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With dollars running low in Lebanon, ATMs are spitting back bank cards, and locals are panicking
November 22, 2019 at 7:10 p.m. GMT+1
BEIRUT — Over recent weeks, ATMs in Lebanon have been spitting back bank cards, refusing to provide dollars to those who ask for them, though people here have long used the American currency alongside the Lebanese pound. Dollars have virtually disappeared.
Panicked tenants have begun asking to pay their rent in pounds, but landlords are refusing to accept them as the local currency hemorrhages value. Some restaurants and bars have stopped taking credit cards, instead requiring cash to pay vendors. Other eateries have limited their menus, unable to pay for imported goods in dollars.
Lebanon is facing not just political turmoil, with daily protests across the country, but a financial emergency as well.
Even as demonstrators rail against the political elites they blame for the economic troubles, this deeply indebted country is facing an escalating liquidity crisis. The black market exchange rate has now soared to 1,900 pounds to the dollar, 26 percent higher than the official rate.
The dollar shortage is reverberating across the economy, suppressing consumer demand and driving up costs for Lebanon’s all-important service sector, which must pay vendors in dollars. Service industry employees are being laid off or given only 50 percent of their wages.
Banks had been closed altogether during a week-long strike called by the union representing banks staff over security concerns for employees. Many banks reopened Tuesday but have little to offer the public. A week ago, the Association of Banks in Lebanon set a $1,000 ceiling for withdrawals from U.S. dollar bank accounts and limited transfers abroad — which had been previously been halted altogether — to allow only for “urgent personal expenses.”
Some banks are even refusing to give customers the $1,000 they are supposedly allowed to withdraw. At least one bank refused to give dollars to customers who had opened accounts in other branches.
In downtown Beirut, spider web cracks have spread across the glass storefront of the Blom Bank, its walls and windows splashed with colorful graffiti echoing the chants of the protesters who have crowded into Lebanon’s streets: “Down with capitalism” and “We are not afraid.”
Security forces began standing guard out front this week, as they’ve done outside many other banks across the country.
One man stood in line to withdraw the remaining $300. He said he had taken his allotted $1,000 from another bank and was leaving for Canada to join his wife. “There is no future here,” he said, declining to give his name before shuffling off.
'Margin of tolerance' diminished
Over the past month, about $3.8 billion has been withdrawn from Lebanon’s banks, according to Jad Chaaban, an economics professor at the American University of Beirut.
These sizable withdrawals reflect a lack of confidence in the banking system and the wider economy, which is being undermined by a similar lack of trust in the political system. Prime Minister Saad Hariri resigned Oct. 29 from his position after two weeks of nonstop protests against the political elite, and a new government has yet to be formed.
To sustain the fixed dollar-to-pound rate, Lebanon’s central bank must maintain foreign currency reserves. The Central Bank governor, Riad Salameh, has repeated recently that there are sufficient reserves and no liquidity issue, but people do not trust the central bank, Chaaban said. He said Lebanon needs an independent authority to carry out an audit and restore confidence in the banks.
Lebanon is one of the most indebted countries in the world, as measured by a debt-to-GDP ratio projected at 155 percent. After a 15-year civil war ended in 1990, the country’s rulers lowered corporate and income taxes and borrowed internationally to help resurrect the war-ravaged country. Lebanon later attracted foreign currency deposits by offering high-interest rates to maintain its stock of dollars.
These practices, however, widened the gap between the rich and the poor and fueled a yawning government budget deficit.
Lebanon’s economy and financial system have long been heavily dependent on remittances from the Lebanese diaspora abroad, which is larger than Lebanon’s resident population. In recent years, the flow of money into Lebanon has tapered off partly because of regional instability, according to Sami Nader, the director of Levant Institute for Strategic Affairs. More dollars have been flowing out of the country than into it, leaving Lebanon without enough dollars to cover its import bill and service its debt.
Lebanon’s economy has suffered in part from the spillover from the civil war in neighboring Syria. The tiny Mediterranean country has struggled to deal with an inflow of hundreds of thousands of refugees, clashes near and across the border and a shutdown of vital trade routes.
The role of the Iran-backed militia, Hezbollah, which has a significant presence in the Lebanese parliament, is also a complicating factor for the economy. Because Hezbollah supports the Houthi rebels in Yemen, who are engaged in a war with a Saudi-led military coalition, the “margin of tolerance” toward Lebanon among Saudi Arabia and other Gulf countries has diminished, Nader said.
“Gulf countries constitute our strategic economic depth,” he said. “Not because we love them, but because 55 percent of remittances, which are the linchpin of our economy, come from the diaspora who live there.
“The international community has no reason to inject cash in the Lebanese market as long as Hezbollah is conducting Lebanon’s policies,” Nader said. “Why would Saudi Arabia step in to rescue a Hezbollah-dominated Lebanon that supports insurgents in the region who target Saudi with missiles?”
