The announcement by the Deputy Prime Minister of Lebanon, “Saadah Al-Shami”, that the Lebanese state and its central bank would be bankrupt, raised many questions and speculations, which crossed the borders of Lebanon, especially in Syria, where the Syrians’ money deposited there is no less than 30 billion dollars.
Risk management expert Dr. Maher Singer said in a statement to “Hashtag” that declaring bankruptcy in Lebanon indicates “many risks and at the same time some opportunities for the Syrian economy.”
Regarding Syria’s losses from Lebanon’s declaration of bankruptcy, Singer explained, there are many entanglements between Syrian and Lebanese parties, and the latter will be unable to pay its debts to Syria and will turn to a debt formula, but for a bankrupt country, its scheduling may be reconsidered for many years and part of it may be lost.
can also talk about Syrians’ deposits estimated at more than 30 billion dollars, which will be lost to their owners in one way or another. Some Syrian banks intertwined with Lebanese banks will also be affected, even though they are licensed in Syria.
As for the exchange rate, Singer expected rebounds on it, “although they are controlled by the measures taken by the Central Bank of Syria, and not only the Syrian pound, but all currencies in neighboring countries, because the exchange rate of the currencies of neighboring countries is usually taken as an indicative trend for the price of currencies.” According to Singer.
As for the opportunities available to Syria; Tax rates will rise in Lebanon, and this may push the Lebanese to invest in Syria. The demand for cheap Syrian goods will also increase, provided that there is control and no smuggling is allowed and basic materials are controlled. We will also witness a reverse movement of capital into Syria unless Lebanon restricts this matter, Singer adds.
Singer noted that international laws usually guarantee the rights of states in cases of bankruptcy, but the issue of rescheduling and restructuring may take a long time, “but we must benefit from the lesson of Lebanon’s bankruptcy in building indicators of state risks that benefit the Syrian state and Syrian investors and exporters, for example Jordan suffers from huge indebtedness, as well as Egypt, and therefore the risks of their bankruptcy are high.”
Singer distinguished between countries declaring their inability to pay their debts, and their bankruptcy. In the event of bankruptcy, the state becomes unable to pay the salaries of its employees in the public sector, in addition to the inability to pay its foreign debts, and pointed out that what is happening in Lebanon is not clear until now, The word bankruptcy may be figurative or in the absolute sense.
Singer added that in managing risks, Syria should have an early warning system consisting of indicators related to countries’ risks indicating the countries’ ability to pay their debts or reach bankruptcy, and said: “We in Syria lack a risk management body that has these indicators.”
Singer concluded that there are many countries that have declared bankruptcy before and have resurrected, “bankruptcy does not mean the end.”
Bassem Mohammed
To receive notification of the most important news and urgent matters, join our telegram channel through the link