Minister Amin Salam addresses Lebanon’s economic crises | Economy and Business News

Minister Amin Salam addresses Lebanon's economic crises |  Economy and Business News

Lebanon is struggling with a deep financial crisis.

The United Nations estimates that almost 80 percent of its population lives below the poverty line, while the World Bank has warned that the economic calamity is one of the three worst the world has seen since the middle of the century XIX

On Thursday, a gunman took hostages in a Beirut bank to demand access to his savings, threatening to set himself on fire if the bank did not give him his money.

The country has imposed restrictions on how much cash people can take out as the economy worsens.

Al Jazeera talks about the economic and food crisis with Lebanon’s Minister of Economy and Trade, Amin Salam.

AJ: How would you characterize the state of the economy?

salam: Lebanon is really going through a very, very difficult economic crisis. Reforms are a major need for Lebanon to stop the bleeding of the economy and start looking at development and recovery.

Delays due to political tensions in the country have extended the deadline for rapid reforms called for by the IMF [International Monetary Fund] and requested by the international community. So, we are seeing more social unrest, which is very alarming because what we witnessed yesterday could be something that could grow bigger and on a larger scale, which will create total chaos in the social scene with security challenges for the Lebanon.

AJ: Well, as you just alluded to there yesterday, we saw the level of desperation that a lot of people are feeling, when will people be able to get their money out of the banks?

salam: This is a very difficult question to answer, but it is a very justified question and people have every right to their deposits in banks.

I have been a member of the negotiating committee with the IMF. We have been working diligently to find the best exits to really secure depositors’ money. None of the scenarios we worked on were really easy.

Most recently, the government issued an economic recovery plan that showed certain accounts with a limit of $100,000 could have access to their money in banks, and amounts above $100,000 will be part of a larger economic plan, more sophisticated, which will see the government return that money through an investment fund that the government hopes to establish.

AJ: A question many Lebanese would like to know is when will it happen?

Hello: As we have been saying, Lebanon needs a bailout and the IMF wants reforms to happen before that happens. Frankly, I am very concerned that the backlog of reforms that the IMF requested in the form of prerequisites are taking too long. Most of these laws are sitting in parliament, waiting to be passed by parliament.

Once we issue these reform laws, including the capital control that really puts structure to the entire banking sector, once we publish the restructuring of the banking sector, the secrecy law for the banking sector and Budget 2022, then we can really start talk about serious next steps to open up banks more, deal with depositors, give hope that depositors can start to get access based on the new laws that are already out.

Before that, nothing will really change, which is the biggest concern. Unless these reform laws come through, nothing will change in the social scene or the way depositors can access their money.

AJ: Well, in the meantime, there’s this widespread shortage of food and fuel and people are suffering, and it sounds like what you just talked about there is going to take time. A commission that I believe you chair recently declared that 90 percent of the bread crisis is over.

Are you sure the subsidized grains end up where they are supposed to go, benefiting the people they are supposed to?

salam: For us, the issue of food security, and I have the ministerial committee on food security, we have put in place new exceptional mechanisms to really manage the proper distribution of subsidized wheat in the market.

In less than a week we have witnessed an almost 100% change in the market because the crisis is over. There are no longer queues in front of the bakeries and the distribution is being fair for all areas of Lebanon.

However, we still have many challenges to deal with, especially the smuggling of subsidized wheat out of the country and dealing with a number of black market traders that this committee is relentlessly pursuing and turning into the judicial system and taking them extreme measures against them to be able to really control the market for more stability.

But we are confident that the crisis is over and we will continue the same efforts to ensure that the bread and the people who really need access to this bread get their share.

AJ: Lebanon was getting something like 70 percent of its imported grain from Ukraine. How has the war changed things there? I see that the first grain transport ship that was on its way has not arrived.

salam: Yes, it’s true. Lebanon imports about 70 percent of its wheat from Ukraine, the rest is distributed among several countries. But for us, the war in Ukraine really affected our availability for this commodity because Lebanon, as you know very well, lost its national reserves after the tragic explosion in the port of Beirut, so we really consume what we receive

And the delays that occurred due to the war in Ukraine and Russia were significant because I used to receive any shipment that came from Ukraine within a week in Lebanon. Now it was taking more than three weeks, sometimes up to a month, and sometimes some of the ships were being moved to other places.

We are happy that the Istanbul agreement has reopened shipping lanes from Ukraine to Lebanon. And the boat you just mentioned had mostly different kinds of grains, mostly corn, not wheat.

It was supposed to reach Lebanon, but we were informed from official channels that it changed destination because it took a long time to reach Lebanon and the private sector that bought this ship canceled the whole deal. This is the information we received.

AJ: You have a few months left in your term and, as we mentioned, many things will take a long time. A lot here is based on people’s trust in politicians. What will you do personally for the rest of your term?

salam: My biggest concern and the mission that I am really focused on now, in particular that Lebanon has been classified by the World Bank and various international organizations as the most vulnerable, is the issue of food security.

First, we will continue with stability to get supplies, especially wheat, to Lebanon, which is a very serious component of the food security issue in Lebanon.

The second most important thing to achieve is that the ministry of economy and trade must keep all channels open with the international community to ensure that their support and aid to Lebanon continues to flow in and to Lebanon without problems.

The last most important is our watchdog role to make sure that everything comes and has a price in a legal structure so that the citizens of Lebanon are not abused by unfair traders or black market traders because inflation is already affecting Lebanon Generally.


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!