A Bundle Of English Reports, News and Editorials For January 06-07/2020 Addressing the On Going Mass Demonstrations & Sit In-ins In Iranian Occupied Lebanon in its 82th Day
Compiled By: Elias Bejjani
January 06/2020
Titles For The Latest English LCCC Lebanese & Lebanese Related News published on January 06-07/2020
Lebanon’s TV Stations Are Mere Iranian Mouthpieces/Elias Bejjani/January 06/2020
Nasrallah and Hezbollah Evil Organization are a cancer ravaging peace, and the entity of Lebanon/Elias Bejjani/January 06/2020
With a crazy illuminated guy like Nasrallah and his followers I don’t have any hope for a recovery for Lebanon./Roger Bejjani/Face Book/January 07/2020
Duel over Christian Seats Delaying New Govt. Formation
March 8 Says No Govt. over Next Two Days
Near-Final Government Line-Up Emerges
Berri meets with Kubis, Ibrahim
Protest march sets out from the Justice Palace in Beirut in demand for the independence of the judiciary
“Dams are a Lebanese need,” says Boustani
Rahi during Epiphany Mass: To form a government free of politicians, partisans’ influence and narrow interests
Abu Ghazaleh denies a recording attributed to him: Lebanon’s economy, banking system and Lira have my complete trust
Aram I calls for new faces within cabinet ‘that inspire confidence and achieve reform’
Bassil expresses solidarity with the Australian people
Dar Fatwa denies information on Derian’s choosing names for cabinet formation
Ghosn to Speak Publicly on Escape from Japan
Ghosn ‘Fled by Bullet Train’, Japan Vows to Bolster Borders
Report: Lebanese, U.S. War Veterans Orchestrated Ghosn’s Escape
Ghosn’s escape from Japan: New details
Lebanon and Expectations on the ‘Iranian Response’/Hazem Saghieh/Asharq Al Awsat/January 06/2020
Lebanon’s Economic Crisis: A Ten Point Action Plan for Avoiding a Lost Decade/A Citizen Initiative/Annahar /January 06/2020
Details Of The Latest English LCCC Lebanese & Lebanese Related News published on January 06-07/2020
Lebanon’s TV Stations Are Mere Iranian Mouthpieces
Elias Bejjani/January 06/2020
The media facilities in Lebanon are totally deceptive and their owners have lost all that is truth, righteousness, dignity and self respect. Sadly and because of the Hezbollah oppression and terrorism these media facilities became Mere trumpets, Cymbals, puppets and a bunch of hired mouthpieces
Nasrallah and Hezbollah Evil Organization are a cancer ravaging peace, and the entity of Lebanon
Elias Bejjani/January 06/2020
Nasrallah’s speech of today was a mere squawk, and a big bundle of hallucinations, delusions, fallacies, advocacy for terrorism and an assault on everything that is Lebanese, Arab world and peace in the Middle East.
With a crazy illuminated guy like Nasrallah and his followers I don’t have any hope for a recovery for Lebanon.
Roger Bejjani/Face Book/January 07/2020
With a crazy illuminated guy like Nasrallah and his followers I don’t have any hope for a recovery for Lebanon.
For the sake of his ideology and Iran he is ready to sacrifice Lebanon and the Lebanese. Things will evolve dramatically bad from now on. I predict social disruption, chaos, civil war, cross borders wars, assassinations….
The total absence of responsibility of the Iranian agents in Lebanon is the ONLY thing Lebanese should have risen against. Instead thousands of Don Quichots have risen against Siniora, Banks, Salame….and corruption.
As I have previously (a couple of months ago) proposed, a coherent region free from Hezbollah should be framed and defended. From Akkar to Ras Beirut and Zahle East. An airport opened in Akkar or Hamat (not Halât), BDL gold safe in Jounieh, total boycott of Hezbollah controlled regions (Dahjye to south Lebanon and most of Bekaa and Chouf).
Let them build their Iranian bridge head on the Mediterranean and let us build our peaceful, neutral and prosperous Lebanon.
Duel over Christian Seats Delaying New Govt. Formation
Naharnet/January 06/2020
A standoff over the distribution of Christian seats is delaying the formation of the new government, media reports said. “Communication was severed over the weekend between the PM-designate and Minister Jebran Bassil and the exchange of lists stopped,” An-Nahar newspaper reported on Monday. The obstacle related to the foreign affairs portfolio has “stopped the momentum” of the past days, the daily said. “The PM-designate has insisted on allocating it to ex-minister Demianos Qattar, but he has faced a veto from Bassil, who wants it for Ambassador Nassif Hitti or Ambassador Charbel Wehbe. The PM-designate has also faced a veto from Bassil on ex-minister Ziad Baroud,” An-Nahar added.
