Lebanon is on the verge of economic collapse unless an “immediate solution” can be found to end days of nationwide protests that have paralyzed the country, Central Bank Governor Riad Salame told CNN in an exclusive interview Monday.
Lebanon’s banks have been closed since the demonstrations, sparked by a series of proposed austerity measures including a tax on WhatsApp calls, began nearly two weeks ago.
“It’s a matter of days, because the cost is heavy on the country,” said Salame, who called for an immediate solution to stave off the crisis while warning of longer-term damage to investor confidence.
Protesters are demanding the resignation of the national unity government of Prime Minister Saad Hariri, forcing road closures throughout the country and filling the streets of its urban centers. The demonstrations are the largest in Lebanon in almost 15 years.
Salame said Hariri “wanted to resign” but has feared leaving a “vacancy” in government. He added that the Prime Minister aimed to achieve political consensus on a new or reshuffled government in order to “satisfy the people of Lebanon, to regain a certain trust.”
“For the time being, there is no progress in this issue,” said Salame.
Last Monday, Hariri released an ambitious 17-point action plan to tackle the country’s economic crisis, but the move failed to appease protesters who continued to pour into the streets in large numbers.
“The more the solution is delayed, the more the cost on the country. Today there is no economic activity in the country,” said Salame. “Imports are getting difficult to channel because the banks are closed, and opening letter of credits is more difficult than it was before.”
The governor, who has held office since 1993, also warned that the country risks defaulting on its ballooning debt. Lebanon has one of the highest debt-to-GDP ratios in the world.
“We have international debts to cover. If we don’t cover (them), we are in a default situation,” said Salame. “And on the other hand, the people, jobs are at threat. Companies that are losing money might run the risk of not being able to pay salaries.”
“The issue today is an issue of a country that is stopped in its activity, and (it) cannot afford that,” Salame added.