tag:blogger.com,1999:blog-807039862321845767.post7670073296796908284..comments2023-11-03T05:44:53.557-04:00Comments on Rational republic: Sovereign Debt in Lebanon: Beyond the Tipping Point.Anonymoushttp://www.blogger.com/profile/00826733025674909285noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-807039862321845767.post-34507659157626530512012-06-03T16:48:02.426-04:002012-06-03T16:48:02.426-04:00Joseph,
I am sure that many of the wealthy A...Joseph,<br /> I am sure that many of the wealthy Arab states and probably some of the Western states will chip in. My point is that it would be better to arrange for a debt swap/debt reduction instead of waiting until it becomes an imperative. Actually, the sooner the debt is rationalized then the greater is the total of the funds available for domestic investment. I look at it as a win-win.Anonymoushttps://www.blogger.com/profile/00826733025674909285noreply@blogger.comtag:blogger.com,1999:blog-807039862321845767.post-9082683749089856372012-06-03T15:35:43.213-04:002012-06-03T15:35:43.213-04:00What are the chances of wealthy GCC states bailing...What are the chances of wealthy GCC states bailing out Lebanon?<br /><br />Haven't states like Saudi and Kuwait sent through money in past?<br /><br />I could be wrong, but I remember reading that during the 2006 war, Saudi sent through $1 bil and Kuwait $500 miljosephnoreply@blogger.comtag:blogger.com,1999:blog-807039862321845767.post-29811242740082121222012-06-02T19:37:01.378-04:002012-06-02T19:37:01.378-04:00Excellent observation Joseph. One point that I hav...Excellent observation Joseph. One point that I have been stressing is that Lebanon does not have the option of adopting an austerity budget since it will be difficult to have a more austere one. A few of our ministries have an annual budget of only about $10 million. That is not enough to print a brochure once the rent, salaries, ... are paid.<br />I am of the opinion that the effect on Lebanon, in case a default takes place , will not be very significant. But we do not need a default. Lebanon can negotiate with all the banks and other debt holders for a major reduction of the debt a al Greece.<br />BTW, Domestic debt, I.e. that denominated in Lebanese currency is only 54% of the net overall sovereign debt in Lebanon. Obviously it would be a slightly larger percentage if the Gross debt is to be used as a base.Ghassan Karamhttps://www.blogger.com/profile/15562232018685403280noreply@blogger.comtag:blogger.com,1999:blog-807039862321845767.post-61973866242883291922012-06-02T10:42:03.150-04:002012-06-02T10:42:03.150-04:00Good post.
I always wondered why people never dis...Good post.<br /><br />I always wondered why people never discuss the debt yet whine about no electricity and water.<br /><br />A couple of things<br /><br />1) As most debt is held by Lebanese banks, would they simply write off the loans if the Lebanese state could not pay the debt back?<br /><br />2) Say a default did occur, would it really affect people on the ground? Greece and the rest of the Euro countries have a social security net in place (pensions, hospital cover etc) whereas Lebanon does not really have the same social security net.josephnoreply@blogger.comtag:blogger.com,1999:blog-807039862321845767.post-45205985955810427612012-06-01T07:27:37.830-04:002012-06-01T07:27:37.830-04:00LEBANONSPRING,
You are absolutely ri...LEBANONSPRING,<br /> You are absolutely right about the size. There isn't enough Lebanese paper to entice speculators to make a move. In this case this smallness is an advantage. But we still need to get our house into a decent financial shape otherwise we will be in trouble.<br /> Lebanon can take advantage of its political importance to various sides and negotiate a reduction in its debt similar to the negotiations that reduced Greek debt. Lebanon's sovereign debt needs to be cut in half.Anonymoushttps://www.blogger.com/profile/00826733025674909285noreply@blogger.comtag:blogger.com,1999:blog-807039862321845767.post-50647717281771022262012-06-01T05:00:39.541-04:002012-06-01T05:00:39.541-04:00Good post with good point there. But the main thin...Good post with good point there. But the main thing why Lebanon is ‘allowed’ to run such a high debt ratio is because no one cares. The risk-impact of Lebanon going under is so negligible related to the European countries you listed. The size of our GDP is not something.<br /><br />As for how we are going to pay for it, may be with the revenues from the potential oil and gas! Obviously, when agree on the bloody process and laws, and guarantee the cut of the corrupted politicians.Anonymousnoreply@blogger.com