March 8 Says No Govt. over Next Two Days
Naharnet/January 06/2020
The new government will not be formed on Monday or Tuesday, highly informed March 8 sources have said. The remarks come despite reports that had suggested that PM-designate Hassan Diab would form his government by Tuesday at the latest. “The main obstacles related to Christian candidates and their portfolios are still present and require further consultations,” the sources told al-Akhbar newspaper in remarks published Monday. “Druze leaders are still objecting to the distribution of portfolios,” the sources added.
Near-Final Government Line-Up Emerges
Naharnet/January 06/2020
A near-final line-up of Hassan Diab’s upcoming government has been leaked to the media.
Below is a draft line-up published by An-Nahar newspaper on Monday:
– Finance: Ghazi Wazni (Shiite)
– Health: Dr. Ali Haidar (Shiite)
– Industry: Abdul Halim Fadlallah (Shiite)
– Agriculture & Tourism: Salem Darwish (Shiite)
– Interior: Brig. Gen. Talal al-Ladqi (Sunni)
– Telecom: Talal Hawat or Othman Sultan (Sunni)
– Education & Sport: Tarek Majzoub (Sunni)
– Displaced & Social Affairs: Dr. Ramzi Msharrafiyeh (Druze)
– Foreign Affairs: No agreement yet on Maronite candidate
– Defense: Maj. Gen. Michel Menassa or Zeina Adra (Maronite)
– Justice: Judge Henri Khoury (Maronite)
– Energy: No agreement yet on Maronite candidate
– Economy: Amal Haddad or Petra Khoury (Christian)
– Labor: Amal Haddad or Petra Khoury (Christian)
– Information & Culture: Varte Ohanian (Armenian)
– Administrative Development: Jack Sarraf (Greek Orthodox)
– Deputy PM: Amal Haddad or Jack Sarraf (Greek Orthodox)
Berri meets with Kubis, Ibrahim
NNA /January 06/2020
House Speaker, Nabih Berri, met at Ain El-Tineh Palace today with the Special Coordinator of the United Nations Secretary-General in Lebanon, Jan Kubis, with the current prevailing conditions in Lebanon and the region topping their discussions.
Berri later conferred with Public Security General Director, Major General Abbas Ibrahim.
Protest march sets out from the Justice Palace in Beirut in demand for the independence of the judiciary
NNA /January 06/2020
A march under the slogan of “Lebanese universities’ uprise” set out this afternoon from outside the Palace of Justice in Beirut, passing through several points before reaching the Parliament House in downtonwn Beirut, NNA correspondent reported. Participating protesters carrying Lebanese flags called for the independence of the judiciary, while criticizing the country’s political class.
“Dams are a Lebanese need,” says Boustani
NNA /January 06/2020
Caretaker Water and Energy Minister, Nada Boustani, highlighted Monday Lebanon’s essential need for water dams, during an inspection visit to Msailha Dam where she had a closer look at the final work phase in completing the six million cubic meters’ dam.
“The water that has filled the dam reached about two million cubic meters, which is considered one third of its full capacity,” said Boustani, noting that “this is the sixth dam to be completed in Lebanon.”Boustani stressed that dams are an essential need for Lebanon, adding that “without such dams, rain water would be wasted into sea.” She pointed to a national water and sanitation plan that has been modernized and is soon-to-be launched by the Water and Energy Ministry. Boustani indicated that the dam is currently in an experimental phase, whereby the remaining works will be finished within one to two years’ time. “Meanwhile, the dam’s water will be used for irrigation purposes, and upon the completion of works in the refining station, its water will reach 30 villages along the Batroun coast,” she added. Boustani concluded by assuring that “no dam is built in Lebanon without assessing the environmental impact within the necessary environmental conditions, and here nature has given the dam an additional tourism, environmental and sports value.”
