Lebanon: Waiting for Another Time Bomb

Alia Ibrahim

It is only a matter of time. In days, or maybe weeks, the Lebanese state’s failure to subsidize raw materials like fuel, wheat, and medicine will be announced. There won’t be any loud explosions, but it will be another time bomb that will destroy whatever had survived the crime at the port.

This is not an imaginary scenario. It is another fact, known by all the pillars of the ruling system, just as they had known all the details which had led to the port crime. This information was reported by Riad Salameh, the Governor of Lebanon’s central bank, to Hassan Diab, the Caretaker Prime Minister, during a meeting that was held in early August 2020 in the presence of enough witnesses.

The governor had insisted to keep repeating his quote “The Lebanese Lira is fine” for several weeks during which the Lebanese Lira was collapsing, until it lost more than 70% of its value against the US dollar. He also kept assuring the public that the state treasury had more than 20 billion dollars, through which he can sign a check at the disposal of the state. The same governor finally decided to disclose a legal term which he ignored during the last period. This term prevents compromising a minimum of the reserve stock, which is 17.5 billion dollars. This means that the currently available reserve stock does not exceed two and half billion dollars, and that the state will have to remove the subsidies within a period of no more than a month.

Some participants in the meeting said that Diab was outraged and reminded Salameh of his past assurances, but this did not change anything. It’s out of the hands of the governor who kept leaning on some settlement that would save him the trouble of admitting the existence of that “time bomb” and the necessity to deal with it.

It would not be an exaggeration to say that removing the subsidies on raw materials is a bomb that maybe will not smash glass or destroy buildings, but will eliminate what is remaining of the pillars of the Lebanese viability.

Kamal Hemdan, the economist, in a journalistic interview with “Aljoumhouria”, the Lebanese newspaper, discussed the possibility of “surreal increases” in prices as a result of removing the subsidies. The price of a can of gasoline, for example, may multiply by more than 10 times until it reaches 280,000 Lebanese Liras instead of 24,000 in less than 6 months.

This will happen in a country already suffering from the most critical economic crisis in its history. Due to this economic crisis, more than half of the population became below the poverty line within a month.

The official dealing with the port crime witnessed by the Lebanese, will be repeated again with the rampant increase of prices that will result in a famine and will directly impact more than 200,000 Lebanese families.

The subsidies will be removed and the mutual recrimination will start to distract public opinion locally, and gain time externally. Days and weeks will pass while we don’t understand anything, no one will be held accountable, except maybe for some minor beneficiaries who can be sacrificed.

The Lebanese will starve more, they will revolt more and will come back to the squares and there they will find an army whose soldiers do not eat any meat because of austerity, but this won’t mean that they wouldn’t have enough gas bombs and rubber bullets to attack those who oppose their fortified masters with their militias and guards, take the light of their eyes, and stop their hearts.

The governor may hold a press conference, attendance at which shall be restricted to himself, or he may participate in an episode for a popular TV show which he controls, to disclaim responsibility.

He will say that the political class is responsible for the collapse, while Hezbollah is waging a war to dismiss him. Salameh will not allow any skeptical questions about his narrative. He will not reply to any of the independent professionals who accuse him of “criminal negligence”, misinformation, procrastination, lack of transparency, and illegal practices that have been going on for decades. Reaching the extent of removing the subsidies is nothing but a result of all those practices.

He may blame some of his partners in the Lebanese banks and will not answer any questions related to the conflict of interest or the suspicions related to the financial engineering or those who benefited from it.

He may also try to gain some time by talking about a sovereign fund that will eliminate any chances for sovereignty, restructuring, or any other plans but he will never allow someone to ask him about the real benefits of any of the plans he talks about.

Once Again, There is No Exaggeration

A simulation prepared by the Banking Control Commission (BCCL) shows that even in the best-case scenario, after pumping 20 billion USD from foreign accounts, fresh money, into the local market, even without taking into account any defaults in collecting internal debts, which are expected to be a large sum due to the Coronavirus crisis on one hand, and the August 4 explosion on the other hand. The liquidity deficiency, according to global standards, will not decrease to below 7%, which means 23 banks, 9 of which are classified as ‘alpha,’ will default within 5 years.

The governor will not allow a journalist to ask him about the consequences of his policies, and he is certain that no other entity will question him.

Who would ask and who would question who?

The parliament that approves the state budget without ever questioning the feasibility of policies based on external debts to finance domestic corruption? The speaker of the parliament, who has been sitting in the same chair, his share of the civil war, for 30 years, who was never questioned himself? Or the minister of finance, who unequivocally refused any criminal investigation to find out the fate of our stolen money?

Who would hold whom accountable? The president who is staying in his palace, promising to hold a quick investigation concluded within 5 days, then we wake up 20 days later to find out that the one who brought the death shipment to Lebanon was his spoiled son-in-law, the former minister of energy, who was entrusted to billions of dollars that were robbed, while there is still electricity deficiency?

Who would hold whom accountable? The head of the caretaker government whose mere presence in this office is a humiliation to all Lebanese? Or “the avenger of blood” who is trying to make a comeback at any cost, as any cost would not be harder to pay than partnering with those he knows for sure are his father’s murderers?

Who would hold whom accountable? The warlords who inherited useless parties in which ‘modernity’ is represented only by the young age of their male children?

Who would hold whom accountable? Hezbollah Secretary-General, who was never ashamed to speak openly about serving the interests of other countries, and who was quick to acquit Israel from a crime against humanity that it may have committed against the Lebanese?

Who questions whom? And if they answer, who would believe them?

Who would believe a whole system in which none of the leaders dare to give condolences to a family who lost three children, children who were sent to their graves without a warning, or look into the eyes of those who knew Elias Khoury, the 15-year-old boy who became the loss of every Lebanese family?

There is no use in questioning these criminals. We already know the answer.

They all knew, they are all responsible even if they are not being questioned. Let’s all take a deep breath, and wait for the next crime, after that of the harbor and that of the famine. Indeed, there is another time bomb, we may not know what it is, but we surely know it is coming.

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