'They have ruined people's lives'
The protests, which erupted in mid-October, have targeted public corruption, and the anger has been exacerbated by rumors that some influential, well-connected people have been able to withdraw more than the maximum $1,000 a week.
“Banks are the lungs of the society. They are not just a company that is supposed to make money, but have a certain responsibility toward society,” said a real estate developer, whose name is being withheld because he fears reprisals. His company, which employed around 220 workers in 2017, now has only 15.
“Banks have proven they are not worthy enough to be in such a position. They have ruined people’s lives,” he said.
On the day the banks finally reopened earlier this week, employees watched the protests from behind the large glass facade of a bank headquarters, staring down at the hundreds of demonstrators banging pots and pans, chanting, “This country is for the workers; down with the capital’s authority.”
Clad in expensive suits and shiny shoes, some bankers and other bank employees stood in front of the building, watching or taking pictures. One employee changed into casual clothes and joined the protesters.
“We, bank employees, are not all enemies of the revolution,” the bank employee said on the condition of anonymity in order not jeopardize his job. “I changed into these clothes because the suit that I have to wear for work does not represent me or the class that I belong to.”
How many social media account corporate heads will be pulled into corporate board rooms and fired over the next week for getting into this?
Has Starbucks responded yet?
McDonald's?
And these are all "Verified accounts"..... oh Myyyy indeed.
@JW Insider is usually our pun master around here...... but even this is too far for him. :-)
Thanks! If you go to listen and watch some other videos, you will also notice how she, Lara, going complètement with emotions through song while singing.
I should have known better
Than to let you go alone
It's times like these
I can't make it on my own
Wasted days, and sleepless nights
An' I can't wait to see you again
I find I spend my time
Waiting on your call
How can I tell you, babe
My back's against the wall
I need you by my side
To tell me it's alright
'Cause I don't think I can take anymore
Is this love that I'm feeling
Is this the love that I've been searching for
Is this love or am I dreaming
This must be love
'Cause it's really got a hold on me
A hold on me
I can't stop the feeling
I've been this way before
But, with you I've found the key
To open any door
I can feel my love for you
Growing stronger day by day
An' I can't wait too see you again
So I can hold you in my arms
Is this love that I'm feeling
Is this the love that I've been searching for
Is this love or am I dreaming
This must be love
'Cause it's really got a hold on me
A hold on me
Is this love that I'm feeling
Is this the love that I've been searching for
Is this love or am I dreaming
Is this the love that I've been searching for
Is this love or am I dreaming
Is this the love that I've been searching for
Is this love or am I dreaming
Is this the love that I've been searching for
Is this love or am I dreaming
Is this the love that I've been searching for
Is this love or am I dreaming
Is this the love that I've been searching for
Songwriters: David Coverdale
I was a young passionate teenager in the late 1980's....
These type of ballads made a whole group of youth view "sexy" in a different way than our forefathers.
I guess that is true of almost any generation.
Last Christmas
I gave you my heart
But the very next day you gave it away.
This year
To save me from tears
I'll give it to someone special.
Last Christmas
I gave you my heart
But the very next day you gave it away.
This year
To save me from tears
I'll give it to someone special.
Once bitten and twice shy I keep my distance
But you still catch my eye.
Tell me, baby,
Do you recognize me?
Well, It's been a year,
It doesn't surprise me (Merry Christmas)
I wrapped it up and sent it
With a note saying, "I love you,"
I meant it Now I know what a fool I've been.
But if you kissed me now I know you'd fool me again.
Last Christmas
I gave you my heart
But the very next day you gave it away.
This year To save me from tears
I'll give it to someone special.
Last Christmas
I gave you my heart
But the very next day you gave it away.
This year
To save me from tears
I'll give it to someone special.
Oh, oh, baby.
A crowded room,
Friends with tired eyes.
I'm hiding from you
And your soul of ice.
My god I thought you were someone to rely on.
Me?
I guess I was a shoulder to cry on.
A face on a lover with a fire in his heart.
A man under cover but you tore me apart, ooh-hoo.
Now I've found a real love, you'll never fool me again.
Last Christmas I gave you my heart
But the very next day you gave it away.
This year To save me from tears I'll give it to someone special.
Last Christmas I gave you my heart
But the very next day you gave it away.
This year To save me from tears
I'll give it to someone special.
A face on a lover with a fire in his heart (I gave you my heart)
A man under cover but you tore him apart
Maybe next year
I'll give it to someone
I'll give it to someone
special.
Special...
Someone...
LNN got a reaction from admin in Be Your Own Bank - Bitcoin
LNN got a reaction from James Thomas Rook Jr. in What’s something you can say during sex but also when you manage a brand twitter account?— Netflix...