Rahi during Epiphany Mass: To form a government free of politicians, partisans’ influence and narrow interests
NNA /January 06/2020
Maronite Patriarch, Cardinal Bechara Boutros al-Rahi, called Monday for forming a new government away from the influence of politicians and partisans who are held captives to their narrow interests and cheap calculations.In his religious sermon during Epiphany Mass in Bkirki today, al-Rahi said: “It is our duty to always address the consciences of political officials who are still impeding the birth of the new government. We remind them before the ‘Court of History’ that they are the ones who have brought Lebanon to the bottom at the level of its economy, finance and people’s daily living.”The Patriarch criticized politicians’ repeated violations of the constitution and the renewed national charter in the National Accord Document, while turning their deaf ears to the cry of trade unionists and the demands of the people’s uprising in all Lebanese regions for nearly eighty days now. Al-Rahi, thus, raised prayers to the Lord Almighty to help Lebanon escape its crises, first and foremost through having a government that is free of the influence of its political class.
Abu Ghazaleh denies a recording attributed to him: Lebanon’s economy, banking system and Lira have my complete trust
NNA /January 06/2020
President of the Talal Abu Ghazaleh International Group denied in an issued statement today a recent recording that was attributed to him regarding the Lebanese banking system and economy, which was circulated on various social media sites. Abu Ghazaleh stressed that the voice recording does not belong to him, affirming his “full confidence in Lebanon, its economy, its banking system and its pound.””My trust in Lebanon and Lebanese creativity is not shaken by passing events as a result of economic and political circumstances,” he said. “The Lebanese economy, the Lebanese banking system and the Lebanese pound are the object of my full confidence, and everyone who knows me knows my love for Lebanon and its people and my belief in its future,” Abu Ghazaleh underscored.
Aram I calls for new faces within cabinet ‘that inspire confidence and achieve reform’
NNA /January 06/2020
In his sermon celebrating the Armenian Orthodox Christmas on Monday, His Holiness Catholicos Aram I of Cilicia pointed to the necessity of having new faces within the cabinet “that would inspire confidence and achieve reform in the country.”He stressed the pressing need to form a new government that triggers confidence, “without which it would be impossible to lead the country towards prosperity and development,” while calling for “sparing Lebanon, as much as possible, the problems and interests of others.”Addressing a crowd of believers who attended today’s Mass marking the Armenian Christmas, His Holiness Aram I said: “Justice is the foundation of peace and the driving force for development, and the cornerstone for peaceful coexistence,” stressing that “where justice is absent, chaos reigns and devastation prevails, and where moral evils prevail, justice is defeated.””The main reason for the crises facing humanity today is the absence of justice,” said Aram I, criticizing states, institutions and people who implement their plans based on their narrow interests while ignoring justice, spreading evil around them and causing poverty, coercion, violence and wars. “For this purpose we stood by the people, because the Church is with justice and defends the rights of the people, as Jesus taught us and as the Church must be, and is called upon to complete the message of Jesus Christ,” he said, referring to the past months that have witnessed the people’s uprising against injustice, social inequality and waste of public money by state officials. “It is not enough to condemn injustice. Rather, we must fight for justice. This is what we expect from officials in Lebanon,” underlined His Holiness Aram I.
Bassil expresses solidarity with the Australian people
NNA /January 06/2020
Caretaker Minister of Foreign Affairs Gebran Bassil expressed his regret for the blazes that ravaged Australia and his solidarity with all its people. “With the bushfires raging across Australia that have had a devastating impact on the country’s unique flora and fauna, we express our solidarity with the Austrlian people, including tens of thousands of Lebanese origin,” Bassil said in his tweet Monday. He also instructed the Lebanese diplomatic missions in Canberra, Sydney and Melbourne to take the necessary steps to reassure and support the Lebanese in Australia under these circumstances
Dar Fatwa denies information on Derian’s choosing names for cabinet formation
NNA /January 06/2020
Grand Mufti Sheikh Abdul Latif Derian’s media bureau denied in an issued statement on Sunday the published news in a local newspaper and on social media that the Mufti “imposes or supports names to be represented in the next government.” The statement added the “published information is groundless, fabricated , fake, and inaccurate.”
Ghosn to Speak Publicly on Escape from Japan
Agence France Presse/Naharnet/January 06/2020
Former Nissan boss Carlos Ghosn will give a hotly awaited press conference in Lebanon on Wednesday, his spokesman said, offering clarity on his recent flight from Japan.Since arriving in his native Lebanon after skipping bail in Japan almost a week ago, the 65-year-old businessman has given few media statements. The circumstances of his flight from Japan, where he was under strict house arrest facing charges of financial misconduct, remain unclear. The press conference will be held in Beirut on January 8 at 1500 local time (1300 GMT), his spokesman told AFP without giving further details.
