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One can assess the thickness of the fog in the local scene by calculating the number of question marks in newspaper titles, TV news, or the comments of “specialists” in talk shows. It is the talk of the country. Each time a guest is asked to explain what might transpire; the answer is always the same: “I have absolutely no clue”. And the reply: “Well then it has to be explained in ten minutes”.
It is exactly the case when it comes to the tale of the Central Bank’s heritage. Trendy topics are legion: extension, resignation, current affairs, succession, Sayrafa, exchange rate, speculation, etc.
To avoid adding an extra layer of fog, let us look into some hard facts from today’s situation:
- A central bank cannot solve a financial crisis on its own, no matter who its governor is. Its action must be part of a more global plan that simply does not exist. Real power lies elsewhere, especially in a country taken hostage, like Lebanon. A central bank is however a fundamental pillar, and the governor’s job is a very difficult one. This was made clear by the statement of the Federal Reserve’s president, made in 2008 and more recently following the fall of the Silicon Valley Bank: “We should have been more vigilant, we have to improve the system”.
- Too much credit is being given to this platform called Sayrafa. It was built to regulate the exchange market and mitigate damage. We know for a fact that it has failed, before it succeeded, but its success – three months ago – is a relative one, one that was made possible by a specific context: fresh dollars are being pumped into the market like never before.
- The post-Salameh era is shaping up to be quite problematic. First, because the vice-governors are not on the same track. Some wish to resort to Bloomberg to manage the platform, a farfetched idea. How can one plan to privatize such a critical institution, and what mission can be given to it?
Others consider eliminating it completely, convinced as they are that it lacks transparency, which is as unrealistic. In fact, a central bank is not supposed to share its plans with speculators and the larger public. These are its work tools, its defensive weapons. A military leader simply does not disclose information pertaining to the arsenal he plans to use to repel an attack.
Add to all this the fact that, apparently, none of these officials know exactly how Sayrafa works, except for governor Riad Salameh – and to a lesser extent Marianne Hoyek who, legal issues aside, seems to have tremendous competencies.
That being said, another critic seems more plausible: Sayrafa is profitable to civil servants but also to a number of privileged individuals who make easy money from exchange transactions.
- Another problem inherent to the four heirs to the throne is linked to their respective political affiliations. Whatever may be said, Riad Salameh was no leader’s follower, at least since the death of Rafic Hariri, and still….
The proof is that Salameh – when it comes to both governmental plans and daily matters – is the only person that is blamed for all things related to devaluation, inflation, banking problems, corruption, public debt, famine in Africa, and global warming.
Clearly, he was not immune to the virus of political intervention. But who was? Riad Salameh did have his occasional political supporters, but he had many more enemies, some of which have chosen to be as such.
Things are different as far as the four “vices” are concerned. Their political affiliation is secret to no one. This will make their task difficult, considering that shared governance is a possibility; nobody wants to govern single-handedly, and no one wants the other to lead alone. Respective egos will do the rest.
These specific political affiliations are making the Americans particularly uncomfortable. After all, a central bank governor in Lebanon is bound to be especially alert to the calamity called Hezbollah. Some believed, and wrongfully so, that Salameh and Hezb went to bed together. The former would have been eliminated a long time ago if it were the case.
However, the governor has to obtain the Americans’ approval, lest the central bank be black-listed and financially cut-off from the rest of the world. This has happened to the Iranian and Russian central banks, and even to the Iraqi at a certain point.
The question remains: how did we get to this? Some think it was a coincidence, or an imperative of sorts. Others believe in Santa Claus, mermaids, and dragons. But reality is very simple: another pillar of the Republic has to be deconstructed.
