Protesters in Lebanon reject capital control law that would 'legalise stealing'

Crowd chants 'thief' at MPs driving towards parliament

Lebanese Bank customers carry placards during a protest outside the Lebanese parliament in downtown Beirut, on April 19, 2022. EPA
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Dozens gathered outside Lebanon's parliament on Wednesday to block access to MPs set to discuss a capital control law that protesters described as an attempt to “legalise stealing”.

The protests come two and a half years after banks illegally restricted access to deposits and disrupted a joint committee session, which was expected to finalise the law before transferring it to parliament.

The session did not take place, reported the state-run National News Agency.

"We are ready to follow up on the capital control law after it has been amended, in light of clear data from the government in a way that does not hold depositors responsible," said MP Ibrahim Kanaan, who heads the finance and budget committee, reported NNA.

Lawyer Karim Daher, who heads a commission for the protection of depositors’ rights at the Beirut Bar Association, said that the cancellation of the joint parliamentary committee meeting means that the capital control law is highly unlikely to pass before a parliamentary election on May 15.

Videos shared on social media show a car with black-tinted windows forcing its way through a crowd near parliament. Protesters chanted “thief” and other insults at the MP, thought by protesters to be parliament's vice-president, Elie Ferzli.

Alda Talib, 50, stood outside an entrance to parliament holding a banner that read: “Shame on you members of the Parliament to legislate the capital control law to legalise the stealing of the whole people of Lebanon.”

Ms Talib, a hairdresser who closed her shop at the start of the country’s economic meltdown in 2019, said she was unable to access her life savings. “I have accounts in three separate banks, and get $100 from each [every month]. That’s how I live,” she said.

Banks are allowing those who received money from abroad after November 2019 — when they re-opened after a two-week closure as the value of the Lebanese pound slipped — to access their money.

This kind of double standard is unheard of outside of Lebanon, said Mr Daher.

“The capital control law should be not be voted before determining who is responsible for the crisis, who violated the law among politically exposed persons and the banking sector,” he said.

Mr Daher said a capital control law is necessary, but should be voted on as part of a global restructuring of the banking system, including unifying multiple coexisting exchange rates and lifting banking secrecy.

In its current form, the capital control law “legitimises a kleptocratic political class and allows them to evade any responsibility in this crisis”, he said. “It gives a blank cheque to banks and the political class to continue holding deposits illegally and to do what they want at a discretionary level,” he said.

The crisis has caused the Lebanese pound to lose around 90 per cent of its value and has pushed over three-quarters of the population into poverty.

The World Bank reported Lebanon’s economic crisis as possibly one of the top-three most severe economic collapses worldwide since the 1850s. It said this was “orchestrated by the country’s elite that has long captured the state and lived off its economic rents."

Crisis 'caused by unsustainable policies'

Prime Minister Najib Mikati told the association of banks on Tuesday that the recovery plan “gives priority to preserving people’s rights” and “preserving the banking sector”.

The IMF said in April that the crisis was caused by unsustainable policies, an overvalued exchange right, and an oversized financial sector combined with “severe accountability and transparency problems.”

The IMF agreed at the time with the government on implementing important reforms, including the restructuring of the financial sector, before the disbursement of the equivalent of $3 billion. Local media reported that a version of the recovery plan leaked on Monday that includes, among others, voting on a capital control law.

MP Fouad Makhzoumi, one of the few lawmakers who opposes the capital control law in its current form, said that it does not reflect the recovery plan.

“It’s true that we should have passed it a long time ago, but what are they trying to achieve by passing it on its own now?” he said.

“It’s another attempt by the government to project to the world that there is support for a recovery plan prior to the elections. Those in power are protecting the current system and cannot afford to have any announcement saying it has collapsed."

Updated: April 25, 2022, 6:36 AM