How did we get here?
The economic crisis is, at its core, a governance crisis emanating from a dysfunctional sectarian system that hindered rational policymaking and permitted a culture of corruption and waste. The country, led by the public sector, lived beyond its means. Decades of pursuing this model left the economy with high debt and a bloated banking sector.
Inevitably, the dramatic debt increase resulted in an-expanding debt-servicing burden. The large yearly funding needs rendered the country vulnerable to external and regional shocks. As external financial flows into Lebanon slowed, the central bank resorted to desperate and extremely expensive efforts to attract them. Ultimately, this proved unsustainable. Since October, we’ve had a virtual cessation of capital inflows and a sharp acceleration of outflows.
Where are we now?
This situation leaves the country with three simultaneous crises.
The first is a balance of payments and currency crisis. For 2020, we estimate the gap between USD supply and USD demand at $8 billion. If this gap is not filled, the economy will experience difficulties including the servicing of external debt, imported goods’ shortages, currency devaluation, and economic contraction.
The second crisis is that of public finance. Beginning with a 10 percent of GDP deficit in 2019, government revenues are now collapsing under the weight of the recession and the banking crisis described below. Inflation-adjusted spending is also crumbling. We estimate a $3 billion primary budget deficit (excluding interest payments) for 2020. In the current situation, funding this deficit will prove challenging.
The third crisis is that of the banking system. With almost half of banks’ assets invested in Lebanese sovereign risk including with the Banque du Liban (BDL) and another quarter representing risky private sector claims, banks are effectively insolvent and illiquid. Despite the loose and inefficient capital and banking controls recently put in place, the sector is experiencing a deposit run. In similar international experiences, the central bank usually steps in and provides the liquidity that banks need. However, the BdL is constrained by its limited USD reserves and by fears that an oversupply of LBP would lead to further currency weakening.
Consequences of continuing on the current path
Persisting with the current ad hoc approach to policy making will lead Lebanon on a path of implosion and political disintegration. We foresee seven consequences:
- The economy will experience a deep recession. USD shortages will force the economy to adjust to lower imports. Bank and capital controls will hit a private sector that is dependent on liquidity and credit; business closures, salary reductions, and layoffs have already become common. The public sector will retrench given difficult financing conditions. Under this scenario, we forecast the economy will experience a double-digit contraction in 2020—i.e., a recession equivalent to what the US experienced during the Great Depression.
- The Foreign Exchange (FX) will weaken sharply. The LBP will adjust downwards to bring the supply and demand of USD into balance. Left to its own devices, we estimate the FX could lose up to half its value leading to high inflation. In turn, this will have a massive negative impact on the cost of living, the availability of essential goods, food and healthcare, businesses and unemployment.
- Capital and bank controls will intensify. Banks will continue rationing deposit withdrawals and external transfers. The private sector’s liquidity crunch will deepen and disorderly and un-managed debt defaults (including on Eurobonds) will prove inevitable. BdL will hemorrhage international reserves.
- Debilitating social conditions will intensify. This kind of economic collapse will cause catastrophic wealth destruction. Poverty rates could rise to more than 40 percent of the Lebanese population with 1.6 million people unable to afford food and basic nonfood items. Unemployment will increase and much of the middle class could be eliminated.
- A seismic political shift is likely to occur. The current political parties will not emerge unscathed. The security repercussions of social unrest will be significant and difficult to predict.
- Without addressing the root causes, the crises will prove long lasting. To put it in stark terms, this would become a decade long economic crisis—one from which chances of recovery are significantly dim. A “lost decade” will result from this scenario.
- Finally, international financial support is likely to fall far short of what is needed to relieve the economy.
Is there a better approach?
We think there is. Below we outline a three-year program that aims to arrest the crisis, deal with its root causes and set the country back on a path of recovery. The program seeks to ensure equitable burden sharing of the crisis’ fallout while protecting the most vulnerable especially during the period of transition. The ten concrete steps below should be implemented in parallel rather than piecemeal.
