BDL’s foreign asset plunge, power plants fiasco, airport safety issues: Everything you need to know to start your Friday

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Only 10 percent of Lebanon’s International Monetary Fund (IMF) Special Drawing Rights (SDRs) remain, Banque du Liban (BDL) acting governor Wissam Mansouri said yesterday, adding that the central bank’s liquid foreign assets amount to $8.57 billion. Reuters estimated that the reserves were at $7.3 billion — excluding $1.27 billion in liquid external liabilities from the official figure — after having dropped from $30 billion in 2019. Foreign asset figures, though stable for months, dropped by $600 million in the second half of the past month, according to a BDL bi-monthly balance sheet released on July 31. The BDL statement also shares, for the first time, the SDRs’ current value of $125 million after their repeated use to finance government expenses, notably wheat imports and other subsidized goods. In April, allegedly leaked Finance Ministry figures claimed only a third of the $1.139 billion in SDRs remained after spending chiefly on fuel and subsidized goods imports, along with loan repayments.

An agreement to pay $7 million to the operator of Lebanon’s two largest power plants was reached yesterday, restarting the Deir Ammar and Zahrani plants a day after Primesouth Lebanon interrupted its services to demand unpaid dues. Caretaker Prime Minister Najib Mikati told L’Orient Today that the payment would be financed through Lebanon’s IMF Special Drawing Rights. Local media claimed that the government would also make monthly payments to cover the remaining dues, which one Electricité du Liban (EDL) source estimated at over $100 million. The South Lebanon Water Establishment yesterday advised citizens to ration water amid an interruption to the operations of main stations, wells and distribution centers caused by the power stations’ shutdown. Deir Ammar and Zahrani have previously been forced to shut down due to fuel shortages, while electricity issues have repeatedly interrupted public services, including running water. State electricity production has increased in the past several months, but still does not meet Lebanon’s demand, forcing reliance on costly private generator subscriptions and solar panels.

An audit report urged immediate action to address safety issues within Beirut’s international airport, including a severe shortage of air traffic control staff. The European Union Aviation Safety Agency and International Civil Aviation Organization claimed that the staff shortage could cause “critical repercussions for aviation in Lebanon.” Air traffic controllers’ recruitment has been blocked for years due to political tensions over sectarian quotas. In July, Caretaker Transport Minister Ali Hamieh announced a series of decongestion measures for the airport, which was expected to receive almost three million additional passengers over its yearly capacity of six million.

The government released LL5 trillion to finance the first “three to four months” of the school year, including teachers’ salaries and dollarized incentive payments, caretaker Education Minister Abbas Halabi announced. Halabi estimated the total amount required to be $150 million. This year’s baccalaureate examinations included a reduced curriculum after a monthslong strike by public school teachers demanding improved salaries. Prior to the strike, public schools said they were understaffed and undersupplied at the start of the school year last September.

The legislative Parliament session scheduled for yesterday was indefinitely postponed after it failed to reach quorum amid a boycott by the Lebanese Forces (LF), the Free Patriotic Movement (FPM) and other parties citing the ongoing presidential vacuum. Only 53 MPs were in attendance, while boycotters contested Parliament’s right to convene for sessions not dedicated to electing a president. Similar boycotts have prevented previous sessions, though Parliament still passed a law extending municipal council terms — despite an unsuccessful appeal from boycotting parties. Deputies were scheduled to examine, among other items, a capital control law, which has repeatedly been demanded since the onset of the economic crisis in 2019 and the illegal restrictions placed by commercial banks on depositors. Dozens of demonstrators participated in a protest outside Parliament planned by the Cry of the Depositors collective, which has criticized previous drafts of the capital control law. Caretaker Prime Minister Najib Mikati called for Parliament to resume its legislative functions to examine laws related to “the recovery plan and bank restructuring,” which he considered of the greatest urgency and essential “to achieve economic stability.”

The Foreign Ministry announced it would refuse entry to non-Lebanese people sent back to Lebanon after irregular migration attempts “regardless of their boat’s starting point.” The ministry stressed “Lebanon’s commitment to receiving migrants who hold Lebanese identity papers.” The statement comes after Cyprus repatriated 109 migrants who had reached its shores through irregular means. In a statement published on Aug. 11, the Lebanese Center for Human Rights (CLDH) and other Human Rights NGOs said that among the 109 individuals forcibly returned from Cyprus, “at least 73 were subsequently deported to Syria and handed over to the Syrian regime.” In September 2022, United Nations Refugee Agency (UNHCR) spokesperson Dalal Harb told L’Orient Today that “Syrians comprise the vast majority of people undertaking irregular boat journeys” from Lebanon, from which departures had more than doubled for a second year in a row.

In case you missed it, here’s our must-read story from yesterday: “Hezbollah weapons: What exactly does the Taif Agreement say?”

Compiled by Abbas Mahfouz