Financial Crime and Cash Economy - Rethinking Lebanon strikes again

"Ca va sans dire, mais ca va mieux en le disant" (it goes without saying, but it goes better saying it) said Charles De Gaulle: Lebanon has become a de facto cash economy. With banks holding all our money hostage, with banks doing all kinds of tricks to take money when you deposit, transfer, or withdraw (lately, they are charging 70 USD to retrieve money coming from abroad). Money transfer systems (such as OMT/Western Union or Wish or BOB Finance) have become the way people handle money as opposed to banks.
A conference about "Financial Crime and Cash Economy" is being co-organized by Holy Spirit University of Kaslik and Rethinking Lebanon (helmed by the intrepid Jihad El Hokayem) in collaboration with the Lebanese Army. This conference will convene experts to address the rise in financial crimes resulting from Lebanon's shift to a cash economy. Of course, the idea is that with very few choices the Lebanese have, what is the best way to stop money laundering and such other crimes now that cash is the most used means in Lebanon.
The conference will mainly focus areas are identifying new illicit cash flow trends, evaluating policies to boost cash transparency, improving cross-sector information sharing, and building awareness. It is to be noted that as per the World Bank the severe economic and financial crisis Lebanon is enduring is likely to rank in the top 3, most severe crises episodes globally since the mid-nineteenth century.
Experts will also examine solutions to reduce overreliance on cash, including restoring trust in banks, expanding digital payments (funny story, last time I was at my bank, I signed papers for the renewal of my card but - the person handling my application did not give me the said card, nor did I ask for it - why? Because the card is worthless at this point since no money comes into it!), implementing focused cash regulations, and incentivizing formal financial services. The goal is to advance a coordinated response that combats financial crimes while considering economic and inclusion impacts as Lebanon transitions away from a cash-based system.
The conference will be held at Jean Paul II amphitheater, USEK campus - Jounieh, on March 26, 2024 from 9:30 AM until 2:30 PM. The maximum capacity of the amphitheater is 1350 attendees in person. However, you can tune in to a live stream on zoom or dive into an immersive metaverse experience, the conference will be also covered by various media outlets and channels.

In Lebanon: A redefinition of what is middle class is due.

Fa - artwork by Tarek Chemaly

Middle class, a term frequently used but seldom understood here in Lebanon. I bet no Lebanese has a solid understanding of social stratification and its difficult nuances. Has anyone heard of Max Weber? I think not. And even those who have heard of Karl Marx probably did so through some reference by Ziad Rahbani. If I say this is it because, without any doubt, what is "middle class" in Lebanon is surely eroding.

The current economic crisis has brought many to change their spending habits, their ability to show off which is primordial to the Lebanese m'as-tu-vu system (everything is based on keeping up with the Joneses), the penchant for bragging (or as a friend put it, "I knew that restaurant was dead when my aunt stopped doing her children's birthdays in it"), the hype system (which makes a shop like Zara become high end or an eatery like Paul which is basically something you find in the French metro a proper exclusive restaurant), and the lowest-common-denominator comparisons (Marmaris in Turkey becomes a coveted destination). 

But now all this is gone. The new system is still being built. Surely political powers still hold sway on the populace, but even that is shifting and morphing. Even Zara itself has climbed the echelons to bypass the middle class at this stage. The proliferation of cash economy and pay on delivery as well as second-hand buying are but signifiers of how symbols of what constitutes middle class is changing.

One of the easiest signals to detect as house helps - many were left to their own devices at embassy doors, others quit outright because they were no longer being properly paid (due to the absence of Dollars in the Lebanese market), and economists who say that foreign workers are siphoning Dollars from the economy to their home countries seem unaware that - class restrictions withstanding - local women (even if unemployed and in dire need of money) would not accept to work in houses to replace helps coming from Ethiopia or other nations.

I recently told the story of how at a fancy store, many people would come in ask about the maamoul prices that tripled since last year (maamoul being the traditional Easter cookie) and leave without buying. Without having solid statistics, I can however tell you the cases of many supposedly middle class houses who bypassed maamoul buying this year under different guises - their mother has diabetes, "aslan ma 7ada 3am yeje" (to begin with no one is visiting), am on a diet - but truth be told, it all goes back to: The prices are exorbitant and better spent elsewhere.

A doctor I know, fresh from visiting her husband who works in an Arab country, told me she brought an extra bag filled with powdered milk and other such items for her kids considering how expensive - if at all found - they have become in the Lebanese market. 

Tailors and cobblers are making excellent business, suddenly everyone is waking up to having things that need repairing, because it is much cheaper than buying new items since the throwaway culture had taken hold of Lebanon. And again, what was something that took no time (changing a zipper replacing buttons) is now taking days at repair shops.

I am not saying all this with a negative mindset, on the contrary, a change had to happen and sadly it came about due to the wrong reasons. Still, a redefinition of what is middle class is due in Lebanon.

Lollar, Bira, and Lebanon's cashless economy

Bira logo design by Patrick Chemali
Concept coined by Dan Azzi

First was the Lollar. Now the Bira. If it seems am talking gibberish, then welcome to Lebanon.

Both terms coined by Dan Azzi, both logos by Patrick Chemali (disclosure: Both Dan and Patrick are friends).

Ever since, a year ago, Lebanese banks closed for two weeks when the political tumult started (known as thawra), and saw people's trust in them nosedive, Lebanon went steadily into a cash economy as people mostly tried to avoid having their money in banks and exchanged everything with cold hard cash. Throughout this year, I only used my bank card (which is in USD) only once. Pay on delivery stores proliferated everywhere. Once I was at a fancy store and picked a steeply discounted jacket, when I tried to pay for it, the system repeatedly declined my card. I told the assistant something was wrong as the card had a lot of money in it. She shrugged and said "I know, it is our bank machine going insane!". Another design store had a sign that said, "please pay cash or in Lebanese cards, our machine is declining Dollar cards".

Sweden is on its way to becoming a cashless economy, and yesterday, the Banque du Liban thought Elias the grocer and Ali the barber and Fatima who sells Islamically compliant scarves and Carole who sells fake perfumes are all equipped with credit/debit card machines. Basically, and understandably, BDL was unable to get the fuel, medicine and bread un-subsidized, so trying to stretch its meager reserves as much as it can, it capped the Lebanese cash withdrawal from banks and suggested using cards would be just as fine, thank you very much. Elias, Ali, Fatima and Carole beg to differ.

Well, I might be stretching my logic, but it still stands. People have zero faith in banks at this stage, they want to avoid putting their money there. So the idea of cash under the pillow was truly comforting for them. "I Like My Money Right Where I Can See It. Hanging In My Closet," said Carrie Bradshaw in Sex And The City. Many Lebanese would agree. Though the money is not hanging, but rather hidden in the green jacket's upper pocket or in the second shoe box to the left.