The Japanese government responded Sunday for the first time since his flight. “The escape of an accused on bail is unjustifiable,” Japan’s justice minister Masako Mori said in a statement. Before fleeing, Ghosn was awaiting trial over multiple counts of financial misconduct that he denied.
It was the latest twist in a saga that has gripped the business world and his escape from Japan has left authorities there red-faced and scrambling to defend their justice system from fierce international criticism. Ghosn’s high-profile arrest in November 2018 and his long detention under severe conditions were widely considered draconian compared with the West. He twice won bail by persuading the court he was not a flight risk — decisions seen as controversial at the time. Ghosn himself has said he left Japan because he was no longer willing to be “held hostage by a rigged Japanese justice system.”
Ghosn ‘Fled by Bullet Train’, Japan Vows to Bolster Borders
Agence France Presse/Naharnet/January 06/2020
New reports emerged Monday on how fugitive former Nissan boss Carlos Ghosn jumped bail in Japan, as the country’s justice minister said border controls would be bolstered after the escape. The 65-year-old executive skipped bail nearly a week ago, fleeing Japan where he was awaiting trial on multiple counts of financial misconduct that he denies. The details of his escape remain spotty, with Japan saying it is still investigating how he slipped past strict security measures imposed as part of his bail conditions. Citing sources close to the investigation, public broadcaster NHK said Monday that Ghosn left his residence by himself on the afternoon of December 29 and met two men at a Tokyo hotel. The three then boarded a “shinkansen” bullet train together from Tokyo’s Shinagawa station to a station in western Osaka, arriving around 7:30 pm. The trio then checked in at a hotel near Kansai Airport, but only the two men accompanying Ghosn were caught on security camera leaving the hotel later in the evening, NHK said. They were carrying “two big boxes” which were not checked by customs staff at the airport, the report added. Ghosn is believed to have taken a private jet from the airport that evening, bound for Istanbul, where he switched planes and continued to Beirut. But many details of his departure from Japan are still shrouded in mystery.
‘Wrongful methods’
The justice ministry said it did not have records of Ghosn departing Japan.
“It is believed that he used some wrongful methods to illegally leave the country,” Justice Minister Masako Mori said at a press conference on Monday. “I have instructed the immigration agency to further tighten the departure process,” she added. The Wall Street Journal has reported that Ghosn was loaded onto the flight from Osaka in a large case for audio equipment, which was later found at the back of the cabin. The newspaper cited unnamed sources close to the investigation in Turkey as saying that holes had been drilled into the bottom of the container to ensure the businessman could breathe.
Japan’s transport ministry told AFP that luggage checks are not mandatory for private jets. “Operators of private jets decide if luggage checks are necessary or not while airline operators are obliged to conduct security checks under Japan’s aviation law,” a ministry official told AFP.
“The security checks are carried out to prevent danger such as bombs, and to prevent hijacks,” he said, adding such risks are considered less likely for private jets. Ghosn, who has French, Brazilian and Lebanese nationalities, was able to enter Lebanon on a French passport, according to airport documents seen by AFP. A court in Tokyo had allowed Ghosn to keep a second French passport as he needed one to travel inside Japan, a source close to the matter has told AFP. Japan has launched a probe into the humiliating security lapse and prosecutors said they would “coordinate with the relevant agencies to swiftly and appropriately investigate the matter.” Ghosn has vowed to give his own account at a hotly awaited press conference in Beirut this week.
Report: Lebanese, U.S. War Veterans Orchestrated Ghosn’s Escape
Naharnet/January 06/2020
An American ex-soldier and a Lebanese former militiaman were on the plane that took off from Japan to Turkey with Carlos Ghosn on board, a media report said. Citing information obtained from Turkish authorities, French weekly Le Point said only two names appeared on the registers of the Osaka-Istanbul flight operated by MNG Jet — those of Michael Taylor and George Zayek, as revealed by U.S. daily The Wall Street Journal. The name of the third passenger, Carlos Ghosn, does not appear at all on the documents. Michael Taylor is American. He was born on Staten Island and is 59 years old. He began his career serving in the United States Special Forces as a paratrooper for four years. He arrived in Beirut in 1982 shortly after the assassination of President-elect Bashir Gemayel and the Israeli invasion. According to Le Point, he then began to train the Lebanese Forces militia and he maintains a “long-term relationship with the Christian community in Lebanon.”Taylor, who speaks fluent English and Arabic, later married a Lebanese woman and the couple lives in the suburbs of Boston. He has founded a security company called American International Security Corp (AISC), which employs ex-military and former secret service agents. It offers close protection services for people threatened or on hostile ground, as well as exfiltration services.