- Establish an empowered economic emergency steering committee to design, negotiate and implement the program. In parallel, create participatory mechanisms to discuss with civil society the policy package, and to empower citizens to monitor its implementation.
- Replace the ad hoc and self-administered capital and banking controls. Controls are likely needed for an extended period even in the best of scenarios. They need to be run in a centralized and transparent fashion backed by proper legislation.
- Decisively deal with public sector debt. Immediately announce a moratorium on debt payments (external and domestic), hire legal counsel, and convene a creditor’s committee. Our view is that Lebanon’s fundamentals justify a debt load ranging between 60 and 80 percent of GDP over the medium term. To reach this target, creditors should be offered a menu of concessions including lower principal, reduced interest rates, and extended maturities.
- Embark on a credible fiscal reform. Public spending, currently inefficient, wasteful, and vulnerable to corruption, must be transformed. The electricity sector is but one example. A wholesale governance and regulatory reform program is needed to curb the rent seeking culture. These reforms, along with savings accruing from lower debt servicing, should allow for increased spending on social sectors and infrastructure. Second, a broad revenue reform is needed that focuses less on raising tax rates and more on addressing weak collection and overt reliance on specific sectors. Third, we recommend the adoption of a binding and credible “fiscal rule” that caps the size of future budget deficits.
- Deal with private sector debt. The private sector is facing a severe crisis. Convene a creditor/debtor roundtable to agree on a standardized menu of financial relief actions aiming to safeguard viable firms while orderly liquidating those that aren’t. The existing draft Bankruptcy and Restructuring law should be promptly passed.
- Repair BdL’s balance sheet. BDL is a large lender to the government and has an estimated USD30 billion negative net FX position rendering it vulnerable to devaluations. Until this is dealt with, it is tough to see confidence in the LBP returning.
- Bring the banking sector back to health as a prerequisite to reinvigorating the economy. Public debt restructuring and mounting Non-Performing Loans (NPLs) will render many banks insolvent. Complicating matters, banks are highly exposed to the BdL whose own balance sheet is impaired. Current bank equity is far from sufficient to cover these hits. Our estimates suggest $20-25 billion of fresh capital is urgently needed. Current shareholders need to assume the losses and be required to bring in fresh capital. This may also necessitate a reduction in the number of banks. In parallel, foreign loans and State assets could conceivably be used to recapitalize the sector (see below). As the above is not likely to be enough, there is a near certain need for reducing portions of large deposits and swapping them into bank equity.
- Preserve social peace through a focus on social justice. This involves a distribution of losses that is concentrated on the richest in society while sparing small bank depositors. Foreign funding should be used to blunt the pain of adjustment. A safety net must be put in place to fight poverty and support health and education. And workers should be helped to transition out of decaying sectors into those that benefit from the devaluation.
- Re-think the FX/monetary policy mix. The fixed (and overvalued) exchange rate regime has contributed to large current account deficits, hurt export-oriented sectors, andforced BdL to maintain elevated interest rates. Looking forward, we recommend a more flexible exchange rate arrangement centered around a weaker LBP. However, until confidence in the LBP returns, it will be dangerous to allow the currency to freely float. Some form of currency management will have to be maintained for the medium term.
- Secure a multi-year Stabilization and Structural Reform Facility. We estimate that a three-year $25 billion fund is needed. This facility should be used to shore up BDL’s net reserves, help fund the immediate government budgetary needs, finance badly needed social spending, and contribute to bank recapitalization. The economic program recommended above can garner this kind of support, including from the World Bank, the EU, and the GCC. However, it will realistically require an IMF program as an umbrella. We also think there is scope to partly fund this facility with state assets and possibly hoped-for oil and gas revenues. We cannot overstate the importance of good governance, transparency and accountability in this regard.
Conclusion
The consequences of the current path are catastrophic. Delays will only increase dislocation, exponentially magnify the needed adjustment, and place the burden on those least able to shoulder it. A better option is available. It won’t be easy, may at times prove painful and will certainly require a new social contract. But we sincerely believe this approach will pave the way to a better and prosperous future.
