Yemeni Officials, Experts Call for Using New Saudi Deposit for Economic Reform

Workers and customers at the Central Bank of Yemen in Aden, Yemen December 13, 2018. REUTERS/Fawaz Salman
Workers and customers at the Central Bank of Yemen in Aden, Yemen December 13, 2018. REUTERS/Fawaz Salman
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Yemeni Officials, Experts Call for Using New Saudi Deposit for Economic Reform

Workers and customers at the Central Bank of Yemen in Aden, Yemen December 13, 2018. REUTERS/Fawaz Salman
Workers and customers at the Central Bank of Yemen in Aden, Yemen December 13, 2018. REUTERS/Fawaz Salman

Yemenis are optimistic that a Saudi deposit in the Central Bank will contribute to economic recovery, stop the collapse of the local currency, and control prices, especially with the approach of the month of Ramadan.

Saudi Arabia deposited $1 billion in the Central Bank of Yemen’s legitimate government, in a bid to bolster the economy.

Yemeni economic researcher Abdel-Hamid al-Masajdi said that any new deposit or foreign exchange resources would contribute to improving the value of the local currency.

In light of the challenges facing the government, this deposit will have a temporary impact on the value of the Yemeni currency, Masajdi told Asharq Al-Awsat, calling on the government to rely on its own resources, including revenues from oil and gas sales, and non-oil resources, such as tax, customs and fees collected centrally or through local authorities in the governorates, in addition to grants and subsidies.

The Yemeni researcher pointed to the importance of developing a system to raise the efficiency of collecting these resources, in cooperation between the security and executive authorities.

Saudi Arabia had previously deposited $2 billion dollars in 2018 to support the Yemeni currency. The Central Bank used most of the deposit to help finance the import of basic food commodities and fuel.

For his part, the Governor of the Central Bank of Yemen, Ahmed Ghaleb, said that the Saudi deposit came at a very sensitive and important time, to contribute to strengthening monetary stability.

However, he warned in previous television interviews that the deposit was not a solution to the disastrous economic situation in Yemen, especially after the government lost more than 70 percent of its revenue sources by stopping oil exports.

Economic researchers and academics believe that the legitimate government can curb the role of the Houthi militia in Sanaa, which will encourage businessmen to move their investment centers from Sanaa to Aden and other liberated cities, thus improving the income flow.

For his part, Mohammad Qahtan, a professor of economics at Taiz University, called for ending the division of the local currency and the banking system, and for the Central Bank in Aden to restore its sovereignty over the financial market.



Lebanese Govt. to Seek New IMF Program, Policy Statement Says

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas//File Photo
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas//File Photo
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Lebanese Govt. to Seek New IMF Program, Policy Statement Says

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas//File Photo
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas//File Photo

Lebanon's new government will negotiate with the International Monetary Fund for a new program and will work to deal with the country's financial default and public debt, according to a policy statement approved by the cabinet late on Monday.

The statement, a copy of which was reviewed by Reuters, said the government would work for an economical revival that could only be achieved through restructuring the banking sector.

Lebanon has been in deep economic crisis since 2019, when its financial system collapsed under the weight of massive state debts, prompting a sovereign default in 2020 and freezing ordinary depositors out of their savings in the banking system.

Beirut reached a draft funding deal with IMF in 2022 - contingent on reforms that authorities failed to deliver.

Finance Minister Yassine Jaber, who took office as part of a new government agreed earlier this month, told Reuters an IMF mission is expected to visit Lebanon in March.

Jaber said he had met the IMF's resident representative in Lebanon, Frederico Lima, and confirmed that the government plans to move ahead with reforms.

Lebanon's political landscape has been turned on its head since the Iran-backed Lebanese group Hezbollah, long a dominant player in Lebanese politics, was badly pummelled in last year's war with Israel.

Reflecting the shift in the power balance, the government policy statement did not include language used in previous years that was seen to legitimize a role for Hezbollah in defending Lebanon, saying instead "we want a state that has the decision of war and peace".

The statement said it was required to adopt a national security strategy and a foreign policy that works to 'neutralize' Lebanon from conflicts.

In the field of energy, the Lebanese government will seek to resume work in oil and gas exploration, according to the cabinet statement. It said the government planned to establish a Ministry of Technology and Artificial Intelligence.

With a new administration in neighboring Syria, the statement said the Lebanese government believed it has an opportunity to start a serious dialogue aimed at controlling and demarcating the borders and working to resolve the issue of displaced Syrians in Lebanon.