This former Green Beret had notably worked on the exfiltration of David Rohde, a journalist kidnapped in Afghanistan in 2008. Taylor shut down his company after trouble with American law and started another job. Zayek, the second man who helped Ghosn, who has not yet reached the age of 60, was also present in the jet which made the trip between Japan and Turkey. Zayek presents himself on the AngelList and Bayt websites as a “security manager” having worked in Iraq, Afghanistan, Libya, Egypt and Nigeria. In the section where he describes his skills, one reads “war, weapons, hostile lands.” Zayek is the youngest brother of Elias Zayek, a slain member of the Lebanese Forces. Elias was the commander of the LF’s infantry. He was assassinated on January 19, 1990. LF leader Samir Geagea was later convicted of ordering his murder. George Zayek meanwhile was a fighter with the Lebanese Forces during the war. He made several stays in hospital, wounded several times, notably in the eye and in the leg. Always discreet, George worked a lot in Iraq, notably for the American forces during the war of 2003. He also was involved in missions on behalf of private companies, organizing the protection of sensitive industrial sites in Iraq and other countries of the Middle East. Le Point said he is described as “a brave man who likes to live dangerously.”
Ghosn’s escape from Japan: New details
The Jazeera/January 06/2020
Former Nissan and Renault boss Carlos Ghosn began his astonishing escape from Japan with a bullet train ride from Tokyo to Osaka, possibly accompanied by several people, Japan’s Kyodo News reported Monday. Japanese authorities also said on Monday they may still press for Ghosn’s extradition from Lebanon to face multiple charges of financial wrongdoing, even though the country does not usually extradite its nationals. Security cameras captured Ghosn leaving his home on December 29 at about 2:30pm (05:30 GMT) and arriving some hours later at Tokyo’s Shinagawa Station, where he took the train to Shin-Osaka Station, Kyodo said, citing a person familiar with the matter. The international fugitive then went by car to a hotel near Osaka’s Kansai International Airport, where he boarded a private jet at 11:10pm, according to the media report.
Ghosn was forbidden from leaving Japan while awaiting trial on charges of financial misconduct, which he has denied, but he fled at the end of last year to escape what he called a “rigged” justice system. Prosecutors are now working with police to piece together Ghosn’s route and find out who helped him, Kyodo said. In the government’s first briefing since Ghosn skipped bail, Justice Minister Masako Mori said on Monday that as a general principle, Tokyo could request the extradition of a suspect from a country with which it has no formal extradition agreement. Such a request would need to be carefully examined based on the possibility of “guaranteeing reciprocity and the domestic law of the partner country”, Mori told reporters in Tokyo.Mori did not say what would guarantee reciprocity – the idea that benefits or penalties extended by one country to citizens of another should be reciprocated. She also did not say if there were any Lebanese nationals in Japan wanted in Lebanon.
Red notice
According to a Lebanese judicial source, Lebanon has yet to receive a formal notice from Interpol requesting Ghosn’s arrest and will not take any steps until it does. The source said on Monday that the so-called red notice it received last week had been sent directly from Japan rather than via Interpol’s headquarters in Lyon, France. “There are questions in Wiesbaden and Lyon over the legality of sending the notification directly from Tokyo to Lebanon without passing through Interpol headquarters,” the source said, referring to Interpol offices.
When Lebanon has received red notices in the past, suspects have not been detained, but their passports have been confiscated, and bail has been set, a judicial source said last week. Mori offered little insight into the events of Ghosn’s escape to his ancestral home, repeatedly saying she could not comment on specifics because of an ongoing investigation. Japanese officials broke days of silence about the Ghosn case on Sunday, saying they would tighten immigration measures and investigate his escape thoroughly. The authorities have also issued an international notice for his arrest. Mori also defended Japan’s justice system against Ghosn’s charges that it was “rigged” and discriminatory. In Japan, suspects who deny charges against them are often detained for long periods and subject to lengthy questioning without a lawyer present, a system critics call “hostage justice”.”Various comments about Japan’s justice system and this unjust departure are two different things,” Mori told reporters, saying criticism of the justice system could not be used to condone Ghosn’s escape. “Departure in an unjust way without proper procedure is tantamount to smuggling, an illegal departure amounting to a crime.”
Lebanon and Expectations on the ‘Iranian Response’
Hazem Saghieh/Asharq Al Awsat/January 06/2020
While the Lebanese were glued to their television screens, watching the news of the killing of Qassem Soleimani and Abu Mahdi al-Muhandis and its aftermath, a breaking news headline appeared on the screen: “Israeli planes fly at low altitudes over Sidon and the south”.