Signatories (in their personal capacities)
Firas Abi Nassif, Edward Asseily, Bilal Bazzy, Hala Bejani, Amer Bisat, Henri Chaoul, Ishac Diwan, Haneen El Sayed, Ali El Reda Youssef, Saeb el Zein, Nabil Fahed, Philippe Jabr, Sami Nader, May Nasrallah, Paul Raphael, Jean Riachi, Nisreen Salti, Nasser Saidi, Kamal Shehadi, Maha Yahya, Baasam Yammine, Gerard Zouein
Comments(37)
What about bank deposits? Will it be lost or haircut?
What is a viable firm ? PNL ? dept to equity?
Typo: "7. [...] Complicating matters, banks are highly exposed to the BdL who’s own balance sheet is impaired. " *whose*
Please consider an Arabic translation for this article.
The program seems sound however a free float of the Currency should be a starting point. On the other hand a better management of the public sector seems a must including the urgent reforms in nearly all public institutions including fighting corruption. I see privatization as the only solution and a rapid one as first priority. The disposal of assets could also solve the problem of the gouvernement bonds as part of these bonds could be swapped against shares of the government assets that will be listed later on on the stock markets.
privitisation will be a bad idea as at best it will promote highest corruption rates and deals like MEA story before
While the proposed plan seems to have a lot of merit, it neglects to bring into sharp focus the fact that a large portion of the needed funds to implement this or any plan can be obtained through the recovery of the state looted funds. What needs to be done before the begging rounds from friendly states begin is the establishment of an independent court to try the looters and recover the stolen funds. Once the recoveries are accomplished, many solutions can be crafted to ease and eliminate the existing financial problems. None of the points presented address this reality. This endeavor should be the first point on the list as it will facilitate greatly the denouement of the crippling financial situation Lebanon is enduring.
Ideally, yes. But how long will these trials take? Three, six months, a year? Time is of the matter and there is no guaranteed outcome of these trials even under an independent court. Even under the most optimistic of scenarios whereby the looters are forced to recover the funds, do you believe they will be able to do so?
Set-up with the help of friendly nations courts to recover the looted funds quickly and imprison the looters. Problem solved. Let me do it.
Financial plan to resolve financial problems, what about Economic plan to build new economic model for Lebanon?
It looks like a good step forward in the comprehension and application of appropriate mesures. However no mention of macroeconomic aggregates are presented; Production, investment, inflation, work force etc... It would be perfect to share with the Prime Minister designed who ever might be or will be and accompanying it with a sort of petition signed by notable and imminent Lebaneses inside and outside the country.
Nothing on sectarianism and its deep rootedness in the current political, economic, and social realities of Lebanon, nothing on holding the corrupt accountable, nothing on building an independent judiciary, nothing on building viable and robust unions, nothing on strengthening exports. These people are too caught up in their own neo-liberal narrative. They lack the political wherewithal to realize that their suggestions are dead on arrival. Political naivety and a lack of understanding of how Lebanon and its institutions operate. Pumping money into the system in its current form is flushing the cash down the toilet. Economic, fiscal, and monetary reform suggestions are applaudable, but they're easy to come up with and conceive. It doesn't take a genius to suggested what these fine people did. What we really need is to couple these suggestions with an implementable political reform process that will ensure that these steps will actually materialize in a more stable economy, at the heart of which is an independent judiciary and reformed legislature and executive body. This necessitates a radical transformation in the way politics and policymaking is conducted in Lebanon. In essence, what is being been proposed here is only as good as the government's competence to enforce it as a legislative and executive body, and not as a feudal and tribal assembly that masks its self as a government today. Step 1 above all else is the collapse of the current political system in order to implement the proposal above.
Thank you Guys for the initiative. I hope it will spark a positive change we desperately need.
