Lebanon Daily News Brief 02/22/2022
Central Bank Under Fire For Obscuring Recipients of Commissions
Over the weekend reports broke out that Lebanon’s central bank charged commissions for commercial banks in the country when those banks were buying government securities, while the bulk of those commissions were ultimately received by a company controlled by Raja Salameh, the brother of the central bank governor, Riad. According to Reuters, “Four contracts between Banque du Liban (BDL) and a Lebanese commercial bank seen by Reuters, dated from 2004 to 2014, state that the bank entering into the contract agreed to pay 3/8 of 1% commission on purchases of government certificates of deposit worth millions of dollars. Such contracts were standard for commercial banks making such purchases at the time, two senior executives in the finance industry told Reuters. The contracts seen by Reuters make no reference to Forry Associates, a company controlled by Raja Salameh, brother of central bank governor Riad Salameh.” [Reuters]
Parliament Extends Law Lifting Banking Secrecy On Public Accounts
Free Patriotic Movement MP and head of Parliament’s Finance and Budget Committee Ibrahim Kanaan requested that an unscheduled proposal be included on Parliament’s agenda yesterday, which resulted in the approved extension on the lifting of banking secrecy for public accounts in order to facilitate a forensic audit on the country’s central bank. The previous lifting of banking secrecy on public accounts expired in December of 2021. [L’Orient Today]
French FM To Visit Lebanon
French Foreign Minister Jean-Yves Le Drian indicated to Prime Minister Najib Miqati that he would visit Lebanon in early March, which was also confirmed by a French diplomatic source. According to Naharnet, “The visit’s aim is to press the government to move forward in reforms and also to seek tangible results in the negotiations with the International Monetary Fund,” as well as press the government to hold free and transparent elections. [Naharnet]
OPINION & ANALYSIS
Lebanon, The IMF, And The Parliamentary Elections – What’s The Story?
AbiNader writes, “The IMF identified five main areas of achievable, short- and medium-term measures that would provide a framework for future reforms. According to Byblos Bank, this includes ‘reforming state-owned enterprises starting with the energy sector and improve delivery services without additional public financing [subsidies]; enhancing transparency and accountability by strengthening the governance, anti-corruption, and the anti-money laundering, and combating financing of terrorism frameworks; reforming public finances to ensure debt sustainability and to provide space for social spending and reconstruction; restructure the financial sector to restore confidence and support the recovery; as well as establishing a credible monetary and exchange rate system.’ The IMF had other recommendations regarding the sequence of reforms suggesting that the government move immediately on energy sector and public procurement laws and take steps to build credibility with the Lebanese people as well as international donors. The approval of a proactive 2022 national budget will send a strong signal that the government intends to move in the right direction as the bottom line remains the same: it’s up to the Lebanese Parliament and political leadership to take the necessary first steps on the pathway of reform.”
Wilson Center, Viewpoints Series
Ukraine, Russia and the Arabs
Khurma writes, “As the Russian-Ukraine crisis continues to dominate headlines globally, different corners of the world are watching closely, waiting to see whether Russia will invade or de-escalate. One of these corners, which has received less attention, is the Arab world. Akin to other regions, it will be impacted in more ways than one. First, the Arab region continues to be a theater for great power competition, particularly between Russia and the United States. Second, it is home to some of the world’s largest oil and gas producers, whose energy production future is affected by rising tensions and the outcome of the crisis. In addition, skyrocketing oil prices in recent days have impacted financial markets in the Arab states of the Gulf, where stocks moved in different directions in reaction to “geopolitical tensions in Eastern Europe.” For energy importing countries such as Jordan and Lebanon, higher fuel prices are intrinsically linked to political anxiety at home. Third, many Arab countries will likely suffer food shortages if war erupts, as both Russia and the Ukraine are among their top sources of cereal imports.”
Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.