Throughout the past month, Lebanon has been overwhelmed with protests against the ruling elite which are affecting the country’s economy. The country is striving to stay on top of the crisis rather than sink into a sea of political struggles and economic mayhem. Accordingly, Lebanese banks, which have mostly been closed since protests began, on Sunday, November 17th announced emergency measures on the movement of capital.
The Association of Banks in Lebanon agreed a set of temporary directives for commercial banks and has limited foreign currency withdrawals to $1,000 a week from US dollar accounts. Lenders also said that the transfer of funds outside the country will be allowed only for urgent personal expenses and asked clients to use their credit cards for other financial needs.
According to a statement issued by the Association, these measures will “facilitate, standardise and regulate” the work of bank employees in light of the country’s current exceptional circumstances. The measures come after consultations with Lebanon’s Central Bank.
Banks have been closed since protests erupted on October 17th; they re-opened for a few days on November 1st, then reclosed over security and safety concerns. However, they are now set to reopen on Tuesday as staff ended a one-week strike over security concerns posed by clients demanding their cash and protests at branches.
A union representing bank staff cited an interior ministry security plan and the newly declared measures announced by the banking association as the reason for the decision to go back to work.
According to Reuters, Lebanese Parliament Speaker Nabih Berri on Monday, November 18th likened the situation of Lebanese people to that of passengers on the Titanic, the passenger liner that sank in 1912 after hitting an iceberg. He said the country would go under unless action is taken and called for the swift formation of a new government.
On Saturday, former Minister of Finance Mohamed Al-Safadi withdrew his candidacy for next prime minister, citing the difficulty of forming a new government that would be accepted by the country’s main political parties and angry protesters as well.
Al-Sadafi emerged as a candidate after Saad Hariri quit as prime minister on October 29th. Hariri said he would only return as prime minister of a cabinet of specialist ministers capable of securing international aid and saving Lebanon from crisis.
Protesters have rallied all over the country, waving flags and chanting slogans expressing their rejection of Al-Safadi’s nomination.
According to the New York Times, economic experts and analysts are not optimistic about the country’s prospects as a speedy solution to the country’s agonies has not yet appeared on the horizon. Experts take the view that Lebanon’s economic crisis has built up over many years and that therefore the only way to fix it is with painful long-term policies.
Nasser Saidi, a former Lebanese Economy Minister, told the New York Times that the real problem is that the current policies are unsustainable. Putting the country on the right track requires both dealing with a large budget deficit and bringing down public debt — a gargantuan task. “You really don’t have much choice,” he said. “You are at the edge of the precipice and you are looking down, so unless you do that, where is this going to end?”
Any new government that is not accepted by protesters will struggle to put in place meaningful policies, said Michael Young, a senior editor at the Carnegie Middle East Center in Beirut. “Any government that would not fulfill people’s demands is going to start basically in a hole,” he said. “It will be a government that is opposed by the people and it will have little legitimacy to impose reforms.”