The first step is critical. There should be an unconventional mechanism to address the urgency, in order to successfully operationalise the needed solutions and initiatives. The proposed Steering Committee should be in the form of a standing Strategy Task Force that meet continuously to decide, peer review and monitor objectives and initiatives, and package and cascade them to Sectorial Sub-Task Forces to manage implementation. For Step 8, the overarching objective is to create public value in terms of citizens well being while maintaining the country's economic growth. The two issues may seem conflicting, and a virtuous balance should be reached subject to a citizen-centric philosophy. This should be translated in real terms to quality and efficient service delivery by government on one hand, and enable a productive and knowledge-based economy , on the other.
intensity new agricultural projects with attractive interest rates for sme and adopt strategies to increase productivity for less reliance on imported items with incentives and targets to meet at every level can be considered and promoted in association with support from various local universities and institutions for monitoring success of implementation over periods among others to increase exports and employment
what happened to the prosecution of government officials and the recuperation efforts of the billions of dollars swindled by these same corrupt officials who made obscene fortunes on behalf of the people since 1992 shall we say gone with the wind?
Great to see such efforts. However the first rule is simple, you can't build or change on rust.. rebuilding should happen only when the current system is put to bed. Lebanese fundamental structure & mentality should change. Or else, all efforts will not be materialized.
thank you for the very informative article. As for the common citizens who are used to be deceived by the government, we can only hope for the worst and try to minimize our personal losses as much as possible.
Very good analysis of the situation and proposed solution! Good luck guys, and thanks
Excellent analysis of the situation. However, Lebanon can not keep borrowing forever the sums it cannot pay back. Lebanon has to stand on it's own feet knowing that the world does not owe Lebanon it's living. The world has created institutions such as the world bank and the IMF to come to the rescue to such situations. At the same time the people must elect non corrupt politicians to run their country. Lebanon must jointly with the IMF produce a credible economic and public reforms program to return to economic growth and prosperity under the supervision of the IMF. Simultaneously the Political parties must agree to these reforms and sign in to the program.
why cnt the government mortgage the gold (14 billion usd) sell mea, the two cell phone companies, casino .... contract out the operation and management for 10 years or more.... i suppose that would bring in more than the 20 - 25 billion usd required . even more, you can give the option of bank depositors to own stocks in the previously mentioned assets in return for their cash in the bank. it gies without saying that this operation would have to be managed by a credible and clean entity.
why cnt the government mortgage the gold (14 billion usd) sell mea, the two cell phone companies, casino .... contract out the operation and management for 10 years or more.... i suppose that would bring in more than the 20 - 25 billion usd required . even more, you can give the option of bank depositors to own stocks in the previously mentioned assets in return for their cash in the bank. it gies without saying that this operation would have to be managed by a credible and clean entity.
why cnt the government mortgage the gold (14 billion usd) sell mea, the two cell phone companies, casino .... contract out the operation and management for 10 years or more.... i suppose that would bring in more than the 20 - 25 billion usd required . even more, you can give the option of bank depositors to own stocks in the previously mentioned assets in return for their cash in the bank. it gies without saying that this operation would have to be managed by a credible and clean entity.
The first crisis to address is the “ dysfunctional sectarian system that hindered rational policymaking and permitted a culture of corruption and waste. The country, led by the public sector, lived beyond its means.“ without sorting out no hope.
An ambitious plan. If the Lebanese and the international community start to work on it, it may work, but it will not solve problems short hand. I wonder how tourism (one of the four pillars of Lebanese economy) will be affected by the actual crisis.
Very theoretical and not taking into account specificities of the Lebanese landscape. Should stress more on anti-corruption effort.
One common problem with all such doctor prescription recommendations is that they assume that lebanon exists in a sanitized region devoid of animosities and in-fighting. What about the factions in lebanon that want to keep the fight going on with israel and the US. Is lebanon recovery possible in such cases, can we really be Hanoi and Hong Kong at the same time, i know lebanese are so resourceful and may after all be the cherished people of god endowed with great talents but can they pull out such a feat? shouldn't your article mention something about toning down the level of militancy in this country to concentrate more on putting our house in order
Thank you for your efforts, frankly I was expecting more tangible recommendations from experts like you.
