You go into a bank with a gun, maybe it’s a toy gun, maybe it’s a real gun like a hunting rifle, and you demand not all the money, just the money that the bank holds in your account, money the bank has refused to give you as your business goes bust. Or perhaps it’s your money that you need to pay for your sister’s urgent cancer treatment. What sort of a bank robber does that make you? That’s the question that ordinary Lebanese and the authorities find themselves asking after last week’s spate of “robberies” forced the banks to close for three days from September 19 as they try and figure out what to do.
Meanwhile, those who are inarguably the real criminals go about their business looting the country unscathed. These criminals are the political and business elites who have yet to form a cabinet while Lebanon and its people suffer a financial disaster the World Bank has described as “among the worst the world has seen.” How bad is that? “Real GDP,” the World Bank noted “is estimated to have declined by 10.5% in 2021, on the back of a 21.4% contraction in 2020 as policymakers have still not agreed on a plan to address the collapse of the country’s development model.” What that means for ordinary people is unemployment, rampant inflation, the denial of basic services, and the simple inability to be able to pay rent or put food on the table.
Saudi Arabia and Lebanon: A Tale of Two Economies
The World Bank report came out in April this year, before the May parliamentary election that saw a brief moment of hope. A dozen candidates won who were independent of sectarian parties. However, this turned out to be a false dawn. The situation has gone from bad to worse. There is no plan in sight. Sectarian politicians and their business cronies bicker over the make-up of a cabinet, arguing over the division of the spoils.
Fox in the Henhouse
Riad Salameh, the governor of the central bank, Banque du Liban (BDL), continues his duck and dive tactics. His latest gambit involves a claim that the Appeals Public Prosecutor lacks competence to handle his file, which is a large one involving not only the governor but also Salameh’s brother Raja and his “right hand person” Marianne Hoayek. The prosecutor is investigating many financial matters, including commissions of $330 million on government bond sales to a company owned by Raja. Property purchases of $12 million in France by the Salameh brothers are also in question. As we observed in April, one of the properties is a Paris flat. It is owned by Anna Kovakova who was described in the French press as “the mother of Riad Salameh’s illegitimate daughter.” This flat was rented out to BDL as a “reserve centre.” and Lebanon’s central bank was paying Kovakova US$500,000 per annum for the flat.
A 2020 Organized Crime and Corruption Reporting Project (OCCRP) investigation conducted jointly with the Beirut-based investigative site Daraj revealed that the governor holds overseas investments amounting to nearly US$100 million:
(It) tracked Salame’s vast overseas investments, finding multiple real estate deals in the United Kingdom, Germany, and Belgium made over the course of a decade. Company accounts suggest the investments were often financed by borrowing, with tens of millions of euros in credit sometimes secured without collateral…Much of his money went to the UK, a favorite destination for overseas investors looking for a discreet place to make their money grow….
When contacted by OCCRP, Salame said he has broken no laws — that he amassed “significant private wealth” before he joined the central bank in 1993, and that “nothing prevents me from investing it.”
The wily Salameh has avoided arrest despite warrants issued against him. He has been moving between his office at BDL and his two homes, undoubtedly aided by corrupt officials within the police and the judiciary.
Contrast his story of vast wealth with that of Sali Hafez who says her sister is dying from cancer. Hafez needed $13,000 of her own money that her bank was refusing to release. She needed this money to pay for her sister’s treatment. So Hafez borrowed a nephew’s gun and took matters into her own hands. As did Jawad Sleem who took a hunting rifle into a branch of Lebanon & Gulf Bank and demanded his deposit. The father of seven has been out of work for months. He needs the money to feed his family. Neither has been charged nor have the others who stole their own money. Six “robberies” thus far have taken place. Meanwhile, as noted by L’Orient Today, there is still a near complete lack of transparency about BDL’s foreign exchange reserves. The BDL’s governor continues with his successful vanishing acts. Lebanon’s economy continues to collapse and its people are forced to take desperate measures simply to survive.
[Arab Digest first published this article and is a partner of Fair Observer.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.
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