Ziad Hayek is a visionary leader in business and finance who has mastered the new language of wisdom, love and courage while advancing positive initiatives in responsible leadership and corporate social responsibility.
Perfect stability of the business environment is not possible and thus the business leader’s challenge is to anticipate change.
Lebanon’s economy is now in a situation of a sudden stop. Sudden stops are usually followed by a sharp decrease in output, private spending and credit to the private sector, and real exchange rate depreciation.
The import/export imbalance is creating current account deficits of around 25% of GDP. Lebanon macroeconomic fundamentals are the worst among previous crises-stricken countries. It is the third most indebted country in the world, after Japan and Greece, with a Debt-to-Gross Domestic Product (GDP) ratio in 2018 of 150% and currently at 156% according to the International Monetary Fund and a gross public debt of US$ 87 billion. The banking system is completely paralyzed. The banks are no longer able to serve their clients as they relied mostly on the deposits of wealthy Lebanese and especially the diaspora, but this has also stopped. Instead of helping the country get out of this financial mess, the banks are stuck right in the middle of this crisis instead of offering solutions. The consequences of these crises, for Lebanon and all stakeholders involved may be devastating unless urgent policy action decisions are taken, and structural reforms are implemented.
To stop this downfall, the economy will need an immediate injection of at least $25 billion in fresh capital. It is critical that Lebanon begins a process of significant fiscal and monetary adjustments and structural reforms to contain public debt and raise economic growth… more