Can new central bank chief kick off Lebanon’s long-awaited economic transformation?

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Among the many people who have held protests outside the headquarters of Lebanon’s central bank office in Beirut this year are retired soldiers, who demanded inflation adjustments to their pensions on March 30, 2023. (AFP file)
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Updated 03 August 2023
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Can new central bank chief kick off Lebanon’s long-awaited economic transformation?

  • Wassim Mansouri has daunting task of establishing new rules for monetary dealings between government and central bank
  • Amid Lebanon’s political deadlock, there is no guarantee he will succeed where the outgoing governor Riad Salameh failed

BEIRUT: Wassim Mansouri, the first vice governor of Banque du Liban, Lebanon’s central bank, assumed the responsibilities of former governor Riad Salameh on Monday, ushering in a period of cautious optimism and sparking hopes of a belated return to fiscal responsibility.

Amid the worst financial crisis in the country’s history, made worse by years of asset stripping by the nation’s political elite, Mansouri faces the daunting task of restoring the credibility of the long-abused central bank.

“It is necessary to put an end to the policy of government borrowing from the central bank and limit the process to matters of emergency only, and for a limited period of time, provided that it is legalized,” Mansouri said on his first day in office.




Wassim Manssouri, Lebanon's acting central bank governor, speaks during a press conference at the bank's headquarters in Beirut on July 31, 2023. (AFP)

This was his attempt to establish new rules for monetary dealings between the government and the central bank, to bring fiscal policy back in line with Lebanon’s Code of Money and Credit, which was established in 1963.

Mansouri aims to secure legal and legislative cover for his conditions, from both the executive and legislative authorities, to continue financing the government while exempting himself from the possibility of any subsequent responsibility.

He called for the implementation of fiscal reforms within six months, which should include approval of the budget for 2023-24, the adoption of capital controls, a restructuring of banks, and enforcement of financial discipline.

Financial markets reacted positively to the news of Salameh’s departure after a checkered 30-year stint. The value of the US dollar fell against the Lebanese pound, dropping from 99,000 to 88,500 in the week before he stepped down.




Lebanon's failed former central bank governor Riad Salameh. (AFP file photo)

It feels like a breath of fresh air has just blown from a hole that has opened suddenly in a thick, impenetrable wall that was built between the central bank and literally the whole world,” George Kanaan, CEO of the Arab Bankers Association, told Arab News.

“Suddenly we are told that he is willing to provide statistics, he is willing to work with the government, he is willing to inform the parliament, he is willing to discuss things, he wants matters legalized under proper legislation to allow him to work.

“(This is) nothing like the old times. This is a great new beginning. The question, though, is what needs to follow immediately? The answer is a series of reforms, starting with legislative reforms. And then we can begin to see how the crisis will eventually come to an end.

“However, there is a reason why they have been blocked, as the political class in Lebanon does not see that they are necessary, or they believe that, if implemented, the reforms will harm them. And in that case the spring will be short lived.”

Indeed, there is no guarantee that Mansouri will succeed. There is no proposed law that would allow the central bank to lend money to the state in a way that provides legislative cover. And there is no indication of the possibility of a parliamentary session to pass such draft legislation.

Caretaker Prime Minister Najib Mikati has not presented a draft law that would allow the government to borrow foreign currencies from the bank. According to local media reports, he hesitated to do so “due to its unlawfulness,” putting the ball in parliament’s court.

The policy of lending by the central bank to the state has been a fundamental cause of the depletion of monetary reserves and the collapse of Lebanon’s once-flourishing banking and financial sectors, compounded by the government’s failure to implement reforms and curb waste and corruption.

The government is currently seeking a loan of up to $1.2 billion over six months to cover the salaries of public sector, military and security personnel, the cost of essential imports, and interventions in the market when necessary.

Can Mansouri succeed where Salameh failed? The government is in prolonged caretaker mode and the parliament remains deeply divided, making it difficult to pass any legislation that might prove controversial. Meanwhile, the central bank’s reserves, according to financial references, now stand at only between $9 billion and $10 billion.

Parliament is split into factions, including the Lebanese Forces, the Lebanese Kataeb, reformist MPs, and some independent MPs, who refuse to pass laws in the absence of a president. The president’s office has been vacant since Michel Aoun’s term ended in October last year as the parliament cannot agree on a successor. They will therefore likely boycott the legislative session if it is scheduled.




The Lebanese pound has plumbed new depths against the US dollar. (AFP file photo)

Some factions, such as the Free Patriotic Movement, have set conditions for attending sessions, while others, notably the Amal movement and Hezbollah, have shown little enthusiasm for them at all.

