‘Now we are ruined’: Lebanese savers try to rebuild
BEIRUT (Reuters) – Like many Lebanese expats, Nadim Srour has donated savings as a nest egg for his return. Now those deposits have collapsed in an economic crisis and an explosion in Beirut has destroyed his home.
“Our lives have turned 180 degrees,” said the 43-year-old who returned from the Gulf with his wife and two sons in September 2019 – a month before the implosion of Lebanon’s banking system and a year before the port explosion destroys part of Beirut.
“Now we are ruined.”
His story is far from unique in a country that racked up a mountain of public debt to rebuild after its 1975-1990 civil war, luring savers with high interest rates, but squandered most of the money. money amid mismanagement and corruption.
The system that some economists have likened to a state Ponzi scheme collapsed last year. Banks have closed the doors to savers like Srour, who now face strict limits on how much they can withdraw, while the real value of those deposits has been reduced as the Lebanese pound has crashed.
“We have money and they won’t give it to us. We are driven like sheep,” said Srour, who left the United Arab Emirates after a slowdown in construction there and has now joined the growing ranks of the unemployed in Lebanon.
In January, a minister set the unemployment rate at over 35%. The economic difficulties have only worsened since then.
To compound the crisis, a huge amount of highly explosive material piled up in dangerous conditions in a warehouse in the port of Beirut exploded on August 4, killing more than 190 people and destroying homes – including the apartment of Srour’s parents where he had gone back to live until he could buy his own house.
A charity has helped Srour find an apartment in Beirut for his family, while his elderly parents and brother, who is unable to work due to childhood injuries suffered during the civil war, have moved to the mountains, a place of refuge in these troubled times in Lebanon.
Srour’s savings were frozen for two years as part of a deal to convert his Lebanese pounds into dollars. But it can only withdraw at an exchange rate of 3,900 to the dollar, well below the market value of the pound which touched 8,000. The pound was previously pegged to the US currency at 1,500.
Banks also limit the amount savers can withdraw. “Now we’re queuing outside the bank and hoping we get a ride,” Srour said.
The restrictions were not formalized as capital controls and the central bank said deposits would not be subject to a “haircut”, or a reduction in the total depositors will receive.
But such comments do little to reassure Srour or his father, Maurice, who had already rebuilt his savings after the currency crisis of the 1980s. Although he has money in the bank, his family can only withdraw the equivalent of $1,000 per month.
“Even if I want to use it to fix my house, the bank won’t give it to me,” Maurice Srour said.
The central bank has asked Lebanese banks to offer interest-free dollar loans to help those carrying out repairs. But borrowing anyway does not bring much to those who do not have a salary.
“I don’t want a loan. I want my money,” said Samir Sfeir, a 75-year-old pensioner injured in the arms by the port explosion.
He can only withdraw $700 a month from the bank and has turned to the generosity of friends to help rebuild his home.
Joe Nader, 48-year-old bank clerk and landlord, repairs a furnished building for his 13 tenants. But he’s struggling to come up with the dollars the vendors are asking for.
He said his family “sold our goods for money: gold, rosaries, paintings” to raise the dollars he needed.
For some, like Srour, it’s a fresh reminder of why they’ve gone to work overseas in the past. And if he had the chance, he would leave Lebanon again: “If we could, we would do it tonight.
Additional reporting by Charlotte Bruneau; Written by Ghaida Ghantous; Editing by Edmund Blair