LEBANON, ON THE EDGE OF THE ABYSS

AN APPEAL TO HE MICHEL AOUN, President of the Lebanese Republic, HE SAAD HARIRI, President of the Lebanese Council of Ministers, AND HE NABIH MOSTAPHA BERRI, President of the Lebanese National Assembly.

PART ONE: When we read the newspapers we are overwhelmed by the extent and the size of the problems that occur every day, distract you and your assistants, and prevent you from giving your full attention to the most essential issues that face you, and the entire country. I mean by that, the financial and the economic stability of your country, without which, in comparison, every other consideration pales. In such case I hesitate to raise an issue that is of overwhelming importance, though not everyone would agree with me, unfortunately.

Yes, your Excellences, few would admit that the issue of our Public Debt that we have suffered during the past twenty-five years could be more important than all the others that keep regularly occurring. But, it is not only important, it is vital, your Excellences, and you know it better than anyone else. You are perfectly aware that unless a firm decision is taken regarding the treatment of an issue that has been summarily neglected over 25 years, Lebanon risks to be rated as a "BANKRUPT COUNTRY", in addition to be already described as the third most indebted country in the world. Yes, your Excellences, this is my firm belief. So, assuming I was right, what should we do to address such a serious situation?

PART TWO.: Yes, your Excellences’. I humbly believe that absolutely nothing, prevails over and above the issue of Lebanon’s financial stability, and its international rating.

Should, God forbids, Lebanon come to lose them both or either, the entire country and the fate of six million citizens would be menaced. The only event that could be more detrimental would be the invasion of our country, and its fall under another country’s rule.

If my view is accepted and shared, it would mean that we ought to give this menace the importance that it deserves. Let us see, if the issue of Lebanon’s financial stability is currently truly at risk. Let us examine the facts that we currently face, in this serious instance.

• Fact no. One: Lebanon has been officially rated, a few months ago, as the third most indebted country IN THE WORLD, in relation to its GDP, after Greece and Japan. Such a serious negative evaluation made by an eminent international financial body surely merits the attention that it deserves.
•  Fact no. Two: Parallel to this evaluation, several international finance specialists have recommended the adoption of some special measures, including the restructuration of Lebanon’s Public Debt that would allow the country to proceed more effectively to repay its huge debt to some private lenders, thus solving the entire issue, at the base, and contributing enormously to resolve the entire conundrum., Our Ministry of Finance had initially supported such an initiative, but had to, unexplainably, change his mind after a huge outcry from some Lebanese anonymous sources.Yes, no sooner had Finance Minister Khalil, hinted at accepting such a suggestion, it was met with huge and fierce opposition from, we assume it to be, some Lebanese banking circles. Minister Khalil had to unusually apologize, the following day and declare that he was withdrawing his suggestion, though he never identified the opposing party.
•  Fact no. Three: At this stage I beg the permission to include in this presentation a study from which the reader can clearly see that, unless such a restructuration of the public debt is adopted, Lebanon is bound to fall in bankruptcy because, if the 7% interest rate is maintained, the Public Debt is bound to reach the TRILLION DOLLARS amount by the year 2064. This would happen, even should Lebanon incur no other losses during the period 2019 to the year 2064, bar the seven per cent interest charges, and in spite of the $195 billion dollars annual payments that would have been made from 2026 to 2064

In the above Statement, the history of a 25 years old conundrum (from 1993 to 2018), and a 45 years envisaged future one, that may lead, God forbids, to the ruin of LEBANON, is described, and, what is more, precisely evaluated. The reader can see that Lebanon's Public Debt will inevitably exceed the trillion dollars size in 2064, even though Lebanon would have paid $195 billion dollars from 2026 to 2064.

This is why, we believe that restructuring the public debt from 7% down to 1.5% with retro-active effect from 1/1/2015, is the ONLY VIABLE ALTERNATIVE THAT WE CAN CONTEMPLATE, to address the entire issue.

CONCLUSIONS

May I mention, at this juncture that the individuals who raised hue and cry at the mention of “restructuration of the public debt”, have not only remained prudently anonymous, but they have also been unable, to this day, to propose any logical alternative solution to the conundrum facing Lebanon. Any reader of this statement would be inclined to agree with me that something not very clear is taking place, particularly when one considers that the bondholders are, most probably, citizens of the country that they wish to bankrupt.

When a debtor claims that he is willing to pay, but needs to have his debt restructured, the least that debtor could ask for and should be naturally granted, is the ability to talk with all his identified creditors. This has not been the case, so far. Why? But, in addition, the debtors are not allowed to argue their case, neither with their leaders, nor with their creditors. And if someone should stand up and tell me: but the citizens are represented by the parliamentary commission on finance,I would reply: "Have these citizens been officially informed of their rights to meet with that commission I am a citizen myself, but no one told me that I was entitled to meet with them. Should it be the case, I would rush to do so, because there remain a number of other questions that I would seek to ask.

My closing question, readers, is simple:

“DO WE ALLOW THE YET “ANONYMOUS” LEBANESE HOLDERS OF THE PUBLIC DEBT BONDS TO BANKRUPT THEIR OWN COUNTRY, OR DO THE CITIZENS GET ALLOWED TO MEET THEM IN ORDER TO CONVINCE THEM, THAT RESTRUCTURATION is the only way out for Lebanon, and for its six million citizens, who can do nothing but cry and tear their hair out, at the thought of the miserable future that they face?