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Lebanon: Minister Slams Banks for 'Trapping' State Salaries

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Beirut- Asharq Al-Awsat -- Lebanon's caretaker finance minister accused the country's banks on Tuesday of "trapping" civil servants' salaries with withdrawal limits that have fuelled public anger in the crisis-stricken country. "What is happening in some Lebanese banks is unacceptable," Ali Hassan Khalil wrote on Twitter. "They are trapping the salaries of (state) employees that are transferred by the finance ministry every month." Rocked by two months of anti-government protests and a political deadlock, Lebanon is also facing its worst economic crisis since the 1975-1990 civil war. A liquidity crunch has pushed Lebanese banks to impose capital controls on dollar accounts, capping withdrawals at around $1,000 a month. Some have imposed even tighter restrictions. Some have also capped weekly withdrawals of the Lebanese pound at one million -- the equivalent of $660 at official rates -- even as the currency has plunged by nearly a third against the dollar on the black market in recent weeks. The tightening controls have prompted public uproar, with many accusing banks of robbing them of their savings. On Tuesday, Khalil said it was a "sacred right" of civil servants to be paid in full and on time. "It is not permissible for this right to be violated," he said, vowing legal action to ensure public servants can access their salaries in full. At banks in the northern city of Tripoli, tensions soared Tuesday as clients struggled to withdraw their salaries, said an AFP correspondent there. A fight broke out in a branch near the city's main protest camp after the bank refused to let a customer withdraw dollars. An anti-government street movement has rocked the small Mediterranean country since October 17.

Rahi: Rulers Brought Lebanon to Collapse and Citizens to Poverty

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by naharnet.com -- Maronite Patriarch Beshara al-Rahi said in his Christmas message on Tuesday that officials have brought Lebanon to economic and financial collapse and the Lebanese to poverty. “Our tragedies come from the fact that our rulers refuse to transfer power, they would rather allocate it, spend lavishly and accumulate debts. They brought the state to economic and financial collapse and left more than a third of the Lebanese people in poverty,” Rahi lashed out He said the Lebanese people were expecting a Christmas present from politicians in which they agree on forming “a government of experts to put the country on route to economic salvation.” “The people have expressed their suffering in a positive revolution that has not subsided for 70 days. We hope it will always be positive cooperating with the army and security forces,” Rahi said. The Patriarch “blessed” the “revolution” noting that “our people will not accept bad governance prevailing since the 90s with the spread of corruption, squandering (of public funds), aggravation of deficits, rise in public debt poverty and unemployment.” He urged officials to form a government to end the suffering of Lebanese.

An artist uniting a nation: Lebanon's Fairuz

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Lebanese diva Fairuz performs in Beirut, Feb. 5, 2018. (AP)

by MEHMET FAHRI DANIŞ dailysabah.com -- Music often becomes a uniting element for nations whose citizens have very little in common: Editf Piaf in France, Elvis Presley in the U.S. and Lys Assia in Sweden. In the case of Lebanon, Fairuz – or Nouhad Haddad by her birth name – holds a very special place as she is equally embraced by the country's multicultural society. The existence of the phenomenon of the nation is closely related to the presence of symbolic motifs that claim to represent it. What makes a community a nation is mostly these symbolic productions that its members unwittingly confirm and participate in producing every day. National anthems and flags, heroes, "sacred" landscapes, national architecture, national cuisines and tourist brochures all contain the archaic emphasis of nationalist movements' attempts to construct links with the past.

'The national symbol'

National symbols allow members of communities to feel like part of the national consciousness. Efforts to maintain ties to this consciousness through popular culture are also made – for example, a company identified with a country and is universally known, national athletes competing in the Olympic games or artists representing their country in musical contests. Today, these can serve as more effective tools for emphasizing national consciousness than an antiquated anthem or national flag. When it comes to Lebanon, the cedar tree motif, a symbol of national character, is an excellent example of a nationalist symbol. Used on the first Lebanese flag designed during the mandate rule established in 1920 and in the flag of independent Lebanon in 1943, this figure serves a symbolic function that links the Lebanese with the Phoenicians on the basis of territorial identity. Another symbol for the country as important as the cedar tree is Fairuz, who began her artistic career during the 1950s.

