Hottest Commodity in Lebanon's Economic Chaos: The US Dollar

In this April 28, 2020 file photo, a cell phone shop owner wears gloves as he counts US dollars, in Beirut, Lebanon. (AP Photo/Hussein Malla, File)
In this April 28, 2020 file photo, a cell phone shop owner wears gloves as he counts US dollars, in Beirut, Lebanon. (AP Photo/Hussein Malla, File)
TT

Hottest Commodity in Lebanon's Economic Chaos: The US Dollar

In this April 28, 2020 file photo, a cell phone shop owner wears gloves as he counts US dollars, in Beirut, Lebanon. (AP Photo/Hussein Malla, File)
In this April 28, 2020 file photo, a cell phone shop owner wears gloves as he counts US dollars, in Beirut, Lebanon. (AP Photo/Hussein Malla, File)

The lines snaked around the block. Then they swelled to fill the whole street, before they turned into a raucous mob of men shoving to the front of the line. There at the exchange bureau, they could buy rationed dollars, the hottest commodity in Lebanon.

The small Mediterranean country´s financial meltdown has thrown Lebanese into a frantic search for dollars as their local currency's value evaporates. To get the precious hard currency, they must navigate labyrinthine regulations, exploiting any loopholes they can to rescue their earnings.

Every transaction, from doctor fees to store purchases to rent, is negotiated day by day, juggling the tumbling Lebanese pound and multiple, changing dollar exchange rates. Those who can are snapping up luxury goods or real estate, trying to use their dollars trapped in bank accounts frozen by the cash-strapped authorities.

The turmoil is deepening resentment of the political elite and the once flourishing banking system - and fueling desperation.

"They are going to crash us into a wall," Chris Georgian, a 25-year-old student, said, trying to buy $600 at an exchange bureau to send for his university fees in Armenia.

Last week, a 61-year-old man apparently distraught over his economic situation shot and killed himself on a Beirut commercial street, one of multiple suicides during the crisis.

Despite survival skills honed by political tension and wars, nothing prepared Lebanese for having to line up to buy money.

During the 15-year civil war and Israel´s invasion and occupation of the south and Beirut, there may have been queues for water or bread, but Lebanon was always flush with dollars.

Since 1997, the local currency, the pound, was pegged at around 1,500 to the dollar, and Lebanese used the two interchangeably.

That stability was built on what experts say was essentially a Ponzi scheme that let banks and the elite profit while allowing Lebanese to live beyond their means.

Successive governments borrowed from private banks to finance massive public debt and pay for vital imports like fuel - but also luxury goods - eating into depositors´ dollar accounts. Most of those deposits were from Lebanese expats attracted by high-interest rates.

It collapsed when remittances and direct foreign investments plunged in recent years.

In the ensuing liquidity crunch, the pound has lost nearly 85% of its value. Tens of thousands have fallen into poverty, wages are worth only a fraction of what they once were, and prices are skyrocketing - stripping Lebanon of its trademark joie de vivre and vibrancy.

Chain retailers have shut down, unable to import or price goods with the fluctuating rates. Some vendors have either closed or only take payment in dollars.

Dollar accounts have been frozen, and those trapped dollars have become "Monopoly money" with no value outside Lebanon, said Dan Azzi, a former banker and analyst. He coined a name for that currency, the "Lollar" or Lebanese dollar.

People began hoarding cash dollars, getting relatives living abroad to transfer dollars, which - unlike frozen local accounts - can be withdrawn from the bank.

Some sell gold for dollars. "We buy gold at the highest price $39-$55 and in cash," reads one jeweler´s marketing telephone message.

The peg remains in place officially, even as the black market price of a dollar has spiraled to at least five times that. Meanwhile, authorities imposed rationing on exchange bureaus, limiting how many dollars a person can buy and setting a rate higher than the peg but lower than the black market.

That fanned the raucous lines. Some bought dollars only to sell them on the black market. New phone apps cropped up to keep track of multiple rates.

"Isn´t all this humiliating?" said Elie, a security guard keeping order at an exchange bureau. "When senior officials were making money, we were getting some of it. Now they aren´t anymore, so they deny it to us," he said, declining to give his last name because of his job.

Many scramble for ways to use their trapped "Lollars," fearing they could eventually lose them completely.

Lines formed outside luxury retailer Louis Vuitton because it was selling at a rate half the black market. Others use stuck dollars to settle bank loans, still valued at the official peg. Azzi estimates loans up to $15 billion have been paid already.

Ghassan Frem, a dentist, paid a friend´s loan of over $30,000 with his "Lollars." She paid him the money in an account abroad. It is a win-win: He uses his "dead" dollars, and the friend settles her loan at a discount.

