Lebanon needs $12-15 bn to kickstart recovery: central bank chief

Lebanon’s Central Bank Governor Riad Salameh gives an interview with AFP at his office in the capital Beirut on Monday. (AFP)
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Updated 21 December 2021

Lebanon needs $12-15 bn to kickstart recovery: central bank chief

  • Lebanon is grappling with an unprecedented economic crisis branded by the World Bank as one of the planet's worst since the mid-19th century
  • "Our quota in the International Monetary Fund is four billion," Salameh said in an AFP interview

BEIRUT: Lebanon needs to receive $12-15 billion from its partners to kickstart its economic recovery and shore up fast-diminishing foreign currency reserves, Central Bank Governor Riad Salameh said Tuesday.
Lebanon is grappling with an unprecedented economic crisis branded by the World Bank as one of the planet’s worst since the mid-19th century.
More than 80 percent of the population lives in poverty and the currency has lost more than 90 percent of its black market value amid political squabbling that has delayed an agreement with the International Monetary Fund.
“Our quota in the International Monetary Fund is four billion,” Salameh said in an AFP interview.
“If countries add to it, we could reach 12 to 15 billion, an amount that could help start Lebanon’s recovery and restore confidence,” he said.
Lebanon defaulted on its debt for the first time last year but political leaders have continued to resist key reforms demanded by donors to unlock necessary funds.
The central bank’s mandatory dollar reserves have been slashed by more than half, according to Salameh, who is widely viewed as a key culprit behind an economic crash many blame on central bank policies.
“The mandatory reserves are around $12.5 billion,” that the central bank can’t spend, Salameh said, explaining that an additional $1.5 billion in reserves had been freed up for central bank spending.
The mandatory reserves stood at $32 billion before the start of the economic crisis in 2019.
Salameh dismissed criticism blaming him for the crisis, saying that “had it not been for the central bank and its reserves, Lebanon would not have been able to carry on.”
“The central bank deals with the outcome of the crisis. It is not the side causing it.”
The fast-diminishing reserves are threatening a subsidy program that had initially covered fuel, medicine, flour and other vital imports before it petered out.
The central bank can afford to finance partial subsidies on a few remaining key imports for “around six to nine months,” if no additional measures are taken to combat the depreciation of the Lebanese pound, Salameh said.
The only new usable foreign currency injections that the central bank has access to come in the form of IMF Special Drawing Rights (SDR) allocations received this summer, a former central bank official and a former adviser to the finance ministry both told AFP.
“We do not know how they are being used as there is a total lack of transparency and disclosure,” the ex-central bank official told AFP on the condition of anonymity.
Officially pegged at 1,507 to the greenback since 1997, the Lebanese pound sold for nearly 30,000 to the dollar on the black market earlier this month, a record low.
The official fixed rate is “no longer realistic,” Salameh said, while explaining that a unified exchange rate would be unlikely in the absence of an IMF agreement and political stability.
Lebanon last year started IMF talks that were derailed due to differences between officials over the size of financial sector losses.
But IMF talks have resumed in recent weeks during which Lebanese officials have agreed that financial sector losses amount to around $69 billion.
“Lebanon is still in the stage of crunching numbers,” said Salameh who is part of Lebanon’s IMF negotiating team.
“The Lebanese side hasn’t yet presented a plan to the IMF for discussion.”
Salameh, one of the world’s longest-serving central bank governors, is facing judicial investigations in France, Switzerland and other European countries on suspicion of money laundering and illicit enrichment, among other allegations.
Salameh dismissed the cases against him as unfounded and lacking in evidence, claiming they were opened based on complaints filed by Lebanese citizens “for reasons that could be political... or tied to certain interests.”
He said that a top-tier financial audit firm had scrutinized his accounts at his request and presented him with a report that he then submitted to officials and judges.
“I am ready to cooperate with all investigations,” he said, claiming they were based on “fabricated evidence” that made it seem as though he “took all of Lebanon’s money and pocketed it.”

