Le Président de la République, le Général Michel Aoun, a mis en garde contre une augmentation de la pauvreté au Liban suite à l’explosion du port de Beyrouth, le 4 août dernier, lors de la conférence des Nations Unies sur le développement durable.
Le Liban est traumatisé par l’explosion du port de Beyrouth qui a amené à des pertes humaines, à de grandes pertes matérielles et qui a d’énormes conséquences négatives qui exacerbent une économie déclinante. Cela amènera à une augmentation du nombre de personnes vivant sous le seuil de pauvreté, estime le chef de l’état.
Il a souligné la nécessité de rebâtir le port de Beyrouth, un port qu’il décrit comme une artère vitale pour l’économie libanaise et qui a été dévastée par l’explosion de 2 750 tonnes de nitrate d’ammonium. Les dégâts, souligne le chef de l’état impactent tous les secteurs économiques comme ceux de la santé, de l’éducation, de la construction du tourisme ou encore le secteur alimentaire.
Pour rappel, déjà avant l’explosion du port de Beyrouth, certaines sources estimaient que 55% de la population vivait déjà sous le seuil de pauvreté.
Le Général Aoun appelle par conséquent la communauté internationale et les Nations Unies à soutenir le pays des cèdres pour lui permettre de surmonter les circonstances actuelles.
The explosion of the port of Beirut
As a reminder, more than 200 people are reported to have died and more than 6,500 people were injured in the explosion that devastated the port of Beirut and much of the Lebanese capital on 4 August. 300,000 people are also reported to be homeless as a result of the explosion.
The trail of an accidental explosion on 4 August 2020 of 2,750 tonnes of ammonium nitrate inside a warehouse in beirut harbour, seized in 2014 on a garbage ship, the Moldovan-flagged Rhosus, is currently favoured by the Lebanese authorities. This explosion would be equivalent to that of 600 tons of TNT or an earthquake of 3.3 on the Richter scale.
It is said to have caused a crater 110 metres long and 43 metres deep, a security source said on Sunday (August 9th), citing comments by French experts at the scene.
Speaking in the Columns of the Washington Post on 7 September, the Prosecutor of the Republic, Judge Ghassan Oweidat, revealed that in addition to the 2,750 tons of ammonium nitrate, kerosene, gazoil, 25 tons of fireworks and detonators for use for mines were also present in the same warehouse.
The presence of these products could have maintained the fire and allowed it to reach the temperatures allowing the explosion of ammonium nitrate, some experts point out.
The damage is estimated to be between $10 billion and $15 billion.
The port of Beirut, an area where corruption was widespread
The Lebanese authorities’ refusal to set up an international investigation is linked to the fear that the scale of corruption at Lebanon’s main gate would be involved in almost all Lebanese political parties, including some who are now calling for the investigation, some media sources note, under the guise of a temporary authority to manage the port of Beirut whose appointments were made on official sectarian lines.
Saad Hariri, who has been in question almost because of his closeness to the former director of the port of Beirut Hassan Koraytem for more than 20 years, now denies any direct link with him.
On the spot, operators note that the transit of goods often gives rise to a racketeering. Thus, in order to be able to get goods out of the port of Beirut, important undersides must be frequently paid.
Others note that some shipments are not checked. Goods are also under-billed so as not to pay taxes due to a state in financial crisis.
The investigation into those responsible for the explosion
At present, 33 people are currently under investigation. Among them, the director of the port of Beirut, Hassan Koraytem, as well as the director of the Lebanese customs services Badri Daher, both indicted by the investigating judge Fadi Sawwan, in charge of the investigation.
In total, several security officials and the port of Beirut were arrested.
Some sources point out that the various Lebanese political parties had shared the revenues of the port of Beirut , making it difficult at present to know the responsibilities of each in this explosion.
Several political parties, both majority and opposition, would also like to conclude the investigation quickly, having been involved in various traffickings that take place to or from the port of Beirut. They would like to avoid the degree of involvement of each individual and the security violations necessary to continue their trafficking.
