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Lebanon’s CBK Governor Won’t Step down, Despite Pressure

The governor of the Central Bank of Lebanon, Riad Salameh, said that he is not going to resign and instead is looking to implement a strategy that will help the country out of its current economic crisis.

Lebanon’s economy is dealing with civil unrest due to a recent devastating explosion that killed 200 people and left more than 6000 others injured, on top of the stress caused by the coronavirus pandemic and a failing currency.

The statement follows the government’s resignation after massive protests of citizens seeking answers over the explosion. However, CBK’s governor said that he can’t be blamed for the economic woes in the country, and he is instead trying to help.

“You cannot resign in an environment of a crisis, because it would like going away from the task you have to perform.”

Talking to CNBC’s Hadley Gamble on Monday, Salameh further stated that he hasn’t considered resigning despite ongoing rumors, as he is working on a redemption strategy for the country.

“I don’t want to resign because I am continuing what I have in my mind, as a strategy to get out of this crisis, and I’m sorry to disappoint those who are spreading rumors on my resignation every day,” said Salameh.

 

Massive Protests Push Government to Resign

On 10th August 2020, the Lebanese government stepped down, after citizens took to the streets in outraged protests seeking accountability for the deadly explosion that occurred a week earlier.

The demonstrations which are still ongoing across the capital of Beirut seeks to dismantle the entire political elite system in the country.  The protests started by targeting government buildings, injuring thousands of protestors as police retaliated with brutal force.  However undeterred, angry residents, most of who are jobless and others who had to clean up after the explosions, came forward to protest against the government’s lack of response.

“The explosion damaged almost half the city. The absence of the state and the presence of the people… it’s an example of the kind of criminal neglect by this political class. This sense of not caring for the population is palpable.” Said Maha Yahya, director of the Carnegie Middle East and a Beirut resident.

The explosion has since left more than 300,000 people homeless, with the World Bank estimating that $4.6 billion was spent in damages.

“The explosion caused between US$3.8 and US$4.6 billion in damage to physical stock, while loses including changes in economic flows as a result of the decline in the output of the economic sectors are estimated to be in the range of US$2.9 and US3.5 billion.”

 

Lebanon facing Economic collapse

In the past ten months, the US has sanctioned Lebanon-based banks due to ties with Hezbollah,   with the government also defaulting on its debt.

While Salameh claims to be among the few trying to fix the country, he was reported to have inflated the central bank’s assets by more than $6 billion in 2018.

Meanwhile, while Lebanon is on the verge of an economic collapse, the global economy is estimated to contract by 4.4% in 2020, with China’s economy the only one to register growth at 2.7%.

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