Central Bank Gov. Riad Salameh said in an interview with Euromoney magazine that the presence of the Syrian refugees in the country has cost Lebanon $13 billion over the past five years,.
“The Syrian refugee crisis is a huge concern for Lebanon whose cost, according to the U.N., has reached $13 billion in five years. This conflict has adversely affected our BOP ( balance of payment). If we did not resort to some financial engineering, the deficit would have been higher than what was expected in 2016. It is in the interest of Lebanon to see the end of the Syrian war. We can have some visibility as to what will happen with the Syrian refugees, which is the issue for us,” Salameh said.
He stressed that the Lebanese government is endeavoring to obtain funds from the international community to weather the negative effects of Syrian refugee crisis.
“It is important that the government get funds, in a way or another, for investments in the country, as a way of compensation for Lebanon. Lebanon has already benefited from f contributions, particularly from outside the government channels, which has helped stabilize the Syrian refugees’ social situation in Lebanon,” Salameh said.
Addressing the issue of investments in foreign markets he said that Lebanese who invested in the U.K.’s stocks and real estate incurred heavy losses after Brexit. “Brexit led to a big devaluation of the sterling pound, and the election of President Trump had the most significant impact on [the] stock market within the past two years.
The drop in the sterling pound has caused a reduction of wealth for the Lebanese ,” the governor said and added:
“However, since we are a dollar based economy, the net worth of Lebanese citizens has increased, when you compare the dollar to the euro or sterling pound. In fact, Lebanese have also invested in financial markets, which have created good returns so far,” Salameh said.
Addressing globalization and protectionism, Salameh said globalization, in the way it prevailed in past years, has ended.
As for Lebanon’s economic outlook, he said compared to the last two years, Lebanon now has the basis for better growth, owing to the political stability achieved through the election of President Michel Aoun and the formation of the government of Prime Minister Saad Hariri.
“The liquidity in the banking sector is high. Our policy is not to increase interest rates, but we we have to observe how things will evolve in the coming months, especially during the summer, in order to be able to give figures about the growth in 2017, although the IMF and some other institutions are expecting a growth between 2 and 3 percent,” Salameh said.
Salameh was very upbeat about the future of the technology sector in Lebanon. “In three years, Lebanon has positioned itself in the Middle East in the first or second rank. Eight hundred companies have been created and several funds are active and invest in the digital economy sector. Lebanon has a future in this sector. In today’s world, a country that does not have such a sector is not a viable country,” Salameh stressed