Also, security officials had warned the political authorities several times in recent years, the judicial authorities have not decided on the implementation of the necessary measures of transfer of the cargo.
Sources close to the case also point to the responsibility of several administrations in the port of Beirut, especially since senior officials were aware of the danger posed by the improper storage of 2,750 tons of ammonium nitrate since 2014.
Although the FBI report could not conclude on the origin of the explosion and suggests an apparently accidental lead based on information provided by the Lebanese authorities, Lebanon remains awaiting the results of parallel investigations conducted by France and Great Britain.
On 10 December, Judge Fadi Sawwan indicted outgoing Prime Minister Hassan Diab, former Finance Minister Ali Hassan Khalil and former transport ministers Ghazi Zeiter and Youssef Finianos.
The two former ministers Ali Hassan Khalil and Ghazi Zoeitar, also close to the president of the chamber Nabih Berri, then refused to go to the judge, believing they enjoy parliamentary immunity. However, this immunity has been the subject of controversy, with the Beirut Bar ruling that it cannot be applied in the context of this case.
The latter then obtain the judge’s dismissal in February 2021, the court of cassation, seized by 2 former ministers, the former minister of finance Ali Hassan Khalil and the former minister of transport Ghazi Zoaiter, having decided that the magistrate had motivated his decision whereas his residence is located in the district of ‘Ashrafieh also damaged by the explosion. He was therefore a stakeholder in this case.
Judge Tarek Bitar was then appointed on February 19 . Its name having already been proposed last August as part of the same procedure. At the time, however, he refused to become the investigative judge in the case of the tragedy of August 4, on the pretext of a heavy workload.
In early June, the new judge indicated that 3 hypotheses were examined after French experts have revealed the content of a preliminary report , that of a human error following a welding work which started a fire, an intentional fire or an explosion following the firing of a rocket.
According to the judge, one of these hypotheses would be ruled out by more than 80% following receipt of the report from the French experts which finally reached Lebanon.
There remain 2 hypotheses which are currently the subject of in-depth studies. Some sources indicate that these would be the hypotheses of an arson or accidental fire.
Beginning of July, Judge Tarek Bitar calls for the lifting of parliamentary immunity of a number of officials including the former finance minister, Ali Hassan Khalil and the former minister of public works, Ghazi Zeaiter, 2 close to the president of the chamber of deputies Nabih Berri as well as the former interior ministers Nouhad Machnouk, all suspected of having been made aware of the presence of dangerous substances. He also requested permission to question a number of former officials and current officials of the security services including the director of general security, General Abbas Ibrahim or the former commander of the Lebanese army, the General Jean Kahwaji.
This Friday July 9, the parliamentary bureau and the parliamentary administration and justice committee have reportedly postponed the decision to lift the immunity of the parliamentarians concerned , asking for more information on this.
The same day, Interior Minister Mohammed Fahmi refused to allow the interrogation of General Abbas Ibrahim leading Judge Tarek Bitar to lodge an appeal with the Court of Cassation.
On October 11, 2021, Judge Tarek Bitar issued an arrest warrant for Ali Hassan Khalil after it did not occur in front of him. This arrest warrant will lead to demonstrations in front of the courthouse on October 14, 2021, and the famous incidents of Tayyouneh, the worst sectarian incidents since the end of the civil war between Christians and Shiites. The Amal movement and Hezbollah, co-organizer of the demonstration, will then accuse snipers of the Lebanese Forces of having fired on them.
Lebanon accumulates crises
Lebanon is now faced with several crises, economic crisis, crisis linked to the coronavirus, and now crisis linked to the explosion of the port of Beirut, to which is now added a political crisis due to the resignation of the Hassan Diab government .
The Land of Cedars has been without government since August 10.
For the time being, the release of international aid is conditional on the outcome of the negotiations undertaken with the IMF, which requires that the necessary reforms be put in place, particularly economic and monetary reforms. Indeed, many sources or personalities involved in the case multiply the declarations indicating that the international community will not grant “no blank check to Lebanon”, following the non-respect by Beirut of its promises and its commitment to carry out. the reforms necessary for economic recovery already at the Paris I, II and III conferences in the 2000s.
