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ABL Chairman Warns Against Lebanon’s ‘Financial Desertification’

ABL Chairman Warns Against Lebanon’s ‘Financial Desertification’

Wednesday, 24 June, 2020 - 09:15
People queue outside a currency exchange bureau in Lebanon's capital Beirut on June 18, 2020. (Photo by JOSEPH EID / AFP)

Chairman of the Association of Banks in Lebanon (ABL) Salim Sfeir has warned against the country’s “financial desertification,” calling for concerted action to stop it from collapsing.

In remarks to Asharq Al-Awsat, Sfeir said: “We won’t allow the country to become clinically dead.”

“Its rescue requires joint efforts to come up with an economic and financial vision with everybody’s input,” he said.

“Each and everyone of us is responsible to stop (the country’s) collapse,” Sfeir added.

The ABL chairman lamented that discrepancies between the government and the Central Bank on estimated financial sector losses have complicated the talks with the International Monetary Fund (IMF).

The heavily indebted Lebanese government has been in talks for weeks with the IMF after it asked for a financial rescue plan but there are no signs of an imminent deal.

“After 15 rounds of talks, it’s unacceptable for us not to move forward and reach a breakthrough, without which we won’t be able to stop the (financial) collapse and salvage” the country, Sfeir told the newspaper.

“As Speaker Nabih Berri has stated, the only way we could start a serious negotiation process between the government and the IMF is through a single voice,” he said.

But he warned that this won’t be possible without a true coordination between the government, the Central Bank, ABL and the economic committees.

Sfeir called for giving priorities to investment spending in order to create new job opportunities.

He denied that Lebanon is on the verge of bankruptcy, saying “we only have financial problems because the state spent more than its capabilities.”

Sfeir reiterated that bank deposits are safe.

“The deposits are a red line and we agree with Speaker Berri on that,” he said.

He also warned against the country’s “financial desertification by wasting opportunities in bringing Lebanon out of its severe illness.”

“Lebanon will suffer from a painfully slow death” if it doesn’t change its behavior in regaining the confidence of the international community, Sfeir said.

Years of corruption and mismanagement have left Lebanon with depleted resources, while shrinking investment in the region and falling remittances from Lebanese abroad only increased the shortage of foreign capital.

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