It seemed clear that the Israelis immediately started preparing themselves after they heard the news and the calls for retaliation and revenge. Prime Minister Benjamin Netanyahu cut short his trip to Greece and returned to Israel. The Defense Minister Naftali Benet called for an emergency meeting among his high-ranking officials, announcing that he would meet Chief of Staff Aviv Kochavi and the most prominent security officials at the military headquarters in Tel Aviv. Talk of the northern front returned to the forefront.
Obviously, Israel’s involvement is no secret. It brings back flashes of the nightmare of an Iranian-Israeli war fought in the Levant. Those who hate the Iranian regime and its behavior are aware that what Israel is doing will not further their interests, that it only acts against their interests. Death and destruction are the only prospects on the horizon in the region, especially in tormented Iraq.
However, what would be worse than Israeli interference in Lebanon is if there were intentions to call on the Israelis to interfere. Amos Harel, in his Op-ed for Haaretz, which opposes Netanyahu, writes that his state “has every reason to stay out of the escalating conflict, although regime in Tehran will try to storm Israel because of its ideological grudge against us”.
However, summoning an intervention through an “Iranian response” from Lebanon would almost be suicidal. It would harm the Lebanese people, especially Hezbollah and its milieu. For this reason, regardless of the rhetoric of the enthusiastic orators, the Secretary-General of the party was keen to avoid pledging anything specific in his statement. He said: “The just retribution for those who were killed by criminals, the worst villains in the world, will be the responsibility of all the resistance fighters and Mujahedeen throughout the world.” The word “all” means everyone, but it could also be seen to concern no one. According to the same logic, the Iranian Supreme National Security Council, which is aware that the available options are limited, claimed that “the response to the crime will cover the entire region and will be heavy and painful”.
Thus, given the precedence of Iran refraining from responding to the many Israeli strikes in Syria and Iran igniting wars through its proxies, it is useful to remind ourselves of well-established facts of the Lebanese situation:
First, war is an expensive project, and Iran, the presumed funder of this project, is bankrupt; on top of that, the killing of Soleimani will not suffice to quell its internal unrest.
Second, and in contrast to the 2006 war, no post-war Arab money will be received, and the bankrupt Lebanese state will not be able to provide any emergency support.
Third, and because of Hezbollah’s political behavior, especially since 2008, there will be no substantial communal receptions for civilian victims who may be displaced northward by another Israeli war.
Fourth, which is more accurate in the case of Iraq, any appearance of an appetite for war will be interpreted unambiguously as an appetite for counter-revolution. Advocates of war will be seen wanting Lebanon and Iraq to exclusively be war zones. Allegations, shared in the past few weeks, about the link between the Iraqi and Lebanese revolutions with “embassies and Americans” may form the base of rationalizations for repressive measures. In addition, a fighter, that is any fighter, must take his rival’s calculations into consideration. Netanyahu, who does not lack the desire or appetite to harm Iran and Hezbollah, is facing a very complicated general election, an election in which his personal future and reputation are on the line. Donald Trump, who will automatically support Israel, is also awaiting an election before which he hopes that the killing of Qassem Soleimani, after Abu Bakr Al-Baghdadi, will be equivalent to Barack Obama’s killing of Osama bin Laden in 2011, especially that the latter was defeated and hidden when he was killed, while Soleimani was wandering victorious between Imperial capitals.
This is not to say that Netanyahu and Trump’s wishes are necessarily fateful. But defeating those desires requires extraordinary Iranian power which is not available today, neither economically nor militarily. It is true that this force can carry out separate terrorist acts here and there, such as killing or kidnapping Americans, and bombing oil tankers, but those same actions may become, in light of the direct confrontation with Washington, a double-edged sword. Therefore, it is for the best that no one dies in the defense of the Iranian regime, especially that winning the war is impossible. Tehran, whether it will respond or not, has already lost many of its sources of power, and perhaps the last event was its entry point to the gradual loss of what remains of those sources of power. As for Lebanon in particular, the lower the zeal of some of its parties for the confrontation, regardless of its size, the lower the cost of pain and devastation that may follow.
Lebanon’s Economic Crisis: A Ten Point Action Plan for Avoiding a Lost Decade
A Citizen Initiative/Annahar /January 06/2020
The economic crisis is, at its core, a governance crisis emanating from a dysfunctional sectarian system that hindered rational policymaking and permitted a culture of corruption and waste.