The banking sector crisis, although masked by the financial engineering operations carried out by the Banque du Liban, had started much earlier, despite the colossal profits announced by Lebanese banks until last year. In reality, the Banque du Liban thus repaid nearly 16 billion dollars between 2016 and 2018, thus emptying a large part of its monetary reserves in favor of banking establishments.
On the economic front, the crisis that began in 2018 came to light in the summer of 2019 with a shortage of foreign currency, which is nevertheless necessary for the purchase of basic necessities in particular. However, a reversal of financial flows had been observed as early as January 2019. This crisis was then accentuated following the unilateral imposition by Lebanese banks of capital controls, thus blocking access to accounts.
In addition, the deterioration of socio-economic conditions led to numerous demonstrations from October 2019, the demonstrators denouncing a political class considered as corrupt and demanding the departure.
After the resignation of former Prime Minister Saad Hariri on October 29, 2019, a new government chaired by his successor Hassan Diab was formed on January 17, 2020. As early as March, the Lebanese authorities announced a state of default on maturing Eurobonds. In addition, Lebanon has opened negotiations with the IMF with a view to obtaining economic aid of the expected amount of 10 billion dollars.
However, the negotiations, now suspended, quickly stumbled over the capacity of the Lebanese authorities to carry out the reforms necessary for the release of international aid as well as on the issue of quantifying the losses of the financial sector. The Lebanese authorities estimate that its losses would reach 241 trillion Lebanese pounds on the basis of an exchange rate of 3600 LL / USD. , that is to say approximately 80 billion dollars, which the local banks refuse via the association of the banks of Lebanon or the Bank of Lebanon itself.
The association of banks in Lebanon has thus activated its relays present in parliament. via the parliamentary finance and budget committee. The latter, where some shareholders and representatives of local banks are present, only quantified the financial losses at 81 trillion Lebanese pounds on the basis of an exchange rate of 1507 LL / USD. .
Henceforth, this encryption of the accounts of the Banque du Liban should be carried out by the firms Alvarez & Marsal for the forensic audit and by KPMG and Oliver Wyman for the normal audit . First approached to conduct the forensic audit, the Kroll cabinet, specializing in the matter was dismissed following pressure from the president of the chamber Nabih Berri, considering the company linked to the Hebrew state .
In parallel, the association of banks in Lebanon presented a rescue plan rejected by the IMF and the Lebanese authorities, providing for the sale of part of Lebanon’s gold and the fixed-term session of public goods. This plan is also rejected by specialists who believe that the sale of public goods could only be done by selling them off because of the current circumstances.
Some sources are now citing losses for the financial sector exceeding $ 100 billion, estimating that Lebanon would now require a stimulus package of 63 billion dollars but only 26 billion at most are available . According to these same sources, all Lebanese banks are now insolvent.
The economic situation has further deteriorated with the deterioration in the value of the Lebanese pound and the implementation of different exchange rates: official exchange rate at 1507 LL / USD, the so-called market exchange rate. for stockbrokers or some companies fixed by the Bank of Lebanon, today at 3,900 LL / USD and the black market exchange rate, which fluctuated until reaching 9,000 LL / USD, in June.
Finally, the explosion of the port of Beirut , which also ravaged much of the Lebanese capital, further aggravated the situation, with damage estimated at between $ 10 billion and $ 15 billion.
Thus, if the growth rate of gross domestic product is estimated at -14% before this explosion, d New estimates point to an economic recession of -24% in 2020 .
At the same time, Lebanon is also affected by the coronavirus. The measures taken by the authorities have proved to be insufficient today and the country of cedars risks losing control of the epidemic, with an almost uncontrolled increase in the number of cases, especially after the explosion of the port of Beirut. Now, current hospital capacities have been saturated for 2 weeks, also leading to an increase in the number of deaths since the end of August.