Fairuz's career

Dollar shortage crisis in Lebanon spills into Syria

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by al-monitor.com -- Sarah Abdallah -- BEIRUT — An economic and financial crisis looms over Lebanon, the third-highest indebted country in the world in terms of debt-to-gross domestic product ratio, which stood at 151% in 2018. “Given the large public debt … [Lebanon's] interest payments now exceed 9% of GDP,” the International Monetary Fund (IMF) said in a July report. The IMF also said, “Deposit growth in 2018 was the lowest since 2005 and the BdL [Bank of Lebanon] reserves have now decreased by around $6 billion since early 2018.” The crisis comes with strict banking procedures. Lebanese banks imposed restrictions on deposits and capped withdrawals. They also suspended housing loans and froze transfers abroad. This led to a US dollar scarcity in the Lebanese market and increased its exchange price against the Lebanese pound. The dollar reached 2,400 Lebanese pounds at the money changers in late November, before settling between 1,980 Lebanese pounds and 2,000 Lebanese pounds in sales and purchases during the second week of December. The official rate, however, remained Dec. 20 at 1,507.5 Lebanese pounds on the Beirut Stock Exchange. Remarkably, the exchange rate in Syria also gyrated, hitting 1,000 Syrian pounds against the US dollar, while its value set by the Syrian Central Bank remained at 434 Syrian pounds.

This has led many to wonder about the connection between the two monetary crises. Some Lebanese fear that large amounts of dollars are being smuggled from Lebanon to Syria. But the dollar scarcity in Lebanon has led to the same condition in Syria. Many Syrians hold bank accounts in Lebanon, which at one time was a much more stable market. Now, though, these accounts are being frozen or restricted. US sanctions prohibit American financial institutions from doing business with Syrian banks. Meanwhile, more than 1 million Syrian refugees are registered with the UN High Commissioner for Refugees in Lebanon. The Lebanese government estimates the actual number at 1.5 million Syrians. Add to this the Syrian merchants who deposit their money in Lebanese banks. A Norwegian Refugee Council report quoting World Bank data showed 17% of remittances to Syria come from Lebanon, second only to Saudi Arabia, with 29% of total financial remittances.

Saudi Arabia sentences five to death for Khashoggi murder but clears three top officials

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Surveillance footage shows Saudi 'body double' in Khashoggi's clothes after he was killed, Turkish source says

By Sarah El Sirgany and Lauren Said-Moorhouse -- (CNN) -- Saudi Arabia has sentenced five people to death for the murder of journalist Jamal Khashoggi but cleared a former top adviser to Crown Prince Mohammed bin Salman, a public prosecutor said Monday. There was no evidence against Saud al-Qahtani, Saudi Deputy Public Prosecutor Shaalan al-Shaalan announced in a televised press conference Monday. A court also dismissed charges against Ahmed al-Assiri, a former deputy intelligence chief, and Mohammed al-Otaibi, Saudi's consul general in Istanbul when the murder took place, he said. Al-Qahtani and al-Otaibi were sanctioned a year ago by the US Treasury for their alleged involvement in the murder. Both al-Qahtani and al-Assiri were part of Crown Prince Mohammed bin Salman's inner circle and were relieved of their duties in the immediate aftermath of Khashoggi's killing in October 2018. "Saud al-Qahtani was questioned by the public prosecution and was not charged because there was no evidence against him," al-Shaalan said.

Reading preliminary rulings for 11 people who have been investigated by Saudi Arabia, al-Shaalan said five others who took part in the murder had been sentenced to death. Another three people face a total of 24 years in prison for covering up the murder and violating regulations. He did not reveal any of their names. Khashoggi -- a Washington Post columnist and royal insider-turned-critic -- was last seen entering the Saudi consulate in Istanbul on October 2, 2018. He had expected to collect documents for his upcoming wedding but was instead killed and allegedly dismembered in the building. His remains are yet to be found.

Verdict slammed as 'a mockery'

The murder drew international condemnation and the CIA concluded that bin Salman personally ordered the killing. Riyadh's version of events on October 2 have repeatedly shifted as new details have emerged but it has always maintained that neither bin Salman nor his father King Salman knew of the operation to target Khashoggi. US officials, however, have said such a mission -- including 15 men sent from the Kingdom -- could not have been carried out without the authorization of bin Salman. Khashoggi's son Salah described the ruling as "fair" on Twitter Monday. "A fair judiciary is based on 2 principles: justice and quick proceedings. Today's judiciary was fair to us, the sons of Jamal Khashoggi," wrote Salah, Khashoggi's eldest son who handles the family's relations with the government. "We affirm our confidence in Saudi judiciary on all its levels as it ruled in our favor and achieved justice." Earlier this year, Salah took to Twitter to deny that a settlement had been reached between his family and the Saudi government after a source told CNN that Khashoggi's family have received millions of US dollars in cash and assets as compensation for the killing. But Hatice Cengiz, Khashoggi's fiancée, said the Saudi announcement was "not acceptable." In a post on Twitter on Monday, Cengiz wrote that she would never forget Khashoggi, nor his "murderers" or "those who are trying to cover up" his murder.