BEIRUT: An independent group of development specialists, economists, and finance experts met in Beirut late-December to discuss the ongoing economic crisis and the path forward. This note summarizes the deliberations and puts forth a ten-point action plan meant to arrest the crisis and place the country on a path of sustained recovery.
How did we get here?
The economic crisis is, at its core, a governance crisis emanating from a dysfunctional sectarian system that hindered rational policymaking and permitted a culture of corruption and waste. The country, led by the public sector, lived beyond its means. Decades of pursuing this model left the economy with high debt and a bloated banking sector.Inevitably, the dramatic debt increase resulted in an-expanding debt-servicing burden. The large yearly funding needs rendered the country vulnerable to external and regional shocks. As external financial flows into Lebanon slowed, the central bank resorted to desperate and extremely expensive efforts to attract them. Ultimately, this proved unsustainable. Since October, we’ve had a virtual cessation of capital inflows and a sharp acceleration of outflows.
Where are we now?
This situation leaves the country with three simultaneous crises.
The first is a balance of payments and currency crises. For 2020, we estimate the gap between USD supply and USD demand at $8 billion. If this gap is not filled, the economy will experience difficulties including the servicing of external debt, imported goods’ shortages, currency devaluation, and economic contraction. The second crisis is that of public finance. Beginning with a 10 percent of GDP deficit in 2019, government revenues are now collapsing under the weight of the recession and the banking crisis described below. Inflation-adjusted spending is also crumbling. We estimate a $3 billion primary budget deficit (excluding interest payments) for 2020. In the current situation, funding this deficit will prove challenging. The third crisis is that of the banking system. With almost half of banks’ assets invested in Lebanese sovereign risk including with the Banque du Liban (BDL) and another quarter representing risky private sector claims, banks are effectively insolvent and illiquid. Despite the loose and inefficient capital and banking controls recently put in place, the sector is experiencing a deposit run. In similar international experiences, the central bank usually steps in and provides the liquidity that banks need. However, the BdL is constrained by its limited USD reserves and by fears that an oversupply of LBP would lead to further currency weakening.
Consequences of continuing on the current path
Persisting with the current ad hoc approach to policymaking will lead Lebanon on a path of implosion and political disintegration. We foresee seven consequences:
1. The economy will experience a deep recession. USD shortages will force the economy to adjust to lower imports. Bank and capital controls will hit a private sector that is dependent on liquidity and credit; business closures, salary reductions, and layoffs have already become common. The public sector will retrench given difficult financing conditions. Under this scenario, we forecast the economy will experience a double-digit contraction in 2020—i.e., a recession equivalent to what the US experienced during the Great Depression.
2. The Foreign Exchange (FX) will weaken sharply. The LBP will adjust downwards to bring the supply and demand of USD into balance. Left to its own devices, we estimate the FX could lose up to half its value leading to high inflation. In turn, this will have a massive negative impact on the cost of living, the availability of essential goods, food and healthcare, businesses and unemployment.
3. Capital and bank controls will intensify. Banks will continue rationing deposit withdrawals and external transfers. The private sector’s liquidity crunch will deepen and disorderly and un-managed debt defaults (including on Eurobonds) will prove inevitable. BdL will hemorrhage international reserves.
4. Debilitating social conditions will intensify. This kind of economic collapse will cause catastrophic wealth destruction. Poverty rates could rise to more than 40 percent of the Lebanese population with 1.6 million people unable to afford food and basic nonfood items. Unemployment will increase and much of the middle class could be eliminated.
5. A seismic political shift is likely to occur. The current political parties will not emerge unscathed. The security repercussions of social unrest will be significant and difficult to predict.
6. Without addressing the root causes, the crises will prove long-lasting. To put it in stark terms, this would become a decade long economic crisis—one from which chances of recovery are significantly dim. A “lost decade” will result from this scenario.
7. Finally, international financial support is likely to fall far short of what is needed to relieve the economy.
Is there a better approach?
We think there is. Below we outline a three-year program that aims to arrest the crisis, deal with its root causes and set the country back on a path of recovery. The program seeks to ensure equitable burden-sharing of the crisis’ fallout while protecting the most vulnerable especially during the period of transition. The ten concrete steps below should be implemented in parallel rather than piecemeal.
1. Establish an empowered economic emergency steering committee to design, negotiate and implement the program. In parallel, create participatory mechanisms to discuss with civil society the policy package, and to empower citizens to monitor its implementation.
