Banks across Lebanon have been shuttered now for a seventh consecutive day, with the country’s banking association saying banks would remain closed Friday over "safety concerns" as massive anti-corruption protests have brought multiple cities to a standstill, which began a week ago.
Reuters reports that banking operations have been "limited to paying out customer and employee salaries via ATMs" in a situation which has also hit war-torn Syria, given many Syrians rely on the neighboring Lebanese banking system to hold dollars and savings following the collapse of Syria's currency.
For the first time addressing the protests — dubbed the 'WhatsApp Revolution' because it was initially triggered by a government a plan to boost state revenues with a daily tax rate on calls made via voice over internet protocol (VoIP), utilized by applications such as Facebook-owned WhatsApp — Lebanon’s President Michel Aoun in a public speech touted an economic reform package proposed by the prime minister as a “first step” toward staving off economic collapse.
Aoun acknowledged state corruption has “eaten us to the bone” and assured the crowds, “I am ready to meet your representatives who carry your concerns, to listen to your specific demands.”
He also hinted at a government reshuffle potentially in the works, saying that there was “a need to review the current government.”
But he also lambasted the fact that the some one million or more strong protests (up to a quarter of Lebanon's entire population), has paralyzed transportation in the major cities such as Beirut, including blocking access at times to the main international airport.
The demonstrators established roadblocks during the early days of the crisis, amid severe clashes with police. Schools have also remained shut alongside the banks and some public institutions.
Bernie Sanders issued rare Washington support for the mass protests in a tweet earlier this week, vowing to "fight corruption, repression, inequality and austerity."
The Arab Spring rose up to fight corruption, repression, inequality and austerity. The Lebanon and Iraq protests show this spirit is still very much alive. If we want a progressive future, we need to build up a global movement of and for working people. pic.twitter.com/KTheQouKK8— Bernie Sanders (@SenSanders) October 22, 2019
“We will discuss what we can do together to achieve your objectives without causing collapse and chaos, open a constructive dialogue that can lead to a constructive result, and define options that will lead to the best results,” President Aoun said, urging a removal of the roadblocks.
He also vowed that politicians which had robbed public coffers would be investigated and held to account, however, a number of protest leaders interviewed by international press weren't buying it.
Lebanon protests: key moments from a week of unrest pic.twitter.com/5qQxy1i4CV— The Guardian (@guardian) October 24, 2019
There's growing concern of a potential run on the banks the moment they finally do open, which is still as yet uncertain.
As CNBC summarizes:
No one seems to know when the country’s lenders will reopen, triggering warnings of a run on the banks when they eventually do.
“Indeed we are afraid of a panic mode once they open,” Fouad Zmokhol, president of the Worldwide Association of Lebanese Businesspeople, told CNBC from Beirut.
“The cash of the banks are in reserve at the Central Bank or are in Treasury bills. The cash of the banks are not in the bank deposits, so no, they don’t have enough cash for everyone that would come and ask for any cash of transfer. So this is the main problem, we have to reduce the panic.”
The country’s dollar reserves, crucial for imports, are what's in trouble and not necessarily the Lebanese pound. President Aoun's speech was also aimed at restoring faith in the system, and calming the widespread panic over a potential looming economic collapse.
According to Reuters:
Government measures announced this week that include halving minister salaries, taxing banks and overhauling the wasteful electricity sector have failed to defuse popular anger and have yet to prod Western donors to move forward on the pledged financing.
The country has lately suffered a severe slowdown in capital flows, and difficulty of importers securing dollars at the pegged exchange rate, as well as periodic collapse of public services - due to frequent strikes, work stoppages, and lack of public funding.