The Lebanese economy is in severe need of successful interventions to help reconstruct the banking system and revive confidence in the economic institutions, ImpACT International and IRDG said in a joint oral statement at the 45th session of the United Nations Human Rights Council (UNHRC). There is a serious lack of public trust in economic institutions amidst Lebanon’s financial crisis.
Depositors are not able to obtain their money within a short, specified period of time, and cannot even be compensated if any harm is incurred
"During Lebanon’s current financial and bank crisis, small and medium-sized businesses are in particular need of protection,” said the two organisations. “Depositors are not able to obtain their money within a short, specified period of time, and cannot even be compensated if any harm is incurred.”
The statement addressed the inability of depositors to withdraw their money when needed, rendering them unable to pay their monthly bills and triggering a lack of liquidity, commercial traffic and economic stagnation.
“The behaviour of Lebanon banks undermined the confidence of depositors and other clients by tying up funds and restricting transactions," the organisations added.
ImpACT International and IRDG stressed that the government must particularly focus on implementing bank reforms and positive regulations aimed at protecting and aiding small and medium-sized businesses. The organisations called for increasing guarantees on bank deposits to allow these businesses to gain a better share of deposit into their accounts, thus allowing them to increase investments and protect their workers’ pay rights.
The two organisations urged the Human Rights Council and its member states to pressure the Lebanese government to end its austerity policies, thus creating liquidity for Lebanese banks, adding that existing high interest rates also should be re-evaluated.
They also urged the restructuring of the banking system, including reducing the large number of banks and incentivizing specialized banks that are dedicated to creating a productive economy.