You have indicated “Finally, international financial support is likely to fall far short of what is needed to relieve the economy”. “A three-year $25 billion fund is needed”. I do agree with you that Lebanon needs support and funding. However, financial aids to boost the stagnant economy from the outside world will be very costly to Lebanon. Nothing is free, and any forward step in this regard will lead to political and social disasters in Lebanon; meaning that, Lebanon will be used as a hostage to the lending countries or institutions including IMF. The Metaphor to Lebanon’s situation is like a boat out of gas, stuck in the middle of the ocean and waiting for rescue (Boat towing). Lebanon needs to depend on itself and use its own resources to come out of these crises. Following are my 12 suggestions that I have already provided several officials in Lebanon beginning early 2016: Subject: Economic Feasibility and Reform Plan for Lebanon Suggested reform plan for Lebanon’s economy, provided that Lebanon depends on its own resources and personal initiative. To repair the current economic and social dilemma in Lebanon, immediate measures and action needed to be considered and implemented by the local authorities including the following suggestions: -Declare a national economic emergency call. Set up priorities and objectives and create a reform program. -Lebanon applies an Income Tax policy on all Lebanese citizens working or doing business abroad. This Income Tax measure excludes Lebanese holders of dual citizenship. -Private and public sectors engagement and involvement and partnership. For the government seeking to rectify or expand its infrastructure, the public-private partnership offers an option that lies somewhere between public procurement and privatization. Ideally, it brings private sector competencies, efficiencies, and capital to improving public assets and services for better performance. -The government to stop borrowing funds; unless specifically identified and itemized. -Allocate accurate budgets for government expenditures. -Show positive political reform performance and enhance progressive measures in reflecting good intentions to improve the country’s image locally and internationally. - Interest Rates on Foreign currency investment: Lower the interest rates on Treasury Bonds including rates offered by the commercial banks and apply reasonable International interest rates. This step will boost the economy and yield better outcomes especially, on the Real Estate sector. - Assessment of the value of fixed equities in Lebanon (Lands). This is done by applying new assessments on the actual value of the lands owned by the public sector. This would be reflected as a valuable asset on the public debt. The Lebanese government could invest in those lands and generate profits. - Invest in leasing one of Lebanon’s Gas Field Blocks for a specific period and use the funds for reconstructing and updating Lebanon’s infrastructure. -Real Estate Sector: Encourage every Lebanese citizen working or living abroad to purchase a property (land or apartment) in Lebanon with a Low interest rate with a 15% down payment to be paid off by installments over a period of 15 or 20 years. Such positive step shall prompt the economy in all its aspects and sectors and stimulate the sentiment of both, residents and non-residents equally and will eventually increase the demand on real estate. -A period of 10 Year Tax Exempt to be granted to those Lebanese working abroad if and when they purchase a property in Lebanon. - Apply the Decentralization System and create awards for the best town performance including: management, security, safety, and outlook. -Reforms in infrastructure: Public works (Roads and pavements), privatizing water, energy, health.etc, Robert Shafie Ph.D., MBA Boston MA Jan 31, 2020
I commend and support the analysis produced by this scientific gathering of economists. However, what is thin on the ground is how to deal with the multi faction fabric of Lebanon. Each has its own agenda. Lebanon has lived with these factions for many years and should know their supporters and backers by now. Bearing in mind that the violence and guns have produced nothing. For these reasons, Lebanon needs to Internationalise their problem and possibly think of organising an Economic and Reconciliation Conference which would include the UN's IMF and the World Bank, plus all the faction's International Supporters at Foreign Secretary level to start with. First, Lebanon needs a credible elected Representative Government. Good Luck Beautiful Lebanon