Asked whether Mansouri will be able to enact change, given this state of political paralysis, Kanaan noted that the new governor does have allies who want him to succeed.

“He is not alone,” Kanaan said. “There are a lot of people who support him. On his own he cannot do it. On his own, he and the other vice governors will probably be forced to leave if they insist on the reforms.

“I think there are other parties in Lebanon, but not necessarily political bodies, that want the reforms done. Certainly, the whole word outside of Lebanon is crying out for those reforms. Everybody wants those reforms.

“Lebanon right now is witnessing a flow of liquidity and a positive economic atmosphere, which is pointing in an upward direction, and that releases pressure for reforms. Everybody would say, if things are going okay, why do we need reforms since things will eventually go in the right direction without the need of those reforms. And this would be unfortunate.”




Retired servicemen clash with soldiers outside Lebanon's central bank during a demonstration demanding inflation-adjustments to their pensions, in Beirut on March 30, 2023. (AFP)

Mansouri has been cautious during his first few days in office and has refrained from making any further statements to the media, leaving time for “action,” as members of his entourage put it. But this means it is hard to predict what the ultimate outcome will be.

Fadi Khalaf, the secretary-general of the Association of Banks in Lebanon, told Arab News: “It is too early to comment on the policy that the central bank’s deputy governor intends to pursue. We are currently in a monitoring and waiting phase.”

Regarding the legacy of Salameh, whose term as governor was renewed four times between the era of the late President Elias Hrawi and that of Aoun, there is no denying he enjoyed the support of most political factions.

Despite his constant objections to policies adopted by the ruling political elite, he continued to cover the Lebanese state’s deficits and operating expenses.

One of the biggest expenses borne by the central bank was the cost of electricity generation, which ran as high as $2 billion annually. The money was handed over in the form of treasury advances that went to the Ministry of Energy, without ever being paid back to the bank.




A woman stands with a sign during a protest by the Depositors Solidarity Union group protesting against the Lebanese Central Bank's monetary policies outside the bank's headquarters in Beirut on June 23, 2023. (AFP)

This prompted Salameh to halt the process in 2020. The electricity sector continues to be the biggest burden on the bank’s mandatory reserve, as well as on the already empty state treasury.

Although the conflict and crisis in neighboring Syria created tough economic challenges for Lebanon, Salameh’s financial legerdemain shielded the country from many of the repercussions, until the financial crisis of 2019 struck.

This brought about the unraveling of the banking sector and the deterioration of the dollar-exchange rate, in a crisis that grew worse when former Prime Minister Hassan Diab’s government defaulted on Lebanon’s foreign debt in 2020.

One banking expert, who spoke to Arab News on condition of anonymity, believes that borrowing “will continue, whether directly or in accordance with the law,” largely continuing Salameh’s legacy.

“(The central bank’s) dollars will go to the state’s expenditure items, but what is required is improvement of the state’s finances and rationalization of spending of dollars,” the expert said.

Mansouri’s window of opportunity for implementing meaningful change is small.

“Not very long — I would say it is a matter of weeks,” said Kanaan.

“In a few weeks’ time, he either makes a step in the right direction, accompanied by all sorts of other reforms, and then we are making real headway in the right direction. Or he leaves. That’s the second alternative. Or he buckles and performs his duties just like Riad was doing before him.”

 


King Abdullah, Bulgarian president co-chair Aqaba Process meetings in Sofia

Updated 7 sec ago
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King Abdullah, Bulgarian president co-chair Aqaba Process meetings in Sofia

  • Initiative aims to bolster cooperation on security, counterterrorism issues
  • King held separate talks with several regional leaders on sidelines of event

LONDON: King Abdullah II of Jordan and Bulgarian President Rumen Radev co-chaired the third round of the Aqaba Process meetings in Sofia on Friday, bringing together international leaders to address pressing security challenges in the Balkans and beyond, the Jordan News Agency reported.

The Aqaba Process Balkans III forum, jointly organized by Jordan and Bulgaria, tackled issues such as regional security, counterterrorism efforts, online radicalization and illegal migration. The participants also explored opportunities for greater international cooperation, including intelligence sharing and strategic partnerships in combating extremism.

Attending the event were heads of state, government officials and security representatives from Serbia, Albania, North Macedonia, Montenegro, Slovenia, Kosovo, Bosnia and Herzegovina, Croatia, Spain, Greece, Italy, France, the UK, US and Japan.

