The political turmoil in Lebanon, following the assassination of ex-Premier Hariri, is taking its toll also on the economy.
Hariri was the mastermind of the Paris Two accords in 2002 that averted a sovereign debt default in Lebanon. He was also the controlling shareholder in Solidiere, the development company that rebuilt downtown Beirut. On the top of this, Hariri provided the credible economic leadership for a decade that enabled the country to lure private capital from the Arab world, estimated at some 11 per cent of GDP.
According to Khaleej Times, as the political crisis erupted the Central Bank of Lebanon (CBL)'s Governor Riyad Salameh has ordered to intervene massively in the foreign exchange market in order to avoid the collapse of the Lebanese pound.
However, it seems that the growing opposition to the Syrian presence in Lebanon may pose another threat to the stability of the Lebanese economy. According to the Kuwaiti Al Siyasa newspaper, Syrians, including senior officials, have withdrawn recently some US$3.5 billion deposited in Lebanese banks. One bank owner told the newspaper that out of US$10 billion held in Lebanese banks by Syrian officials, senior officers and businessmen, some $3.5 was withdrawn in recent days. According to him, the CBL has ordered not to publish this information in fear that the local economy will collapse.
It should be mentioned that over 1 million Syrian workers are currently employed in Lebanon. The bulk of their income is sent it to their families in Syria. Syrian workers remit around over $4.0 billion from Lebanon to Syria every year.