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Israeli transport firm apologizes after Palestinians kicked off bus

Updated 20 sec ago

Israeli transport firm apologizes after Palestinians kicked off bus

  • 3 Jewish passengers refused to travel with Arabs
  • Company: Driver swayed by ‘racist manipulation’

LONDON: An Israeli public transport firm has issued an apology after a racist incident in which 50 Palestinian workers were removed from a bus following complaints from Jewish customers. 

The incident in Tel Aviv sparked controversy after reports that three Jewish passengers boarded in an ultra-Orthodox suburb of the city and refused to share the bus with Arabs. 

The bus firm, Tnufa, said one of the Jewish passengers conned the driver into believing that he was an official from the Transport Ministry, and threatened the driver.

Israelis and Palestinians use the bus to go to and from the West Bank, the BBC reported, adding that Israeli law prohibits segregated services.

Tnufa said the driver was inexperienced and had been swayed by “racist manipulation.” It added that one of the Jewish passengers falsely claimed that the Transport Ministry had ordered that Arabs needed to be kicked off the route.

“The new driver said he argued with the imposter, but he told him that he could lose his job or receive a large fine if he did not follow the instructions immediately,” Tnufa said.

“The company apologises to the passengers for the unfortunate incident,” Tnufa’s CEO Mikhael Kopilovsky said in a statement, adding that “many of our drivers and workers at the company are Arabs.”


New buyer sought for first grain to leave Ukraine under deal

Updated 10 August 2022

New buyer sought for first grain to leave Ukraine under deal

  • The Sierra Leone-flagged vessel Razoni left the Ukrainian port of Odessa on August 1
  • A five-month delay after Russia’s invasion of Ukraine “prompted the buyer and the shipping agent to reach agreement on the cancelation of the order”

BEIRUT: A new buyer is being sought for the first grain shipment to leave Ukraine under a hard-won deal with Russia after the original Lebanese buyer canceled its order, the Ukrainian embassy said.
The Sierra Leone-flagged vessel Razoni left the Ukrainian port of Odessa on August 1 carrying 26,000 tons of maize and had been expected to dock in the Lebanese port of Tripoli at the weekend.
But now the keenly anticipated shipment is looking for a buyer after the shipping agent agreed to a request to cancel the original order in the light of the long delay in delivery.
A five-month delay after Russia’s invasion of Ukraine “prompted the buyer and the shipping agent to reach agreement on the cancelation of the order,” the Ukraine embassy said in a statement late Tuesday.
The agent is now studying alternative bids for the maize before deciding on its destination, the embassy added.
The Razoni is currently anchored off the Turkish port of Mersin, according to the Marine Traffic website.
Another ship docked in Turkey Monday with a cargo of 12,000 tons of Ukrainian maize, becoming the first to reach its destination under the deal with Russia brokered by the United Nations and Turkey.
The agreement lifted a Russian blockade of Ukraine’s ports and established safe corridors through the naval mines laid by Kyiv to ward off any amphibious assault by Moscow on its coast.
Ukraine said Monday it was “optimistic” that the millions of tons of wheat and other grain that had been trapped in its silos and ports could now be exported, in a major boost for world food supplies.

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Iraq launches Mosul airport reconstruction

Updated 10 August 2022

Iraq launches Mosul airport reconstruction

  • The airport, which was heavily damaged in the battle, had been disused since the extremists seized Mosul and adjacent areas in 2014

MOSUL: Iraqi Prime Minister Mustafa Al-Kadhemi on Wednesday inaugurated the reconstruction of Mosul international airport, still in disrepair five years after the battle that expelled Daesh from the city.
Entire sectors of the northern metropolis have remained in ruins since the July 2017 recapture of Mosul by Iraqi forces backed by a US-led multinational coalition.
The airport, which was heavily damaged in the battle, has been disused since the extremists seized Mosul and adjacent areas in 2014.
Kadhemi, in an official ceremony at the airport on the southern outskirts of Mosul, laid the foundation stone for its renovation.
Airport director Haider Ali told AFP that the reconstruction has been assigned to two Turkish companies and is expected to take 24 months.
Despite the slow pace of reconstruction, the city of 1.5 million inhabitants has regained a semblance of normality: shops have reopened, traffic jams are back and international agencies have been funding restoration projects for historic sites.
But huge challenges remain.
At the end of 2021, the Red Cross estimated that 35 percent of west Mosul residents and less than 15 percent in east Mosul, which bore the brunt of the fighting, have enough water to meet their daily needs.
Kadhemi, quoted in a statement issued by his office, said that “huge efforts” were being made to rebuild the city.
In January, a provincial official spoke of a $266-million budget for major reconstruction projects, notably in the health, education and transport sectors for 2021-2022, according to the state news agency INA.


