Stock-Lebanon-Depositers-Protest
Endemic corruption means that no depositor in Lebanon knows what really happened to his missing funds. Image Credit: Shutterstock

Corruption is not only the most significant impediment to development, but a destructive factor where it affects all economic and social activities. As has been the case in Lebanon and Iraq. In Lebanon, depositors’ money with the banks, amounting to $145 billion, vanished in 2021, which led to widespread impoverishment for citizens, the incurring of heavy losses for companies, and even bankrupting many due to the lack of liquidity.

The disappearance has not resulted in the ruling party showing any sense of remorse. On the contrary, Riad Salameh, the Central Bank Governor, was protected by the ruling party to the extent that he defied the judiciary and refused to attend the trials of his financial excesses amounting to more than $500 million.

Trying to accommodate nonstop demands by depositors over three years to solve the deposit crisis, the government came up with a mind-boggling solution, saying that it would compensate by allocating 20 per cent of the promised income from selling gas. But where is this gas? So far, no gas production has started, and it is not expected to start in the near future due to the maritime border disputes with Israel and Hezbollah’s escalation in this regard.

‘Where’s the bridge?’

Therefore, this promise is nothing more than gibberish, and similar to the anecdote of a finance minister from one of the African countries visited a peer in Europe, where he found him well-off. So, he asked, "Where did you get all this from?"The finance minister in Europe accompanied him to the window, and asked: “Do you see the bridge there?’ A 10 per cent commission explained his prosperity.

Then the European minister visited his friend in Africa, and saw him in good financial health. He in turn asked, ‘Where did you get this from?’, whereupon the host took him to the window. He put the same question, "Do you see a bridge there? There is none…”

The situation with Lebanon’s gas is exactly the same. In the future, the country’s minister of energy will visit a gas-producing country and see the gas torch, which generates 10 per cent. But when a minister from that country exchanges a visit with him, he will not see any gas flame, as all potential revenues have been seized even before seeing the flame. As for the depositors who are promised 20 per cent of the gas revenues, they must write a will to their great-grandchildren to receive the compensation…

Corruption has indeed turned Lebanon into a failed state in which economic and living conditions are deteriorating under the rule of armed militias, who protect the corrupt and carry out illegal activities, such as drug trafficking and smuggling. This has led to the flight of capital and deterioration in economic conditions. This is happening amidst foreign support and protection for the ruling party, which is pressuring the GCC states to help Lebanon through subsidies, loans, and development projects.

GCC’s bitter experiences

But wait - the GCC had pumped billions of dollars, including deposits with the country’s Central Bank over the past two decades to strengthen their financial conditions and support the Lebanese pound. But the results, unfortunately, were disappointing for the Gulf countries, as the funds allocated were looted. It is not known where the deposits allocated to support the Lebanese currency have gone. In addition, the GCC countries lost $11.3 billion in investments, according to the Lebanese Chamber of Commerce.

Therefore, the Western countries supporting the corrupt class should stop their attempts to pressure Gulf states, which will not work out. The GCC states are fully aware of the extent of corruption there. Instead, the West must invest in Lebanon themselves, and any refusal to do so is highly suspicious.

It does not seem that there are quick and magical solutions to Lebanon's economic conditions, as it is necessary to end the rule of militias. In addition, voters in Lebanon and Iraq bear a heavy responsibility for the scourge of corruption and the deterioration in economic conditions.

In the recent elections held by Lebanon and Iraq, people re-elected the same two corrupt political parties, although voters in both countries had an opportunity to get rid of them and change the situation there. Yet, the victim somehow likes his executioner for chauvinistic or sectarian reasons, regardless of the costly price that they and their grandchildren will pay…