IMF deal seen as only way out for Lebanon

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BEIRUT (Reuters) by Samia Nakhoul, Tom Perry -- The Lebanese government must swallow its misgivings and reach a rescue deal with the International Monetary Fund (IMF) or risk economic implosion and further turmoil, economists, diplomats and politicians said. Privately, some government officials acknowledge that an IMF bailout is the most logical solution to Lebanon’s economic crisis, according to a source familiar with ongoing discussions. But to get such a rescue program in place, the new government would have to overcome the objections of Hezbollah, the powerful Iranian-backed power broker in Prime Minister Hassan Diab’s cabinet and its Christian and Shi’ite allies, who are concerned about the austerity measures an IMF rescue would involve.

As Lebanon’s financial crisis drags on and government revenues dwindle, the bill to rescue the country is rising. Former economy minister and ex-vice central bank governor Nasser Saidi estimates the economy will need $30 billion, and an additional $25 billion to recapitalise a banking system in hock to the state. “Lebanon needs external liquidity both for the balance of payments but also for the government,” Saidi said. “That’s why the external package and the IMF reform program which comes with all the associated reforms which we need is so necessary”. A $1.2 billion payment on a Eurobond is falling due on March 9 and even though Lebanon is widely expected to restructure its foreign-currency-denominated debt that is unlikely to be enough to deal with the total debt burden, economists and analysts say.

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Prosecutor freezes assets of 20 Lebanese banks amid crisis

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Al Jazeera by Timour Azhari -- Beirut, Lebanon - A judge in Lebanon has suspended a decision by a financial prosecutor to freeze the assets of 20 banks and their chairmen and boards of directors The judge, Ghassan Oueidat, said late on Thursday he has issued a stay of the prosecutor's order so he could study its effects on the country’s monetary situation, bank transactions, depositors’ money, and economic security. The prosecutor, Judge Ali Ibrahim, earlier on Thursday ordered the assets of the banks, their executives and boards of directors to be frozen as part of an investigation into billions of dollars transferred out of the cash-strapped nation.

Ibrahim's order came amid a worsening economic and financial spiral that has Lebanon staring down the barrel of defaulting on a Eurobond repayment due next week. An acute foreign currency shortage has seen the Lebanese pound devalue on parallel markets to lows unprecedented since it was pegged to the US dollar in 1993. Lebanon's economy is dependent on inflows of foreign currency from its large diaspora, but they have dried up as the country descends deeper into a crisis rooted in corruption, government mismanagement, a dilapidated power sector that bleeds billions and the civil war next door in Syria. The dollar shortage has made the scenario of a default on the country's enormous $87bn public debt - the third highest in the world compared with its gross domestic product (GDP) - increasingly likely.

The cabinet will meet on Saturday to decide whether to make good on a much-anticipated $1.2bn Eurobond repayment due on March 9. "Given the negotiations on the Eurobonds with the banks, [Ibrahim's] decision can be seen as a pressure tool on them to accept government conditions," Jad Chaaban, an associate professor of economics at the American University of Beirut, told Al Jazeera. A senior banking source told Al Jazeera that they view the decision as a further attempt by politicians to shift blame for the country's dire situation onto banks and away from a political class that has ruled Lebanon since its 1975-90 civil war. "There is political pressure on the judge to do this. It's as if we are the ones who stole money and hired thousands of people, and wrecked the electricity sector and wasted money on deals. It's a scapegoat," the source said.

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Most Lebanese MPs oppose paying debt even if it means default

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by reuters -- A majority of Lebanese Parliament members oppose paying looming Eurobond maturities, even if that leads to default, Parliament Speaker Nabih Berri said on Wednesday. The announcement compounded doubts over whether the heavily indebted country will meet a March 9 repayment deadline. Lebanon is facing an unprecedented economic and financial crisis, which came to a head last year as capital inflows slowed and protests erupted against the ruling elite. Its next debt maturity is a $1.2bn Eurobond due on March 9.

Senior sources close to two of the main parties that back the government - the powerful Hezbollah, and Berri's Amal Movement - told Reuters news agency that the government was expected to announce a decision not to pay on Friday or Saturday and enter negotiations with bondholders. A source close to the other main backer of the government - the Free Patriotic Movement, founded by President Michel Aoun - said such a declaration may happen unless foreign bondholders made a good offer in time. Berri, one of Lebanon's most influential leaders, made his comments at a weekly meeting of members of Parliament. "We are with any measure the government takes apart from paying," Ali Bazzi, a lawmaker from Berri's parliamentary bloc, cited him as saying.

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Lebanese Embassy in Rome Advises Nationals to Avoid Travel to Lebanon

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by naharnet.com -- The Lebanese Embassy in Rome called in a statement on all Lebanese nationals in Italy to exercise caution and follow the general precaution guidelines facing the widespread of COVID-19 disease, the National News Agency reported on Tuesday. NNA said the embassy advised Lebanese residing in Italy to avoid travel to Lebanon at the present time "except when absolutely necessary," in order to avoid the transmission of the virus, which can be deadly to their families, especially the elderly, and those with low immunity. The statement also emphasized that it was advisable to undergo Coronavirus diagnostic testing before traveling to Lebanon if possible. The embassy finally stated that the medical system in Italy was one of the most important medical systems ever. "Dealing with the Coronavirus in Italy has proven to be highly professional as successful treatments have exceeded 90 percent.

