Panicked… The Lebanese Hide a Billion Dollars Inside Their Homeshttps://english.aawsat.com/home/article/1922341/panicked%E2%80%A6-lebanese-hide-billion-dollars-inside-their-homes
Panicked… The Lebanese Hide a Billion Dollars Inside Their Homes
A man counts Lebanese pounds at an exchange office in Beirut, Lebanon, August 16, 2018. REUTERS/Mohamed Azakir
One concern is currently preoccupying the Lebanese. It is not politics or security, but the economic situation. It is threatening their daily living because their national currency is menaced.
While Banque du Liban (BDL) maintains the local currency stability at LBP 1510 per USD, this figure is considered by some economists to be “illogical”. A parallel market has emerged, where the dollar value has reached in some exchange offices about LBP 1650.
Practically, a Lebanese banking source told Asharq Al-Awsat that there was no real pressure on the Lebanese pound in the market, adding that the Central Bank was not interfering greatly to maintain the stability of the national currency.
However, the source admits that there is a “scarcity” of cash in the Lebanese market that has led banks to adopt some necessary measures. This situation has raised panic among the people, who began, months ago, to store the currency in their homes. Economic Expert Prof. Jassem Ajaka estimated those amounts at around $2.5 billion.
Central Bank Governor Riad Salameh has reiterated on several occasions that there was no “dollar crisis.” He noted that banks were meeting customers’ demand for US dollars, with the possibility of withdrawing from ATMs in most banks.
“The dollar is available in Lebanon, and what we see on social media, and sometimes the media, is exaggerated and has its objectives,” Salameh told a news conference. He noted that any procedures for ATMs are due to the policy of each bank separately, adding that any transaction that the customer cannot make through ATMs can be done through the bank’s outlets.
Salameh asserted that BDL had reserves that exceed $38.5 billion and that there was no need for exceptional measures.
The cash crisis is partly due to the US-led economic war against Hezbollah’s funding. The party deals mainly with cash to circumvent US financial constraints.
A Lebanese minister told Asharq Al-Awsat that there were two main sources of currency withdrawals from the Lebanese banking sector, namely Syria and Hezbollah. Restrictions on the Syrian financial system are being vented through the Lebanese banking system, and Hezbollah has instructed some of its close associates to it to withdraw their money from banks in anticipation of US sanctions.
Sources with knowledge of the matter said that the US Assistant Secretary of Treasury for Money Laundering and Terrorist Financing Marshall Billingslea has warned some Lebanese banks against deliberately selling the dollar to the Syrian traders, who are on the sanctions list for using it in one way or another for import. He also denied that the US sanctions were the cause of this crisis.
On the other hand, Economic Researcher Dr. Mounir Rashed, linked the current crisis to the accumulation of several factors, including the recession that hit the Lebanese economy since the start of the Syrian war, the closure of transport routes, the decrease of tourism because of the security situation, in addition to the local financial situation that recorded a large deficit due to the decline of state revenues and the rise of expenditures.
Also, according to Rashed, rising deficits and public debt have led to a decline in Lebanon’s sovereign rating, which in turn encouraged more capital to flee abroad, coupled with US sanctions and pressure on the Lebanese banking sector.
Economic Expert Dr. Pierre El-Khoury admits that there is “fear and terror today in the markets about the possibility of the collapse of the exchange rate of the Lebanese pound against the major international currencies, especially the dollar.”
This panic is attributed to the confusing behavior of banks with customers, the vague statements by the BDL and the proliferation of rumors on social media.
But apart from the panic, Khoury adds that the crisis has deep roots, as the balance of payments deficit and the depletion of Lebanon’s hard currency reserves can no longer be controlled.
“The exposure of the Lebanese economic model to the regional crisis, which does not appear to have a positive horizon, and the US sanctions on some Lebanese parties, will deepen the liquidity crisis further,” concluded Khoury.
Meanwhile, information available to Asharq Al-Awsat confirmed that the financial working group, headed by Prime Minister Saad Hariri and including Finance Minister Ali Hassan Khalil and Riad Salameh, has already begun to develop ideas and financial mechanisms, specifically aimed at fortifying the BDL’s foreign reserves, and re-correcting the balance of payments, which suffered a record deficit of nearly $6 billion in the first half of this year.
The working group is counting on the adoption of the draft budget law for 2020, as well as the results of Hariri’s foreign meetings, especially in Paris, as France is the sponsor and coordinator of the CEDRE Conference.
The Finance minister has acknowledged that Lebanon was in a “difficult economic and financial situation, but we are not a collapsed country.”
“At the financial level, we still have the capacity to meet the needs. Yes, there is no large amounts of foreign currency liquidity in the hands of people in the market, but the dollar exchange rate is still maintaining its ratio and position in banks,” he added.