Lebanon protesters shun PM-designate's call for talks

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Lebanese police deploy outside the Beirut home of prime minister-designate Hassan Diab who has been holding talks on forming a new government for the protest-hit country

Beirut (AFP) Prominent street leaders Sunday shunned an invitation by Lebanon's prime minister-designate to sit for talks over the formation of a new government, saying they are not ready to extend support. Debt-burdened Lebanon has been without a fully functioning government since former prime minister Saad Hariri resigned on October 29 in the face of nationwide protests. Demonstrators are demanding an overhaul of the political establishment which they deem corrupt and inept, insisting on a government of independents and experts with no ties to the country's sectarian parties.

Hassan Diab, an engineering professor designated Thursday to form a desperately-needed government, had asked protesters to give him a "chance" to form a cabinet of independent experts within four to six weeks. But the self-styled technocrat's call for consultations with representatives of the popular movement on Sunday failed to draw prominent street leaders or groups. A small crowd of protesters rallied outside Diab's house and slammed visitors who claimed to represent the country's leaderless movement. "You don't represent us," the protesters chanted.

The few who heeded Diab's calls for talks included largely unknown individuals not recognised as representatives of the protest movement. "Not a single group actually active on the ground met today with the prime minister-designate because they are not convinced" he can form a government of technocrats, said Wassef Harakeh, a prominent activist. "They want us to get mired in this game of consultations," he told AFP. In the protest camp in central Beirut, crowds began gathering in the afternoon. "The people that visited the prime minister-designate today do not represent the revolution," said Ali Haidar, a resident of Beirut's southern suburbs. "These talks were a failure," he told AFP from the protest camp.

Can Lebanon’s new PM save the economy?

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By AP -- Beirut: After two months of political deadlock, Lebanon has finally designated a new prime minister to form a government. Now comes the hard part: saving Lebanon from an unprecedented financial crisis. Nominated with the support of Iran-backed Hezbollah and its allies, Prime Minister-designate Hassan Diab and the cabinet he has vowed to form quickly must win over investors and foreign donors. What are the main concerns for investors as Lebanon grapples with a hard currency shortage, a huge public debt and a weakening currency? HOW LIKELY IS A DEBT DEFAULT OR RESTRUCTURING? Lebanon’s public debt burden, equivalent to around 150 per cent of GDP, and its twin current account and fiscal deficits looked unsustainable even before anti-government protesters took to the streets two months ago. Lebanon will face a test of its ability to meet its obligations in 2020, with $10.9 billion of debt maturing across the year, including a $1.2 billion eurobond due in March, Refinitiv data shows.

The international sovereign bonds continue to trade at less than half their face value, while credit default swaps have rocketed, suggesting Lebanon may be drifting towards a default. But that might not be a given. “A combination of fiscal reforms and a restructuring of the domestic debt could be enough to put public finances on a sustainable footing without having to resort to an external default,” Farouk Soussa, senior economist at Goldman Sachs, said in a note this week.

And even if a default does occur, Lebanon might be able to cushion the fallout. Central bank holdings of government securities implied that Lebanon had near-term debt management options that would limit losses borne by the private sector in the event of a default, Moody’s Investors Service said in a note.

IS A CURRENCY DEVALUATION A GIVEN?

Lebanon’s 22-year-old peg to the US dollar has been strained to near breaking point by the country’s political and banking crisis. With the pound losing roughly a third of its official value on the black market, a devaluation has loomed increasingly large. Central Bank Governor Riad Salameh governor has ruled out any such move, saying the government has the means to maintain it. But without a revival in sagging capital flows and a recovery in Lebanon’s external balance sheet, the central bank’s ability to defend the peg will diminish. Foreign exchange reserves have already dwindled to $28 billion, according to Goldman Sachs. Economists say, at least in the short-term, a devaluation could be harmful as it would push up Lebanon’s already steep overseas liabilities - hastening the risk of a default. It would also likely stoke inflation, at 1.3 per cent year-on-year in October.

HOW CAN THE BANKING SYSTEM BE REVIVED?