in since Syrian regime agents killed his father, the statesman Kamal Joumblatt in 1977.
Hezbollah’s rough tactics could have led to the possible incarceration of Mr Joumblatt, or dealt him physical harm.
Mr Joumblatt summoned the last drop of his political acumen, and the services of an old friend, Shiite Speaker of Parliament Nabih Berri, who made a rare break with Hezbollah for the sake of Mr Joumblatt.
But Lebanon’s political class mostly coalesced to contain demonstrations that bore out in October last year demanding the downfall of all the actors in charge and end of the system of spoils enshrined in the 1989 Taif Agreement, that contributed to halting the civil war a year later.
A crackdown by the authorities supported by Hezbollah contributed to bringing in a government strongly allied with the Iran-backed Shiite group in January.
Mr Joumblatt described the government’s efforts to seek aid from international financial instructions as “theoretical”.
“The solution is major political and economic reform that is difficult nowadays,” he said.
Using an expletive, Mr Joumblatt dismissed with disdain what he described as unrealistic scenarios marketed by some officials in the Hezbollah-aligned government of its ability to secure a $20 billion rescue package.
The money is supposed to come from the International Monetary Fund, as well as a group of donor countries that pledged $11 billion in aid to Lebanon in Paris in 2018 but did not send any substantial funds because the flows were contingent on reform.
“Now because of the coronavirus you have so many nations pledging for IMF aid and the IMF is putting conditions,” Mr Joumblatt said.
“We have to apply these conditions and reforms. It will take time and time is running out,” he said.
One of the first actions of the new government was to launch an unprecedented attack on the central bank, accusing the governor Riyadh Salameh and the country’s banks of conspiring to empty state coffers.
Mr Salameh responded by saying he has repeatedly warned successive governments that accumulation of the public debt was unsustainable and the central bank did its job by maintaining liquidity.
The banking system has underpinned Lebanon’s economy since the late Lebanese statesman Raymond Edde pioneered its development in the mid 1950s through a law that enshrined banking secrecy, making Lebanon the Middle East’s deposit box.
Mr Joumblatt said tampering with the banks could lead to a deeper economic demise similar to the ruin of Syria’s economy when the Baath Party took power in a coup almost six decades ago.
“You have people inside and outside the government who would like to nationalise the banks, to destroy the banks, like in 1963 when the Baath Party abolished everything,” he said.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
T20 WORLD CUP QUALIFIER
Results
UAE beat Nigeria by five wickets
Hong Kong beat Canada by 32 runs
Friday fixtures
10am, Tolerance Oval, Abu Dhabi – Ireland v Jersey
7.30pm, Zayed Cricket Stadium, Abu Dhabi – Canada v Oman
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
UAE currency: the story behind the money in your pockets
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
Essentials
The flights
Emirates, Etihad and Malaysia Airlines all fly direct from the UAE to Kuala Lumpur and on to Penang from about Dh2,300 return, including taxes.
Where to stay
In Kuala Lumpur, Element is a recently opened, futuristic hotel high up in a Norman Foster-designed skyscraper. Rooms cost from Dh400 per night, including taxes. Hotel Stripes, also in KL, is a great value design hotel, with an infinity rooftop pool. Rooms cost from Dh310, including taxes.
In Penang, Ren i Tang is a boutique b&b in what was once an ancient Chinese Medicine Hall in the centre of Little India. Rooms cost from Dh220, including taxes.
23 Love Lane in Penang is a luxury boutique heritage hotel in a converted mansion, with private tropical gardens. Rooms cost from Dh400, including taxes.
In Langkawi, Temple Tree is a unique architectural villa hotel consisting of antique houses from all across Malaysia. Rooms cost from Dh350, including taxes.
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Abu Dhabi traffic facts
Drivers in Abu Dhabi spend 10 per cent longer in congested conditions than they would on a free-flowing road
The highest volume of traffic on the roads is found between 7am and 8am on a Sunday.
Travelling before 7am on a Sunday could save up to four hours per year on a 30-minute commute.
The day was the least congestion in Abu Dhabi in 2019 was Tuesday, August 13.
The highest levels of traffic were found on Sunday, November 10.
Drivers in Abu Dhabi lost 41 hours spent in traffic jams in rush hour during 2019
THE SPECS
Range Rover Sport Autobiography Dynamic
Engine: 5.0-litre supercharged V8
Transmission: six-speed manual
Power: 518bhp
Torque: 625Nm
Speed: 0-100kmh 5.3 seconds
Price: Dh633,435
On sale: now
Day 2, Abu Dhabi Test: At a glance
Moment of the day Dinesh Chandimal has inherited a challenging job, after being made Sri Lanka’s Test captain. He responded in perfect fashion, with an easy-natured century against Pakistan. He brought up three figures with a majestic cover drive, which he just stood and admired.
Stat of the day – 33 It took 33 balls for Dilruwan Perera to get off the mark. His time on zero was eventful enough. The Sri Lankan No 7 was given out LBW twice, but managed to have both decisions overturned on review. The TV replays showed both times that he had inside edged the ball onto his pad.
The verdict In the two previous times these two sides have met in Abu Dhabi, the Tests have been drawn. The docile nature of proceedings so far makes that the likely outcome again this time, but both sides will be harbouring thoughts that they can force their way into a winning position.
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Company%20profile
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Sweet%20Tooth
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
BIRD%20BOX%20BARCELONA
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About%20My%20Father
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The five pillars of Islam
KILLING OF QASSEM SULEIMANI
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