Two golden opportunities for the banks and their potential depositors in Lebanon Due to the financial and economic conditions that Lebanon has been going through, which has left a negative impact reflected on Lebanon’s financial, economic and social life. Equally, many businesses and companies, and due to similar financial reasons, are no longer able to dispose or withdraw their deposits from the Lebanese banks. Recently, no serious steps had been made in finding any legitimate solution to end up the conflict encountering the banks and their clients; consequently, alleviate this financial dilemma. In this context, I am proposing the following two solutions as a common denominator to keep the specter of bankruptcy away from banks that suffer financial lawsuits filed against them and also to protect the depositors track their dislocated funds. Considering these two solutions important measures have to be implemented prior to any further decisions: - Declare a financial and economic recapture emergency call: Freeze all creditors and debtors interest rates for 6 months on Lebanese and foreign currencies, retroactive January 1, 2020 and ending June 30, 2020. This will include all interest rates due to the lending banks and the interest rates due to depositor’s savings accounts etc…, provided that all payments due to the banks must continue as scheduled between the bank and its client. - The Central Bank of Lebanon (in all its branches, to create a temporary centralized bank services unit) will take charge of customer’s withdrawals, deposits, transactions and all other financial services on behalf of the Lebanese commercial banks. This will exclude legal activities, bank stocks, liquidations of the debtor’s assets, reacquisition and the selling of real estate for those who fail to pay off their bank loans including the mortgages. - All payments and transactions including personal and business loans should be settled by checks, debit/ATM cards or money orders. - Stipulate a new law limiting all foreign cash currency in transit (commercial and personal); unless, otherwise specified. The first option: Re-own properties and fixed assets by the bank and their potential depositors In this scenario, the bank offers its customers to use their deposits by buying these properties on the basis of face value or to pay back the value of the debt that was originally required by the debtor or the property owner. Applying this financial equation, the bank retains the value of the principal debt and equally the depositor will regain an equivalent value of his/her outstanding deposit with the bank. As a result of this mechanism, the accounts are cleared and give a booster to the real estate and banking sector; thereby helping the economy to flourish. The second option: Stock or share arbitrage between banks and their potential depositors The Commercial Bank offers its depositors to purchase stocks (Market Value) equivalent to the outstanding depositor’s money held by the concerned bank. Consequently, This process entitles the depositor to become a stockholder. This step will help in guaranteeing the depositor’s funds, and accordingly, access, control and accountability of the bank’s officials for any decision or breach of trust. This step will safeguard the depositor and maintain the bank’s entity as a key factor in the acceleration of the national economy.
I am sorry Dr Shafie but your banking solution on handling debtors and creditors will not work. The Central bank and even the Commercial banks cannot physically manage all the economic/ financial problems as they do not possess enough trained staff to do that. The solution should be/have been with the Central bank and with its executive powers it can regulate the financial situation early in the crisis, e.g. to impose percentages on the banking sector to retain enough capital to cover their own transactions and business dealings, etc..etc.. This is to avoid what has happened similarly in the 2008 primary market crisis in the USA when several banks around the world went out of business. The Central bank should have been aware of this and should have been monitoring the market diligently. What is happening in Lebanon is a Politico/Economic crisis where the Central bank could have used its powers early to direct and regulate the banking sector. Now only a large loan will alleviate the situation and bad debts will need to be scrapped, as many people and businesses are bankrupt.
