Lebanon’s Parliament resorts to makeshift solutions to prevent collapse

Tuesday’s legislative session reflected the chaos and confusion that Lebanon is experiencing. (Shutterstock)
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Updated 26 July 2022
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Lebanon’s Parliament resorts to makeshift solutions to prevent collapse

  • The session highlight was the approval of an amendment to the banking secrecy law, which had been discussed in the presence of US ambassador to Lebanon Dorothy Shea

BEIRUT: Tuesday’s legislative session reflected the chaos and confusion that Lebanon is experiencing, with caretaker Prime Minister Najib Mikati and Parliament Speaker Nabih Berri tossing the issue of scrapping subsidies on wheat like a hot potato.

The session highlight was the approval of an amendment to the banking secrecy law, which had been discussed in the presence of US ambassador to Lebanon Dorothy Shea, as it falls within the reforms demanded by the international community as a condition for helping the country.

“Approving the amendment to the banking secrecy law should be perceived positively by the international community,” said MP Ibrahim Kanaan. “We expect the government to restructure the banks to go in line with what we have adopted. The capital control law also needs to be amended and the government is required to work seriously in this regard.”

During the session, which included several debates and fiery responses, Mikati addressed an item on the agenda regarding an approval request for a $150 million World Bank loan agreement to implement an emergency response project to secure wheat supplies. “Most of the bread bundles that are produced with subsidized flour go to non-Lebanese, and everyone knows that.”

He told MPs: “If you want to lift subsidies on wheat, and you want the government to do so, issue a recommendation from parliament in this regard.” Berri refused to do so.

Caretaker Economy Minister Amin Salam said if subsidies on wheat were lifted that the price of a bread bundle would range between LBP30,000 LBP (around $1) and LBP35,000.

“Under the agreement with the World Bank, the mechanism for implementing the loan will begin in the coming weeks to secure the necessary funds, and thus secure a social safety net,” he noted.

Dozens of bakeries ran out of bread on Tuesday due to the lack of flour, which is now being sold on the black market at exorbitant rates. What bread was available was snapped up by people who rushed to bakeries in the early hours of the morning, depriving others of the hope of finding any during the day.

People often insult the state or Syrian refugees, blaming them for what is happening.

Salam said Syrian refugees consumed about 40 percent of the imported subsidized wheat: 500,000 bundles of bread a day.

Mikati told MPs: “The government is seeking to address the issue of public sector employees who have been on strike for over a month to provide solutions within the available capabilities.

“We are spending within limits amid the lack of resources. We are waiting for the finance minister’s report on the cost of the salary increases. We do not want to give with one hand and take with the other to avoid inflation.”

MP Hadi Abu Al Hassan said: “The ongoing strike is paralyzing the country. Parliament ought to discuss the 2022 draft budget, otherwise, we are heading toward more inflation. If the issue is the absence of a unified exchange rate, then the government ought to suggest to parliament a fixed rate for it to discuss. We want a draft budget law and a recovery plan, instead of spending while having no revenues and thus worsening the crisis.”

MP Waddah Al-Sadiq said: “Tuesday’s session was about coming up with temporary solutions while the ship sinks further. The entire country is facing economic collapse. The rescue process begins with an economic plan, followed by a budget emanating from the plan, and finally approving laws. Our governments work backward.”

Among the items approved by parliament was forming a supreme council for the trial of presidents and ministers, consisting of seven MPs from different sects. Berri insists that this council, not the judiciary, try the defendants, including former ministers and current MPs, accused of being involved in the Beirut port explosion.

This followed a protest organized by the families of the victims in the vicinity of parliament, in opposition to forming this council.

They also demanded that the partially destroyed wheat silos be preserved as a silent witness to the crime.

“Forming this council is an attempt to escape from the judicial investigation, to prevent the prosecution of defendants in any crime,” the families of the victims said.

Caretaker Minister of Environment Nasser Yassin, a member of the ministerial committee in charge of reviewing the silos’ status, told Arab News: “The silos are tilting. We put sensors in coordination with French experts to study this tilting movement, which began with the explosion in 2020 and increased with time, especially with the ongoing fires erupting inside the structure due to the summer heat and humidity. The silos are tilting more now, about 2.5 millimeters per hour. We fear part of the remaining structure could cave in and result in catastrophic consequences.”

On Monday evening, the Ministry of Health warned people living within a 500-meter to 1,500-meter radius that “in the case of any collapse or a partial collapse of the silos, dust that is the result of construction leftovers and some fungus from rotten grains will be released and will spread in the air.”


Lebanon central bank seeks to recuperate embezzled funds to bolster liquidity, governor says

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Lebanon central bank seeks to recuperate embezzled funds to bolster liquidity, governor says

  • The central bank had filed a criminal complaint against an unnamed former official of the central bank
  • Souaid said the bank would become a primary plaintiff in the state’s investigation against Forry Associates

BEIRUT: Lebanon’s central bank will seek the repayment of public funds embezzled by at least one former central bank official and by lawyers and commercial bankers, to help guarantee its liquidity, Central Bank Governor Karim Souaid said on Thursday.
Souaid did not name Riad Salameh, the former central bank governor whose 30-year term ended in disgrace amid investigations into whether he embezzled more than $300 million between 2002 and 2015.
Instead Souaid told reporters that the central bank had filed a criminal complaint against an unnamed former official of the central bank, a former banker and a lawyer over alleged illicit enrichment through misuse of public funds.
He ⁠said the operations were carried out through four offshore shell companies in the Cayman Islands that he did not name.

COORDINATING WITH FRENCH INVESTIGATORS
Souaid said the bank would become a primary plaintiff in the state’s investigation against Forry Associates, suspected of receiving commissions from commercial banks and transferring them out of the country.
Forry is controlled by Salameh’s brother, Raja. Both ⁠Raja and Riad Salameh deny wrongdoing.
The pair are under investigation in France, Germany, Switzerland and other countries over the alleged embezzlement. Souaid said he would travel to France to meet with the investigators this month “to exchange highly sensitive information held by the French authorities.”
Souaid would not say how many people in total were suspected of involvement in the scheme or the full sum now thought to have been embezzled.
“Our mission is to pursue these individuals and entities, seek their conviction, and seize their movable and immovable assets and the proceeds of ⁠their illicit activities to ensure liquidity for the rightful owners, first and foremost the depositors,” he said.
A Lebanese source familiar with the central bank’s new measures said they were prompted by lots of evidence — both new material uncovered in the central bank’s records and other evidence made available from external investigators.
The source said the bank’s leadership suspected Salameh was aided in his scheme by other members of the institution.
Salameh was detained for nearly 13 months over the alleged financial crimes committed during his tenure, and was released last September after posting a record bail of more than $14 million.
He remains in Lebanon under a travel ban.