A Saddam Hussein mural is seen in Baghdad in 1991. (Getty Images)
People in Iraq often wonder dejectedly: What if Saddam Hussein were alive and ruling the country today? Many will reply with fantastical answers, but Saddam’s era would have responded: Iraq is isolated, either by siege or by a war that he launched or was being waged against him.
Many people cast doubt on whether actual change has been achieved in Iraq since the US invasion in 2003. The invasion ousted the Baath version of Iraq and Saddam was executed in December 2006, leaving questions to pile up over the years with no one having any answers.
After a quarter century, Iraq is accumulating questions. It casts them aside and forges ahead without addressing them. At best, it reviews itself and returns to that moment in April 2003 when the US launched its invasion. Or it asks new questions about the 2005 civil war, the armed alternatives that emerged in 2007, how ISIS swept through the country in 2014, or the wave of protests that erupted in 2019. It also asks new questions about Iran’s influence in the country that has persisted for decades.
The questions are many and none of the Iraqis have answered them.
A US marine wraps the American flag around the head of a Saddam Hussein statue in Baghdad. (Reuters file)
Saddam and the alternative
The September 11, 2001, attacks shook the United States and the entire world. They struck fear in Baghdad. Saddam had that year claimed that he had written a book, “The Fortified Castle”, about an Iraqi soldier who is captured by Iran. He manages to escape and return to Iraq to “fortify the castle”.
The terrifying Saddam and the terrified Iraqis have long spun tales about escaping to and from Iraq. It is a journey between the question and the non-answers. That year, when Baghdad was accused of being complicit in the 9/11 attacks, Saddam’s son Uday was “elected” member of the Baath party’s leadership council. The move sparked debate about possible change in Iraq. Bashar al-Assad had a year earlier inherited the presidency of Syria and its Baath party from his father Hafez.
The US invaded Iraq two years later and a new Iraq was born. Twenty-five years later, the country is still not fully grown up. Twenty-one years ago, on April 9, 2003, a US marine wrapped the head of a Saddam statue in Baghdad with an American flag. The Iraqis asked: why didn’t you leave us this iconic image, but instead of an American flag, used an Iraqi one?
Baghdad’s question and Washington’s answer
As the Iraqis observe the developments unfold in Syris with the ouster of Bashar from power, they can’t help but ask how this rapid “change” could have been possible without US tanks and weapons. Why are the Syrians insisting on celebrating “freedom” every day? They are also astonished at the Syrians who scramble to greet Abu Mohammed al-Golani, who has not yet managed to put this image behind him and fully assume his original identity of Ahmed al-Sharaa. The Iraqis wonder how the Syrians are managing this transition so far without a bloodbath.
They ask these questions because the Iraqis view and judge the world based on their own memories. They keep asking questions and await answers from others instead of themselves.
The Iraqis recall how in August 2003, after four months of US occupation, that the Jordanian embassy and United Nations offices were attacked, leaving several staff dead, including head of the UN mission Sergio de Mello. The Americans arrested Ali Hassan al-Majid, or “chemical Ali”, Saddam’s cousin, and 125 people were killed in a bombing in al-Najaf, including Shiite cleric Mohammed Baqer al-Hakim.
During that bloody month, the Iraqis asked questions about security, forgetting about Saddam’s alternative, democracy and the promised western model. Later, the facts would answer that the question of security was a means to escape questions about transitional justice.
Sergio de Mello (r) and Paul Bremmer (second right) attend the inaugural meeting of the Iraqi Governing Council in Baghdad on July 13, 2003. (Getty Images)
The question of civil war
Paul Bremer, the American ruler of Iraq, once escorted four opposition figures to Saddam’s prison cell. They flooded him with questions. Adnan al-Pachachi, a veteran diplomat, asked: “Why did you invade Kuwait?” Adel Abdul Mahdi, a former prime minister, asked: “Why did you kill the Kurds in the Anfal massacre?” Mowaffak al-Rubaie, a former national security adviser, asked: “Why did you kill your Baath comrades?” Ahmed al-Halabi simply insulted the former president. Saddam recoiled and then just smiled.
Saddam’s opponents left the prison cell with answers that should have helped them in running the transitional justice administration, but they failed.
The following year, Washington appointed Ayad Allawi to head the interim Iraqi Governing Council (IGC) that had limited jurisdiction so that it could be free to wage two fierce battles: one in Najaf against the “Mahdi Army”, headed by Moqtada al-Sadr, and the other against armed groups comprised of “resistance fighters” and “extremists” in Fallujah.
The opposition in the IGC got to work that was already prepared by the Americans. They outlined the distribution of Shiites, Sunnis and Kurds in the country, with historic questions about the majority and minority, and the “oppressed” now assuming rule after the ouster of the “oppressors”.