For the time being, some experts familiar with the matter note with concern that politico-economic interests are more important for certain parties than the general interest in benefiting from economic aid in the face of the crisis, to the point of estimating that traditional divisions political parties have faded from parliament in favor of the banking party and others.
Also, some of these interests would even have gone so far as to threaten a civil war if the reforms demanded by the international community were carried out. However, it remains firm on this matter.
During his trip to Lebanon on the occasion of the centenary of the proclamation of the state of Greater Lebanon, on September 1, 2020, the day after the appointment of Mustafa Adib as prime minister , the President of the French Republic would thus have handed over to the Lebanese leaders, a roadmap for the implementation of the economic reforms deemed necessary and first, a diagnosis of the losses of the Banque du Liban. This roadmap also provided for the establishment within two weeks of a government capable of carrying out these reforms. However, 15 days later, following the expiry of the allotted time, the Lebanese authorities seem to have failed to set up a new cabinet, notably following the announcement by Washington of economic sanctions targeting Ali Hassan Khalil, arms- right of Nabih Berri and former Minister of Finance, the other political parties having accepted the principle of rotation of sovereign ministerial portfolios, namely defense, interior, foreign affairs and finance.
On September 21, 2020, the President of the Republic considers that Lebanon is currently heading “to hell” due to the deterioration of social and economic conditions, further acknowledging that the reserves of the Banque du Liban – currently subsidizing the purchase of basic necessities – will be exhausted shortly.
On September 26, taking note of his failure, the prime minister-designate announced his resignation from the steps of the Baabda Palace, plunging Lebanon a little more into crisis.
For his part, the governor of the Bank of Lebanon Riad Salamé announces, in August, the end of subsidies to essential products within 2 to 3 months due to the decrease in monetary reserves of the Central Bank.
This announcement comes as negotiations with the International Monetary Fund are still suspended and a forensic audit of the Banque du Liban is taking place.
Thunderclap, the firm of Alvarez & Marsal announces its withdrawal from the forensic audit procedure , November 20, 2020 after the Banque du Liban refused to answer 57% of the questions asked , under the pretext of the credit and currency code or even legislation related to banking secrecy, plunging Lebanon into uncertainty. Indeed, this audit is now considered essential for obtaining assistance from the international community. The Ministry of Finance or that of justice considered that the contract did not violate the texts in force.
In his speech on the occasion of the 77th commemoration of the independence of Lebanon, General Michel Aoun indicates that the procedure should nevertheless go to the end and therefore envisages recourse to parliament to force the Banque du Liban to comply while the governor of the Banque du Liban Riad Salamé would be in Paris in order, indicate some sources, to find an agreement with France, leader of the community international organization which remains intractable so far on the need to conduct a forensic audit of central bank accounts.
April 7, 2021, the President of the Republic General Michel Aoun publicly denounced the ill will of the Ministry of Finance Ghazi Wazni and the Governor of the Banque du Liban Riad Salamé without, however, directly naming them in the face of the various pitfalls and obstacles faced with the forensic audit of the Banque du Liban accounts and called for a meeting of the Hassan Diab government to examine this file and reveal the underside of what he almost describes. as a sabotage of the procedure.
The head of state also accused the governor of the Banque du Liban of practices contrary to local financial legislation, such as the use of private deposits as currency reserves. The President of the Republic recalled the various steps taken by certain parties to avoid this audit of the central bank. He also recalled that this procedure is not only a personal request of the Head of State but also of the international community, a prerequisite for the release of funds from CEDRE and the IMF.
In addition, in the face of the crisis, some correspondent banks of the BdL would have closed the accounts , indicates in a letter Riad Salamé.
These would include dollar accounts with Wells Fargo, sterling accounts with HSBC, Swedish krona with Danske and Canadian dollar accounts with CIBS.
According to the governor of the Banque du Liban, these decisions would be motivated by the state of default, the political campaigns targeting the Bank of Lebanon and by “the judicial outcry”, allusion to accusations of embezzlement and corruption against Riad. Salamé himself
