Business strike planned in Lebanon
Lebanese business leaders have announced plans for a national strike to demand that the country’s Syrian-backed government step down.
The nation’s markets have been relatively calm since the murder of former prime minister Rafiq al-Hariri, but this new development raises the spectre of turbulence in the future.
Monday’s planned action would coincide with an expected vote of confidence in parliament, two weeks after al-Hariri’s assassination in a bomb blast for which the opposition has blamed the government and its Syrian backers.
Syria has denied the allegations.
“The economic authorities call for the formation of a new and
neutral government which has the people’s support and the trust of the international community and Arab countries,” a statement from the private sector said.
It called for a “total shutout in memory of Rafiq al-Hariri”, father of Lebanon’s post-war reconstruction, and backed calls for an international investigation of his assassination.
The statement was signed by Lebanon’s association of banks and industrialists as well as the chambers of commerce and industry.
Market stability
“The economic authorities believe that restoration of the
democratic regime is an essential condition to establish confidence in the Lebanese economy,” the business leaders’ statement added.
Lebanon’s Audi Bank, meanwhile, has issued a study providing some reassurance.
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“The economic authorities believe that restoration of the Statement by Lebanese business leaders |
It pointed out that, since al-Hariri’s death, “concerted efforts
have been made to contain the repercussions of this assassination”.
“The Central Bank of Lebanon, in agreement with the banking
sector, has worked to ensure the stability of the market,” it said.
The study noted the “good financial health of the markets, with central bank reserves at their highest and banks liquidity at historical highs – both elements which helped resist pressures on the national currency”.
Said to have reserves of $13.8 billion, the central bank’s resources would allow a certain flexibility to resist pressure on the pound, international rating agency Standard and Poor’s said.
Bankers said the central bank has fulfilled its pledge to
stabilise the national currency by intervening on the market with about $1 billion.
Central bank
The Lebanese pound traded on Wednesday at between 1510 and 1515 to the dollar.
It has been stable for the past 12 years, with monetary stability having been one of the pillars of economic policy under al-Hariri, who was prime minister five times between 1992 and 2004.
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Al-Hariri was the sheet anchor of |
Economist Michel Trad noted the significant role of the central bank in “containing the panic of small depositors”.
“It is especially needed, given that al-Hariri was a main economic weight in the country and the first employer in the banking and real-estate sectors.
“The Central Bank has asked banks to respect long and
medium term deposits and not to free them ahead of schedule,” he said.
In a sign of confidence, shares of market leader Solidere, the
real estate giant controlled by the slain billionaire tycoon,
regained value on Wednesday after having dropped 15% in the two previous sessions.
Solidere shares, which had been at $9.50 before al-Hariri’s
assassination and fell to a low of $6.86 afterwards, recovered on Wednesday to $7.86.
Political uncertainty
For its part Beirut’s BSI bourse index surged 3.34% on
Wednesday to close at 630.94 points.
Until now, no major capital flights have been recorded,
according to banking sources. Foreign capitals represent 11% of the country’s Gross Domestic Product, according to S and P.
“But if political uncertainty persists, it will be a problem. Tourism, which is an important source of foreign currencies for the country, risks being destroyed in the summer season,” said Trad.
Damage to five of the most luxurious hotels of the Beirut
seafront area has been estimated at more than $60 million, said Tourism Minister Wadia al-Khazin.