Lebanon needs to depend on itself and use its own resources to come out of these crises. In the mid 50s a small industrial sole proprietorship company in the Midwest was unable to meet it obligations mostly salaries; thus, was facing bankruptcy. The owner offered his staff to exchange or trade in stocks for their outstanding wages in the business. This step was positively reflected on the business operation and production to become one of the leading industrial companies during those days. Any positive step in resolving the current financial issues would be a great step. Lebanon needs support and funding. However, financial aids to boost the stagnant economy from outside will be very costly to Lebanon. Nothing is free, and any forward step in this regard will lead to political and social problems in Lebanon; meaning that, Lebanon will be used as a hostage to the lending countries or financial institutions including IMF and the World Bank. Metaphorically, Lebanon is like a boat out of gas, stuck in the middle of the ocean and waiting for rescue. Lebanon needs to depend on itself and use its own resources to come out of these crises. Two choices would reverse the outstanding internal financial problem are to be considered: 1- Encourage bank creditors to Incorporate and invest their outstanding The Commercial Bank offers its depositors to purchase stocks (Market Value) equivalent to the outstanding depositor’s money held by the concerned bank. As a result, this process entitles the depositor to become a stockholder. This step will help in guaranteeing the depositor’s funds are invited in the bank, and accordingly, access, control and accountability of the bank’s officials for any decision or breach of trust. This step will safeguard the depositor and maintain the bank’s entity as a key factor in the acceleration of the national economy. 2- Lebanon ownership of lands which have a substantial value. Lebanon should reconsider reassessing the market value of its fixed assets (Lands and Buildings) and start investing in those assets in creating new projects and invite those bank creditors to participate and invest in the intended projects. These two vital steps are expected to change the present financial image of Lebanon from negative to positive status. Robert Shafie, Ph.D., MBA Boston, MA, Emil: robertshafie@hotmail.com
Suggestion: A new concept for Lebanon needed at the moment is a temporary or provisional government. Lebanon needs to attempt to create and appoint a new temporary government or a shadow government in order to maintain, process and implement the current public services and outstanding issues in the country. Transitional or provisional governments are generally appointed, and frequently arise, either during or after civil or foreign wars. Temporarily describes something that happens for a limited amount of time and supposed to be concluded in a finite amount of time. A provisional government also called an interim government, an emergency government, or a transitional government, which has nothing to do with the previous governments or political parties and will be excluded and disconnected from any political or religious agendas and therefore, considered as temporary official employees. Its mission is to execute and accomplish a dedicated platform and will be automatically dismissed once an official government is appointed. This temporary government will have the authority to manage a political transition generally in the cases of new nations or following the collapse of the previous governing administration. Provisional governments maintain power until a new government could be appointed by a regular political process. They may be involved with defining the legal structure of subsequent regimes, guidelines related to human rights and political reforms, the structure of the economy, government institutions, and international alignment. This suggested temporary or provisional government which will report directly to the president of the country will remain and operate until a formation of an official government to takeover and continue its legislative mission according to the laws that govern the country. This suggested temporary or provisional government will be legally accountable and held responsible and liable for its actions and the safe turn and transition of their responsibilities and offices. “Extraordinary crises sometimes require extraordinary measures. The danger is that the extraordinary could become merely ordinary”. Sources: Jonah Goldberg OCTOBER 17, 2008 / 3:48 PM / NATIONAL REVIEW ONLINE. “A Temporary Government Takeover?” Caretaker government". Credo Reference. Dictionary of politics and government. Retrieved 18 December 2015. Prepared by: Dr. Robert Shafie Ph.D., MBA Boston MA Sunday Oct, 11, 2020 @ 5:28 pm
The government has the responsibility to consider the opinions and proposals of Lebanese experts, who have proven times and times again they are able to manage such endeavors. Lebanon’s economic crisis is not above the skills, talents, and capabilities, of the Lebanese diaspora, who have distinguished themselves in the most reputable financial institutions worldwide. They can help us get our country back. If the time isn’t now when is?
I appreciate your feedback and support of the Lebanese Diaspora. Yes we believe! The main idea is to dismantle the existing political tension and economic collapse and create an auxiliary setup or a rescue temporary government as a separate entity. This step will be implemented irrespective of any political or legislative measures or protocol considerations. This temporary rescue government will be created and presided by the president of the country and the positions would be assigned to successful and qualified Lebanese including foreign advisors to run the show. This temporary government will remain active and valid until the formation of an official government to continue the mission with a smooth hand out and transition.
I wish to congratulate the writers of this Carnegie report. Since 2005, the year upon which I returned to Lebanon after a thirty years absence, I have not ceased one moment my calls for restructuring the Public Debt to 1.5%, with retro-active effect to 1/1/2016. These repeated calls were NEVER answered. My request to Lebanon's leaders is that they should at least answer mt call, either by providing evidence and explanation of their refusal, or present an alternative and better solution to the problem.May I conclude by saying that I would greatly appreciate the opportunity to meet with the members of the Carnegie's team, to get their opinion on some straightforward alternative debt repayment solutions that I would like to present to them, with a view to get their opinion on the subject. I would appreciate your e-mail reply to this request. Sincerely yours, George Sabat, ACMA
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