On the ground, the Ghazaliya neighborhood in western Baghdad with its Shiite and Sunni residents was in store for a bloodbath. On a winter night in 2005, an entire family was massacred and an enfant strangled to death. Soon after, lines drawing the Shiite and Sunni sections of the neighborhood emerged. The popular market became the tense border between the two halves. Two new rival “enemies” traded attacks, claiming several lives.
In Baghdad’s Green Zone, the IGC drew up a draft of the transitional rule. In January 2005, 8 million Iraqis voted for the establishment of a National Assembly.
Meanwhile, different “armies” kept on emerging in Baghdad. The media was filled with the death tolls of bloody relentless sectarian attacks. Checkpoints manned by masked gunmen popped up across the capital.
Those days seemed to answer the question of “who was the alternative to Saddam.” No one needed a concrete answer because the developments spoke for themselves.
Nouri al-Maliki came to power as prime minister in 2006. He famously declared: “I am the state of law” - in both the figurative and literal sense. Iraqis believed he had answers about the “state” and “law”, dismissing the very pointed “I” in his “manifesto”.
Nouri al-Maliki. (Getty Images)
The Maliki question
The American admired Maliki. Then Vice President Dick Cheney had repeatedly declared that he was committed to the establishment of a stable Iraq. Before that however, he had dispatched James Steele - who was once complicit in running dirty wars in El Salvador in the mid-1980s - to Baghdad to confront the “Sunni rebellion”. Steele set up the Shiite “death squads”. Steele was the man in the shadows behind Ahmed Kazim, then interior minister undersecretary, and behind him stood the new warlords.
In 2006, the political process was shaken by the bombing of the Al-Askari Shrine in Samarra. Questions were asked about the “need” to draw up new maps. Shiite high authority Ali al-Sistani said in February 2007 that the Sunnis were not involved in the attack. In July 2013, Maliki denied an American accusation that Tehran was behind it.
In those days, Maliki’s ego was growing ever bigger, and Steele’s death squads were rapidly growing greater in numbers.
The Iran and ISIS questions
Maliki tried to save himself as one city after another fell into the hands of ISIS. On June 9, 2014, as ISIS was waging battles in Mosul, Maliki met with senior Sunni tribal elders based on advice he had not heeded earlier and which could have averted the current disaster.
It was said that he made reluctant pledges to them and a third of Iraq later fell in ISIS’ hands. Sistani later issued a fatwa for “jihad” against the group, which later turned out not be aimed at saving the premier.
Maliki left the scene and Qassem Soleimani, commander of Iran’s Revolutionary Guard Corps’ (IRGC) Quds Force, took over. Successive prime ministers would know from then on what it is like to be shackled by Tehran’s pressure as IRGC officials made regular visits to their offices.
Soleimani reaped what Steele sowed. By 2017, armed factions were the dominant force in Iraq. Running in their orbit were other factions that took turns in “rebelling” against the government or agreeing with its choices.
Today, and after 14 years, Iran has consolidated what can be described as the “resistance playground” in Iraq that is teeming with armed factions and massive budgets.
Protesters in Baghdad’s Tahrir Square in October 2019. (AFP)
The October question
The Iraqis were unable to answer the ISIS question and the armed factions claimed “victory” against the group. Many ignored Sistani’s “answer” about whether the Popular Mobilization Forces (PMF) was there to protect Iraq or just its Shiites.
Exhausted Iraqis asked: “What next?”
Next came Adel Abdul Mahdi’s government in October 2018. It was weighed down by unanswered questions and a year later, thousands of youths took to the streets to protest the state of affairs in Iraq, specifically the dominance of armed groups.
They were met with live bullets. Many were abducted and others were silenced. Abdul Mehdi acquitted the killers, saying instead that a “fifth column” had carried out the bloody crackdown on protesters.
After he left office, some Iraqi politicians were brave enough to tell the truth, dismissing former PM’s acquittal and pinning blame on the factions.
Sistani called for PMF members to quit their partisan affiliations. His demand was left unheeded. Mustafa al-Qadhimi became prime minister in May 2020. He left office months later, also failing in resolving the issue of the PMF and armed factions.
By 2022, everyone had left the scene, but Iran remained, claiming the Iraqi crown for itself, controlling everything from its finances to its weapons.
Question about post-Assad Syria
On December 8, Syria’s Bashar fled the country. Everyone in Iraq is asking what happens next. The whole system in Iraq is at a loss: Do we wait for how Tehran will deal with Ahmed al-Sharaa, or do we ask Abu Mohammed al-Golani about his memories in Iraq?
The Iraqi people’s memories are what’s ruling the country, more so than the constitution, political parties and civil society because they are burdened with questions they don’t want to answer.
And yet they ask: What if we weren’t part of the “Axis of Resistance”? Iraq’s history would reply that it has long been part of axes, or either awaiting a war or taking part in them.