2. Replace the ad hoc and self-administered capital and banking controls. Controls are likely needed for an extended period even in the best of scenarios. They need to be run in a centralized and transparent fashion backed by proper legislation.
3. Decisively deal with public sector debt. Immediately announce a moratorium on debt payments (external and domestic), hire legal counsel, and convene a creditor’s committee. Our view is that Lebanon’s fundamentals justify a debt load ranging between 60 and 80 percent of GDP over the medium term. To reach this target, creditors should be offered a menu of concessions including lower principal, reduced interest rates, and extended maturities.
4. Embark on a credible fiscal reform. Public spending, currently inefficient, wasteful, and vulnerable to corruption, must be transformed. The electricity sector is but one example. A wholesale governance and regulatory reform program are needed to curb the rent-seeking culture. These reforms, along with savings accruing from lower debt servicing, should allow for increased spending on social sectors and infrastructure. Second, a broad revenue reform is needed that focuses less on raising tax rates and more on addressing weak collection and overt reliance on specific sectors. Third, we recommend the adoption of a binding and credible “fiscal rule” that caps the size of future budget deficits.
5. Deal with private-sector debt. The private sector is facing a severe crisis. Convene a creditor/debtor roundtable to agree on a standardized menu of financial relief actions aiming to safeguard viable firms while orderly liquidating those that aren’t. The existing draft Bankruptcy and Restructuring law should be promptly passed.
6. Repair BdL’s balance sheet. BDL is a large lender to the government and has an estimated USD30 billion negative net FX position rendering it vulnerable to devaluations. Until this is dealt with, it is tough to see the confidence in the LBP returning.
7. Bring the banking sector back to health as a prerequisite to reinvigorating the economy. Public debt restructuring and mounting Non-Performing Loans (NPLs) will render many banks insolvent. Complicating matters, banks are highly exposed to the BdL who’s own balance sheet is impaired. Current bank equity is far from sufficient to cover these hits. Our estimates suggest $20-25 billion of fresh capital is urgently needed. Current shareholders need to assume the losses and be required to bring in fresh capital. This may also necessitate a reduction in the number of banks. In parallel, foreign loans and State assets could conceivably be used to recapitalize the sector (see below). As the above is not likely to be enough, there is a near-certain need for reducing portions of large deposits and swapping them into bank equity.
8. Preserve social peace through a focus on social justice. This involves the distribution of losses that are concentrated on the richest in society while sparing small bank depositors. Foreign funding should be used to blunt the pain of adjustment. A safety net must be put in place to fight poverty and support health and education. And workers should be helped to transition out of decaying sectors into those that benefit from the devaluation.
9. Re-think the FX/monetary policy mix. The fixed (and overvalued) exchange rate regime has contributed to large current account deficits, hurt export-oriented sectors, and forced BdL to maintain elevated interest rates. Looking forward, we recommend a more flexible exchange rate arrangement centered around a weaker LBP. However, until confidence in the LBP returns, it will be dangerous to allow the currency to freely float. Some form of currency management will have to maintain for the medium term.
10. Secure a multi-year Stabilization and Structural Reform Facility. We estimate that a three-year $25 billion fund is needed. This facility should be used to shore up BDL’s net reserves, help fund the immediate government budgetary needs, finance badly needed social spending, and contribute to bank recapitalization. The economic program recommended above can garner this kind of support, including from the World Bank, the EU, and the GCC. However, it will realistically require an IMF program as an umbrella. We also think there is scope to partly fund this facility with state assets and possibly hoped-for oil and gas revenues. We cannot overstate the importance of good governance, transparency, and accountability in this regard.
Conclusion
The consequences of the current path are catastrophic. Delays will only increase dislocation, exponentially magnify the needed adjustment, and place the burden on those least able to shoulder it. A better option is available. It won’t be easy, may at times prove painful and will certainly require a new social contract. But we sincerely believe this approach will pave the way for a better and prosperous future.
Signatories (in their personal capacities)
Firas Abi Nasif, Edward Asseily, Bilal Bazzy, Amer Bisat, Henri Chaoul, Ishac Diwan, Hanine el Sayed, Ali El Reda Youssef, Saeb el Zein, Nabil Fahed, Philippe Jabr, May Nasrallah, Paul Raphael, Jean Riachi, Nisreen Salti, Nasser Saidi, Sami Nader, Kamal Shehadi, Maha Yahya, Bassam Yammine, Gerard Zouein