Meanwhile, Frem bought $950-worth of new air conditioners on his credit card. The trick is: He pays his credit card bill at the official rate with pounds he bought on the black market for far fewer dollars.

Many use this loophole, buying merchandise or doing renovations whether they need it or not, to rescue trapped dollars.

"Anyone who can get back at the banks is doing some good," Frem said. "We do to them what they have done to us."

On social media, some proposed organizing a peer-to-peer platform to avoid using banks.

Meanwhile, real estate transactions jumped more than 16% in the first quarter of 2020, according to the General Directorate of Land Registry. One of Lebanon´s largest real estate companies, Solidere, reported a profit for the first time since 2018.

For his dental clinic, Frem negotiates purchasing supplies item by item, hour by hour. One Monday afternoon, he ordered a product and by the time it arrived the next day, the dollar price had gone up 20%. "The delivery guy got a text message with the new price when he arrived," Frem said.

For Georgian, the student, his education is on the line.

A third-year psychology student in a Yerevan university, he returned to Lebanon because of coronavirus. With his parents´ dollars locked up, he has to chase dollars to finance his return.

At the exchange office, he asked the guard to walk him through the documents he needed. Under new rules to curb profiteering, you must prove you need rationed dollars to pay education fees, rent, medical fees or salaries for foreign workers. No one gets cash - the dollars you buy are sent directly to the destination.

Still, Georgian was relieved. His school fees are $600, and the cost for that at the exchange is about half what it would be on the black market, saving him enough to live for months in Yerevan.

"If the dollar keeps rising, I will never go back," he said. "I will lose my education."

Georgian questioned his parents´ decision to remain in Lebanon despite constant complaints of corruption.

"They said they didn´t think it will be this bad," he said, shaking his head.



Bahraini Transport Minister to Asharq Al-Awsat: Each Country to Finance Its Share of Gulf Railway Project

A conceptual rendering of the Gulf railway interconnection project. (X)
A conceptual rendering of the Gulf railway interconnection project. (X)
TT

Bahraini Transport Minister to Asharq Al-Awsat: Each Country to Finance Its Share of Gulf Railway Project

A conceptual rendering of the Gulf railway interconnection project. (X)
A conceptual rendering of the Gulf railway interconnection project. (X)

The Gulf Cooperation Council (GCC) member states took a new step toward completing the railway interconnection project by signing the project's general agreement in Bahrain on Sunday. This comes as part of efforts to establish an integrated transport network linking the six nations and boosting the movement of passengers, goods, and commercial trade among them.

Bahraini Minister of Transportation and Telecommunications Dr. Sheikh Abdulla bin Ahmed Al Khalifa told Asharq Al-Awsat that each country will fund and execute the portion of the project located within its territory.

Meanwhile, the costs, fees, and expenses associated with the shared interconnection components among member states will be determined collectively, he added.

He explained that the agreement establishes a joint framework for the project's execution and operation, while defining the obligations of member states and their coordination mechanisms.

He noted that the network, which extends some 2,117 kilometers, aims to transport 6 million passengers and 200 million tons of freight by 2030, with the figures projected to rise to more than 8 million passengers and 271 million tons of freight by 2045.

The project spans from Kuwait, passing through Saudi Arabia, Bahrain, Qatar, and the UAE, all the way to Oman, with the goal of achieving full network operations by December 2030.

According to the minister, interconnection lines between adjacent countries can become operational as soon as their components are completed, without the need to wait for the entire Gulf network to be finalized.

National financing and potential partnerships

On private sector participation, Al Khalifa said that it remains one of the viable options for financing, executing, or operating certain components of the project, depending on the outcomes of economic and financial studies. He stressed that there is no unified public-private partnership model approved across the entire network.

There are currently no pre-existing agreements with specific international partners to finance or execute the project, he said. However, the expertise of global companies in the fields of design, engineering, technology, and operating systems could be utilized based on the project's needs and its various phases.

Bahraini Minister of Transportation and Telecommunications Dr. Sheikh Abdulla bin Ahmed Al Khalifa.

Concerning the project's announced completion rate, the minister explained that the 50 percent figure represents the average progress achieved across member states, and does not mean that half of the construction work for the entire Gulf network has been completed.

The project's cost estimates are currently undergoing review and updates in light of economic shifts, rising prices for materials and services, construction costs, and inflation, he revealed without specifying an updated total cost at the present time.

Returns beyond passenger and freight transport

Al Khalifa said that the economic impact of the project is not limited to facilitating passenger movement and freight transport, but extends to improving supply chain efficiency, boosting trade among GCC countries, and linking industrial centers, economic zones, and logistical hubs, as well as supporting employment and investment opportunities.

He added that determining the project's exact contribution to the gross domestic product (GDP) or estimating expected savings in time and costs remains premature, given that returns vary depending on transport routes, the nature of the cargo, and the points of origin and destination.

