The worst is yet to come…

Beirut October 07, 2022: The Lebanese Business Leaders Association (RDCL) board of directors held a meeting presided by Mr. Nicolas Boukather. Following the press releases, studies, and meetings carried out by RDCL, the board unanimously agreed on the necessity to elect a new president of the Republic within the constitutional deadlines. A new president who will restore the trust of the Lebanese, residents and expatriates, as well as normal relations with friendly countries especially Gulf states, in addition to the necessity to form a full-fledged government.

RDCL also expressed its fears of plunging into a presidential vacuum, which has unpredicted outcomes, while stressing on the importance of working quickly and effectively to put an end to the economic, financial, and social collapse. Despite the extreme importance that should be assigned to the election of a new president of the Republic within the constitutional deadlines, the parliament and the government must urgently accord the utmost importance to the economic, social, and financial matters, since the current situation does not permit any waiting.

Accordingly, RDCL calls the Lebanese MPs and government for:

First, an immediate adoption of a fair and equitable capital control law, restructure of the financial sector, and adoption of the banking secrecy law, in compliance with international standards.

Second, preparation and adoption of the 2023 budget without delay, based on applicable laws. This budget should be reformatory and must take into account previous proposals of RDCL, in particular those pertaining to the unification of the exchange rate, fighting tax evasion and smuggling at borders, and the activation of the Public-Private Partnership Act as a prelude to reduce public employment in the country.

Third, an urgent implementation of the much-awaited necessary reforms by the government, especially those related to the electricity. Noting that the electricity tariffs should be increased to be less than two thirds of the private generators’ prices, collection activated, a regulatory of specialists formed, and the Public Procurement Act effectively triggered.

Fourth, adoption of the independence of the judiciary law. Bearing in mind that without it, the state of law and accountability that we aim for cannot be established, since it’s the judiciary’s responsibility to prosecute the corrupt to set an example.

Fifth, pursuing the negotiations with the IMF, and urgently concluding a fair and balanced deal as soon as possible. This deal will allow Lebanon to re-enter the international financial markets, strengthen confidence in the country, as well as paving the way for international funds for the private and public sectors that are currently paralyzed. Moreover, it will contribute to the attribution of responsibilities and the verification of the sources of deposited funds, the progressive restitution of small deposits and other depositors’ funds, in parallel with reforms of institutions owned by the State, in partnership with the private sector and under its direction.

RDCL considers that the alternative to the restructuring and reform plan, and the inaction that has been going on since the beginning of the crisis and over the past three years, has led to catastrophic outcomes for all parties involved, and is still till this day. It is expected that the currency collapse will accelerate, due to which all deposits will lose their value. Moreover, some banks will go bankrupt and will lose their deposits, in addition to an accelerated inflation that will impact everyone. Not to mention the risks of legal actions of Eurobond holders against the Lebanese government, and all the disastrous consequences they may have, in addition to the downgrading of the rating of the financial sector, that is already in chaos amid the amplification of the cash economy. In the same line, it is expected to observe a growth in the parallel economy that will increase at the expense of the legal economy, in addition to the loss of productivity and talents, an increasing corruption, the paralysis of the public sector, as well as an acceleration of turbulences and instability.

It is worth mentioning that the world countries and international organizations are currently facing unprecedent difficulties on all political and economic levels. Noting that the interests of friendly countries and international organizations in Lebanon are steadily declining, and their faith in the country’s ability to recover is also slowly fading away. Therefore, since Lebanon’s chance to recover is weakening day by day, the time has come to quickly and seriously make difficult decisions.

In conclusion, RDCL stressed the need to have a unified economic and reformatory vision, and to agree on a common plan for financial and economic recovery among all parties. RDCL made all needed efforts in this direction, and is open to finding the needed solutions. The situation has become extremely serious. Every day of delay in approving the budget and the necessary laws to implement the reforms, and in signing an agreement with the IMF, causes Lebanon to suffer enormous losses estimated at tens of millions of dollars daily, draining the remaining central bank reserves and squandering the remaining funds of Lebanese depositors. RDCL holds accountable the authority and populists, for rejecting all plans without suggesting any compelling alternatives. It’s time to act, following the enormous damages that have been caused due to inaction and procrastination. It is time to confront reality with courage, responsibility, and immediate action without any reluctance.