Iran scoffs at claims Russia-launched satellite for ‘spying’

Updated 10 August 2022

Iran scoffs at claims Russia-launched satellite for ‘spying’

  • The satellite, called Khayyam, was launched into space from the Russian-controlled Baikonur Cosmodrome
  • Iran insists its space program is for civilian and defense purposes only, and does not breach the 2015 nuclear deal

TEHRAN: Iran dismissed as “childish” Wednesday claims by the United States that an Iranian satellite launched by Russia is intended for spying.
The satellite, called Khayyam, was launched into space on a Soyuz-2.1b rocket from the Russian-controlled Baikonur Cosmodrome in neighboring Kazakhstan on Tuesday.
Responding to the launch, Washington said Russia’s growing cooperation with Iran should be viewed as a “profound threat.”
“We are aware of reports that Russia launched a satellite with significant spying capabilities on Iran’s behalf,” a US State Department spokesperson said.
The head of Iran’s Space Agency, Hassan Salarieh, told reporters Wednesday that the spying allegation was “basically childish.”
“Sometimes, some comments are made to incite tensions; saying that we want to spy with the Khayyam satellite... is basically childish,” he said.
“The Khayyam satellite is entirely designed and built to meet the needs of the country in crisis and urban management, natural resources, mines, agriculture and so on.”
Ahead of the launch, there was speculation that Russia might borrow Iran’s satellite temporarily to boost its surveillance of military targets in Ukraine.
Last week, The Washington Post quoted anonymous Western intelligence officials as saying that Russia “plans to use the satellite for several months or longer” to assist its war effort before allowing Iran to take control.
Iran’s space agency stressed on Sunday that it would control the satellite “from day one” in an apparent reaction to the Post’s report.
The purpose of Khayyam is to “monitor the country’s borders,” enhance agricultural productivity and monitor water resources and natural disasters, according to the space agency.
Khayyam is not the first Iranian satellite that Russia has put into space.
In 2005, Iran’s Sina-1 satellite was deployed from Russia’s Plesetsk Cosmodrome.
Iran insists its space program is for civilian and defense purposes only, and does not breach the 2015 nuclear deal, or any other international agreement.
Western governments worry that satellite launch systems incorporate technologies interchangeable with those used in ballistic missiles capable of delivering a nuclear warhead, something Iran has always denied wanting to build.
Iran successfully put its first military satellite into orbit in April 2020, drawing a sharp rebuke from the United States.


Iran navy says repelled attack on ship in Red Sea

Updated 10 August 2022

Iran navy says repelled attack on ship in Red Sea

  • Navy escort flotilla was headed by the destroyer Jamaran

TEHRAN: An Iranian naval flotilla thwarted an overnight attack on an Iranian vessel in the Red Sea, a senior commander said Wednesday.
“The escort flotilla of the naval arm of Iran’s armed forces, headed by the destroyer Jamaran... promptly deployed to the scene last night after receiving a request for help from an Iranian ship in the Red Sea, and engaged with the attacking boats,” said the navy’s deputy head of operations, Rear Admiral Mustafa Tajeddini.
“Thanks to the effective (naval) presence and after heavy exchanges, the attacking boats made off,” he told state television.
Tajeddini did not give details of the ship which was targeted or of who was suspected of mounting the attack.
In November 2021, pirates attempted to seize an Iranian oil tanker in the Gulf of Aden, ISNA news agency said at the time.
Two weeks earlier, an Iranian warship repelled an attack by pirates against two oil tankers that it was escorting in the Gulf of Aden.
Like other countries dependent on the shipping lane through the Red Sea and Suez Canal, Iran stepped up its naval presence in the Gulf of Aden after a wave of attacks by Somalia-based pirates between 2000 and 2011.
But the number of attacks has fallen sharply in recent years.