Lebanese University president apologizes for bullying of Chinese students

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by arabnews.com -- Najia Houssari -- BEIRUT: Lebanese University President Fouad Ayoub has apologized to Chinese students for “any abuse or bullying by any student at the university or by any Lebanese person against you following the coronavirus crisis.” Dr. Ayoub described any case of bullying as “individual and (this) should not be generalized because it does not reflect the morals of the Lebanese people who love their guests.” Amir Wang, a Chinese student at the Lebanese University who went to Shanghai to celebrate the new year and returned to Lebanon to continue his studies, was asked by Lebanese authorities to stay home until his health status was clarified to find out whether he was carrying the coronavirus. Wang returned to his home in the town of Chehime in Mount Lebanon, 47 km from Beirut. Wang complained to his teacher, Dr. Masoud Daher, and on social media during the past week, that he was bullied by people in the town and in other areas he crossed while travelling to his home.

Dr. Daher, a professor at the Lebanese University and head of the Lebanese-Chinese Association in Lebanon, told Arab News: “Wang was subjected to unjust harassment. He was insulted just because he was Chinese.” Daher said: “The Lebanese University includes 10 Chinese students studying in the department of translation and languages, and there are two students at the doctoral school who are pursuing two economic research projects on China and the Arab world under my supervision. Some of the students live in the student accommodation on the campus of the Lebanese University in the Al-Hadath area, and they were harassed by some Lebanese as well.” Dr. Daher said that Chinese students “have been going to the Lebanese University for 10 years. Some of them are teaching the Chinese language. They are assigned by their government to teach the Chinese language at the University’s language center.” Meanwhile, Ayoub told a delegation of Chinese students that “China will overcome its crisis and will defeat coronavirus thanks to its scientists, students and great people.” He wished the Chinese students to “convey the image of beautiful Lebanon and be the ambassadors of the Lebanese University in your homeland.” After the complaint by Wang on social media, MP Bilal Abdullah, who is from the town of Chehime, invited Wang to lunch with a number of locals. The meeting was published on social media as an apology for any racist behavior toward Wang.

Lebanese authorities are dealing with the coronavirus through sterilization operations for official departments, prisons, border security centers and schools. A decision to resume studies in educational institutions has not yet been taken and schools and universities will remain closed until next Monday. Schools are sending daily lessons to students via social media, especially for those taking official exams. In the ministries’ buildings, digital fingerprints for employees have been replaced by signatures. Hand sterilizers have been placed at the entrance to Parliament, and MPs entering the building are avoiding handshakes. Assem Araji, the head of the parliamentary health committee, said that the virus “has not spread significantly yet, but we must be equipped in the event of its spread, and a plan must be found to keep pace with the stage of spreading. Some government hospitals should also be prepared. One billion Lebanese pounds have been allocated for this matter, but this amount may not be sufficient.” Stores have run out of sterilizers due to the high demand for them, and the price of the remaining ones has increased.

The degree of panic caused by virus was reflected by the fact that one of the courts in Nabatieh, in the south, closed after a security officer lost consciousness. However, he was later found to be suffering from an ear infection that caused him to lose his balance, according to a statement issued by the Internal Security Forces. In the city of Tripoli in northern Lebanon, a decision was made to prevent entry to the city’s main center for all official transactions in the North Governorate, unless face masks were worn. The Lebanese Embassy in Rome advised all its nationals in Italy “not to travel to Lebanon at the present time except when absolutely necessary, in order to avoid the transmission of the virus to their families in Lebanon.”

Lebanon calling for the institution of a new UN commission for Lebanon against corruption

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by arabnews.com -- BEIRUT: Campaigners in Lebanon will gather at Beirut’s Press Club on Wednesday morning to unveil a petition that calls on the UN to create an international commission to investigate and prevent political corruption. It has been signed by number of former ministers, former and current MPs, representatives of non-governmental organizations, and intellectuals. Toni Nissi, the president of the International Lebanese Committee for UN Security Council Resolution 1559, a pro-democracy NGO, said that there have been many attempts by campaigners to clean up politics in Lebanon over the years, including lobbying for international resolutions to be issued and implemented.

“The crisis is due to the high levels of corruption and the lack of leadership skills among Lebanese politicians,” said Nissi, “It is impossible to have a stable economy when the public sector supplies 65 percent of the jobs. How can the taxes paid by the 35 percent working in the private sector be able to pay the salaries of the 65 percent plus all the country’s expenses, with all the ongoing corruption?” Given that politicians from the governing parties continue to exert full control over the implementation of laws in Lebanon, and rarely commit to the implementation of UN resolutions and decisions, including UNSCR 1559, some might be skeptical about the chances of the petition having any significant effect. Nissi, however, remains hopeful that it will bring about change, because the commission would be set up directly through the UN without interference from the Lebanese administration. “Political reform is a must,” he said. “But to reach political reform we must stop the corruption first, get back the stolen money, eliminate any factors that protect the thieves, and achieve enforcement of the law. We believe that if the petition’s requests are implemented, we might reach that phase.”

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