In light of the challenges facing maritime navigation in the region, the minister stressed that the Gulf railway network is not intended to serve as a substitute for maritime transport. Instead, it acts as a complementary route that boosts transport options and connectivity among GCC nations, increasing the resilience of supply chains against disruptions that could affect various modes of transportation.

He noted that integration between ports, roads, railways, and airports will strengthen the flexibility of the Gulf transport system, while connecting to broader international logistical corridors remains a future possibility contingent on completing studies, understandings, and coordination with the relevant countries and entities.

King Hamad Bridge to link Bahrain and Saudi Arabia

Regarding the connection between Bahrain and Saudi Arabia, Al Khalifa explained that the King Hamad Bridge project includes road lanes and railway lines, enabling the international passenger station in Bahrain to connect with the Saudi railway network and forming one of the essential components for completing the Gulf interconnection.

He added that work is underway on the privatization procedures for the King Fahd Causeway Authority, alongside completing the necessary studies and procedures to transition to the execution of the new bridge project.

Achieving the connection between Bahrain and Saudi Arabia is a fundamental requirement for operating the railway line between the two countries within the project's targeted timeframe in December 2030,e he said.


Egypt Seeks Faster Progress on Libya Gas, Refining and Power Projects

Egyptian Foreign Minister Badr Abdelatty speaks during a press conference with Minister of Information Diaa Rashwan (not pictured) in Cairo, Egypt, March 25, 2026. (Reuters)
Egyptian Foreign Minister Badr Abdelatty speaks during a press conference with Minister of Information Diaa Rashwan (not pictured) in Cairo, Egypt, March 25, 2026. (Reuters)
TT

Egypt Seeks Faster Progress on Libya Gas, Refining and Power Projects

Egyptian Foreign Minister Badr Abdelatty speaks during a press conference with Minister of Information Diaa Rashwan (not pictured) in Cairo, Egypt, March 25, 2026. (Reuters)
Egyptian Foreign Minister Badr Abdelatty speaks during a press conference with Minister of Information Diaa Rashwan (not pictured) in Cairo, Egypt, March 25, 2026. (Reuters)

Egypt aims to accelerate energy projects with Libya, including gas pipeline links, refining of Libyan crude in Egypt and an electricity interconnection, Egyptian Foreign Minister Badr Abdelatty said late on Saturday.

Abdelatty's comments were in ‌a ministry ‌statement after a meeting ‌with ⁠Libya’s acting oil ⁠and gas minister Khalifa Abdulsadek in Tripoli.

Abdelatty also ‌called for cooperation on petroleum products and the completion of projects to refine Libyan ‌oil in Egypt and re-export it, the statement said, ⁠adding ⁠that Abdulsadek had said that Libya would continue implementing existing projects and would visit Cairo soon to continue technical talks with Egypt’s petroleum and electricity ministers.

The statement did not provide details on costs or the status of the projects.


GCC: Railway Agreement Sets Joint Framework for Project Implementation and Operation

GCC transport ministers pose for a group photo following the 27th committee meeting in Kuwait. (GCC Railway Authority)
GCC transport ministers pose for a group photo following the 27th committee meeting in Kuwait. (GCC Railway Authority)
TT

GCC: Railway Agreement Sets Joint Framework for Project Implementation and Operation

GCC transport ministers pose for a group photo following the 27th committee meeting in Kuwait. (GCC Railway Authority)
GCC transport ministers pose for a group photo following the 27th committee meeting in Kuwait. (GCC Railway Authority)

Jasem Albudaiwi, secretary-general of the Gulf Cooperation Council (GCC), said on Sunday that the signing of the General Agreement on the GCC Railway Project marked an important step toward establishing an integrated regional transport network.

He said the network would facilitate the movement of citizens and residents, ease freight transport, boost intra-GCC trade efficiency and strengthen member states’ economic competitiveness and the region’s position in regional and international trade.

Albudaiwi's remarks came at the signing ceremony in the Bahraini capital, Manama, on Sunday, held under the patronage and in the presence of Bahrain’s Crown Prince and Prime Minister Salman bin Hamad Al Khalifa.

He said the project reflected the GCC’s shared ambition to connect member states and improve mobility and trade by linking their economic and industrial hubs, ports and logistics centers.

He added that the project would create opportunities for safe, reliable, affordable and environmentally friendly transport services that meet development needs, serve the aspirations of future generations and strengthen economic integration among GCC states.

Albudaiwi said the agreement sets a common framework for member states to implement and operate the project in coordination with their national railway networks, while establishing mechanisms and a timetable to accelerate its completion.

Albudaiwi praised GCC leaders and transport ministers for their support of strategic regional projects, thanking Bahrain’s crown prince and prime minister for hosting the signing ceremony and officials for advancing the railway project.