Prince Ghazi bin Muhammad, King Abdullah’s personal envoy and chief adviser on religious and cultural affairs, was among the attendees, while several international organizations, including the EU, Interpol, Global Internet Forum to Counter Terrorism and the Organization for Security and Cooperation in Europe, were also represented.

On the sidelines of the forum, King Abdullah held meetings with several regional leaders, including Slovenian President Natasa Pirc Musar, Albanian President Bajram Begaj, Kosovan President Vjosa Osmani-Sadriu, North Macedonian President Gordana Siljanovska Davkova, Montenegrin President Jakov Milatovic and Serbian President Aleksandar Vucic.

Launched by the king in 2015, the Aqaba Process is designed to enhance coordination between regional and international actors in the fight against terrorism and extremism. It fosters military, security and intelligence cooperation, focusing on counterterrorism strategies and the exchange of expertise.

Previous meetings have been hosted by Jordan, Albania, Brazil, Indonesia, the Netherlands, Nigeria, Norway, Rwanda, Singapore, Spain, the US and the UN General Assembly.

Discussions have covered diverse regions such as East Africa, Southeast Asia, Latin America, West Africa and the Sahel.


In Tunisia, snails inch toward replacing red meat as people turn to cheaper protein

Updated 46 min 22 sec ago
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In Tunisia, snails inch toward replacing red meat as people turn to cheaper protein

  • Snails have been consumed in Tunisia for more than seven millenia
  • Low in fat and high in iron, calcium and magnesium, snails offer both nutritional value and economic relief

AKOUDA, Tunisia: In fields outside their hometown in central Tunisia, an increasing number of unemployed young men are seeking a new way to make a living, picking snails off of rocks and leaves and collecting them in large plastic bags to take to the local market to be sold.
More and more people, they say, are buying the shelled wanderers as the price of market staples remains high and out of reach for many families.
“They’re profitable, beneficial and quite in demand,” said Karim, a 29-year-old snail seller from the village of Akouda said.
Snails have been consumed in Tunisia for more than seven millenia, according to research published last year in the journal Archaeological and Anthropological Sciences. In today’s world considered mostly a bistro delicacy, they’re again gaining traction in Tunisia as a practical alternative to red meat — a protein-rich substitute that pairs perfectly with salt, spices, and bold seasonings.
The snails are a lifeline for some in Tunisia, where youth unemployment now hovers above 40 percent and inflation remains high, three years after spiking to its highest levels in decades. A lack of opportunity has fueled social discontent throughout the country and, increasingly, migration to Europe.
Low in fat and high in iron, calcium and magnesium, snails offer both nutritional value and economic relief. In a country where unemployment runs high and median wages remain low, they cost about half as much as beef per kilogram and often less when sold by the bowl.
“Snails are better for cooking than lamb. If lamb meat costs 60 dinars ($19.30), a bowl of snails is five dinars ($1.60),” a man named Mohammed said at the Akouda market.
As the price of meat and poultry continues to rise, more Tunisians are turning to affordable, alternative sources of protein. Beyond their economic appeal, these substitutes are also drawing interest for their environmental benefits. Scientists say they offer a more sustainable solution, producing far fewer carbon emissions and avoiding the deforestation linked to traditional livestock farming.
Wahiba Dridi, who serves snails at her restaurant in Tunis, cooks them in a traditional fashion with peppers and spices. She said they were popular throughout this year’s Ramadan, which ended last week. Though Tunisian Muslims traditionally eat red meat at the meals during which they break their daily fasts, a kilogram of snails costs less than 28 Tunisian dinars ($9) compared to beef, which costs 55 dinars per kilogram ($18).
“If people knew the value of snails they would eat them all year long,” Dridi said.


US sending Israel 20,000 assault rifles that Biden had delayed, say sources

Updated 04 April 2025
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US sending Israel 20,000 assault rifles that Biden had delayed, say sources

  • The rifle sale is a small transaction next to the billions of dollars worth of weapons that Washington supplies to Israel
  • The March 6 congressional notification said the US government had taken into account “political, military, economic, human rights, and arms control considerations“

