Showing posts with label central bank. Show all posts
Showing posts with label central bank. Show all posts

Saturday, August 28, 2021

Dollar: All is (un)quiet on the Lebanon front

Artwork by Tarek Chemaly


Apparently, the MP Kanaan is suggesting the Dollar parity in the banks has been increased to 10,000 Liras (up from the current 3,900), but the original parity (still used for flour and medicines if I am not mistaken) is still 1507 Liras, now the subsidy on petroleum and diesel products has been lifted and now they are imported at 8,000 Liras to the Dollar, all while the black market now clocks around 20,000 Liras. If you are still not yet confused, let us add the Central Bank's circular 158 which basically marks the Dollar at 12,000 while the "Sayrafa" platform check is at 16,000.

In consumer psychology, when you give the consumer the choice between 4 different types of Jam on the supermarket shelf, the possibility of buying is 50%. When the number of different jams is increased to 16, the buying possibility drops to 25%. I am not saying Lebanese politicians are versed enough in consumer psychology, but they are shrewd enough to know the dictum "divide and conquer" - hey, let's pit the people against the banks (once more) while making people really (really) confused about how much their Dollar is worth and in the process increase the volume of Lebanese Liras to make inflation even worse. This should occupy people for a while and get them off our backs. Neat trick if you ask me.

Still, to misquote Khaled El Haber's song:

نحن في لبنان يخير طمنونا عنكم

We are fine in Lebanon, how have you been?

Saturday, February 6, 2021

Dear Lebanese, believe it or not, this too shall pass.

Artwork by Tarek Chemaly

Well, maybe it is best to begin saying I am not exactly an optimist by nature. If I say so, it is because this post implies a large dose of optimism. But in the last few days, as I was researching a new art series I was working on - OK fine, one of 72 new series am working on - I came across footage from the currency devaluation of 1986 and 1987, which funnily an economist said it was the benchmark of the Dollarization of the Lebanese economy which lead to this current catastrophe we are currently facing with banks.

Long story short to quote "Throw Away Your Television" by Red Hot Chilly Peppers "it's a repeat of a story told, it's a repeat and it's getting old". Save for some fashion changes (and the absence of large barricades courtesy of the next door Ministry of Interior), the footage told me that things have not changed that much. People manifesting, trying to break into exchange offices, beating and smashing the signs of said exchange offices with a lamppost that was snatched from the sidewalk (I can estimate it is Hamra opposite the Red Shoe near what was then the Modca Cafe). Oh and there were military people trying to secure the Central Bank while failing to reason with people (that the salary of these same army people was in itself slashed to pittance tells you about their own confusion).

Sounds familiar? (OK, fine, save for the humongous barricades)

It does, this is 2020 and its "thawra". The anger, the disbelief, the helplessness, but also the bonhomie and that idea that such acts can lead to change (they did not back then, and so far, based on 2020 I see no change either). So where's the optimism bit?

Here's it is. My late father was a government employee whose salary went to three quarters nothing, we were three children who arrived basically back to back (I was the youngest born in 1974), all of us at school, all of us growing up, all of us on hand me downs clothing, all of us with distinct personalities, but also all of us with birthdays (and homemade cakes), and loves (sometimes the same loves, and I would tell you to avoid that), and friends, and teenage years, and films (my first was Jacky Chan's "Sword of Honor" at Sagesse movie theatre).

So why am I telling you this?

Because things went on, and the crisis (crises) was (were) overcome. We managed to survive in very tight times. Sure, I am not preaching some happy-ending story to be made into a film (though it would be nice if Thimotee Chalamet played me), the point is: Even that very bleak time actually tended to end. Was it trying? Ask my parents and their ubiquitous daily Tranxene 5 mg or their chimney-smoking Marlboro (tehrib - smuggled). It would take them forever to kick both habits (OK, to save money they switched to the local Cedars cigarettes at some point though).

You still cannot see the upside of the situation, can you? I do not blame you, the situation is indeed bleak, but revisiting that footage, oddly, reminded me - not of an economy collapsing and savings squandered and day to day hardship - but rather of sunny summers, of cousins living in the upper floor, of outings to the CMC (Club Mountain Cubs) every night, of a blossoming teenage love and of songs played on Pax Radio (as music blasted heavily from the Arabic Jabal Loubnan station from the neighbors' own boombox).

Yes, after a while, what seemed like heavy burdens appropriate for your age tend to ease up, which for me back then centered around a horrible math teacher (no wonder we tend to look at the past with rose-tinted spectacles). So, in several years, the deadly pandemic coupled with an economic crash and a major fear of losing our money stuck in the bank and the wonder if I will be able to secure my mother's medicine, all this will vanish.

And this too shall pass.