“Ponzi scheme” blew up Lebanon’s finances, says UN chief Guterres
Lebanon’s financial collapse was caused by “something akin to a Ponzi scheme,” UN Secretary-General Antonio Guterres said in videotaped comments in a closed-door meeting during his visit. visit to Beirut this week.
Lebanon is in the third year of an economic collapse that began in 2019 when the financial system collapsed under the weight of massive state debt – the result of decades of corruption and mismanagement – and the unsustainable way it was funded.
Critics of the Lebanese authorities have likened the financial system to a Ponzi scheme, depending on new borrowing to pay off existing debt. The central bank denied.
âAs far as I know what happened in Lebanon was that Lebanon was using something similar to a Ponzi schemeâ¦ which means that of course with corruption and other forms of theft. , probably, the financial system collapsed, âMr. Guterres said. said in the video, which was circulated widely on social media.
The crash caused the Lebanese pound to lose more than 90% of its value and people were excluded from their deposits in the crippled banking system.
Mike Azar, an expert on the Lebanese financial system who attended the meeting, confirmed that Mr. Guterres made the remarks during the closed-door meeting between the UN chief and members of Lebanese civil society on Tuesday.
Mr Azar, a former professor of economics at Johns Hopkins University in the United States, said Mr Guterres made the comments in response to a statement he made.
Asked by Reuters about the comments, a UN official said the secretary-general’s views on the financial crisis were “more fully expressed” at a press conference at the end of his visit.
During this press conference, Mr. Guterres declared that the Lebanese leaders must convince the international community to support Lebanon by adopting reforms “concerning the economic, social and political life of the country” and by adopting an “economic recovery plan. credible âtalks for a support program for the International Monetary Fund.
Updated: December 22, 2021, 5:01 PM