WASHINGTON: The Trump administration moved forward with the sale of more than 20,000 US-made assault rifles to Israel last month, according to a document seen by Reuters and a source familiar with the matter, pushing ahead with a sale that the administration of former president Joe Biden had delayed over concerns they could be used by extremist Israeli settlers.
The State Department sent a notification to Congress on March 6 for the $24 million sale, saying the end user would be the Israeli National Police, according to the document.
The rifle sale is a small transaction next to the billions of dollars worth of weapons that Washington supplies to Israel. But it drew attention when the Biden administration delayed the sale over concerns that the weapons could end up in the hands of Israeli settlers, some of whom have carried out attacks on Palestinians in the Israeli-occupied West Bank.
The Biden administration has imposed sanctions on individuals and entities accused of committing violence in the Israeli-occupied West Bank, which has seen a rise in settler attacks on Palestinians.
On his first day in office on January 20, Trump issued an executive order rescinding US sanctions on Israeli settlers in a reversal of US policy. Since then, his administration has approved the sale of billions of dollars worth of weapons to Israel.
The March 6 congressional notification said the US government had taken into account “political, military, economic, human rights, and arms control considerations.”
The State Department did not respond to a request for comment when asked if the administration sought assurances from Israel on the use of the weapons.

CLOSE TIES
Since a 1967 Middle East war, Israel has occupied the West Bank, which Palestinians want as the core of an independent state, and has built settlements that most countries deem illegal. Israel disputes this, citing historical and biblical ties to the land.
Settler violence had been on the rise prior to the eruption of the Gaza war, and has worsened since the conflict began over a year ago.
Trump has forged close ties to Netanyahu, pledging to back Israel in its war against Hamas in the Gaza Strip. His administration has in some cases pushed ahead with Israel arms sales despite requests from Democratic lawmakers that the sales be paused until they received more information.
The US Senate on Thursday overwhelmingly rejected a bid to block $8.8 billion in arms sales to Israel over human rights concerns, voting 82-15 and 83-15 to reject two resolutions of disapproval over sales of massive bombs and other offensive military equipment.
The resolutions were offered by Senator Bernie Sanders of Vermont, an independent who caucuses with Democrats.
The rifle sale had been put on hold after Democratic lawmakers objected and sought information on how Israel was going to use them. The congressional committees eventually cleared the sale but the Biden administration kept the hold in place.
The latest episode in the decades-old Israeli-Palestinian conflict began with a Hamas attack on Israeli communities on October 7, 2023 with gunmen killing 1,200 people and taking more than 250 hostages, according to Israeli tallies. Israel’s campaign has so far killed more than 50,000 Palestinians, Gaza health authorities say.
Israel’s National Security Minister Itamar Ben-Gvir, a far-right member of Prime Minister Benjamin Netanyahu’s government, oversees the Israeli police force. The Times of Israel newspaper in November 2023 reported that his ministry has put “a heavy emphasis on arming civilian security squads” in the aftermath of October 7 attacks.


Medecins Sans Frontieres ‘appalled’ by second staff member killed in Gaza within weeks

Updated 04 April 2025
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Medecins Sans Frontieres ‘appalled’ by second staff member killed in Gaza within weeks

  • Hussam Al Loulou died in the strike on Apr. 1 in central Gaza

GENEVA: Global medical charity Medecins Sans Frontieres said on Friday it was appalled and saddened by the killing of one of its staff by an air strike in Gaza, the second within two weeks.


Hussam Al Loulou died in the strike on Apr. 1 in central Gaza, alongside his wife and 28-year-old daughter, the organization said.


Uganda president holds talks with South Sudanese leaders to try to avoid civil war

Updated 04 April 2025
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Uganda president holds talks with South Sudanese leaders to try to avoid civil war

  • Goc said that the country’s leadership had assured Museveni of its commitment to implement the peace agreement
  • Uganda last month deployed troops to South Sudan to support the government

NAIROBI: Uganda’s President Yoweri Museveni was expected to meet South Sudanese officials on the second day of his trip to the capital, Juba, as the UN has expressed concern of a renewed civil war after the main opposition leader was put under house arrest.
Museveni, who is among the guarantors of a 2018 peace agreement that ended a five-year civil war, held closed-door discussions with President Salva Kiir on Thursday.
South Sudan’s Foreign Minister Mohammed Abdallah Goc said that the country’s leadership had assured Museveni of its commitment to implement the peace agreement.
South Sudan’s political landscape remains fragile and recent violence between government troops and armed groups allied to the opposition have escalated tension.
Uganda last month deployed troops to South Sudan to support the government, but it was criticized by South Sudan’s main opposition party SPLM-IO, whose leader Riek Machar is under house arrest on charges of incitement.
In early March, the armed group loyal to Machar attacked a UN helicopter that was on a mission to evacuate government troops from the restive northern Upper Nile State.
Western countries including Germany and Norway have temporarily closed their embassies in Juba while the USand the UK have reduced embassy staff.