Bank robberies with toy guns: the latest chapter of the crisis in Lebanon

First modification: 09/19/2022 – 19:07

Abdul-Rahman Zakariya and Mohammed Rustom have been in detention since Wednesday. Authorities accuse them of breaking into a bank branch and helping a citizen take her withheld savings.

Sali Hafez, who is fleeing justice today, used a toy gun to demand $13,000 from his savings account. In a video of her, she argued that she wanted to use her own resources to pay for her sister’s cancer treatment.

After repeatedly visiting the bank to ask for his money, Hafez was told that he could only receive $200 a month in Lebanese pounds. His case is not isolated: On September 16, depositors, including one armed with a hunting rifle, broke into at least five banks to demand money from him.

The Lebanese Banking Association, citing security concerns, announced the closure of all branches for three days starting this Monday, September 19.

However, it is an almost symbolic closure: the banks, essential for the Lebanese economy, are paralyzed. Savers have had their dollar accounts blocked or told that the funds they can access are now worth a fraction of their original value.

“A Time Bomb”

Lebanon’s is a crisis that dates back decades, but it worsened in 2019, with poverty affecting more than 80% of the population and a population that has seen the Lebanese pound lose around 95% of its value, which reached new lows this Monday, reaching 38,600 pounds per dollar.

Erick Behar-Villegas, professor of economics at the TEC de Monterrey and dean of Economic Sciences at the International University of Berlin, explained that “it was a time bomb (…) People put their dollars in the accounts; then in 2019 the companies left to look for dollars to import. And since the State was indebted to the banks that lent it those dollars from the people, everything collapsed there.”

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“Lebanon exports jewelry, but imports oil, medicines and textiles. While it exports 3 billion dollars, it imports 20 billion dollars, it depends on international markets. In 2019 the shortage of dollars explodes: not having dollars means you cannot import”, he said in an interview with France 24.

Indeed, at the end of 2019, the entities did not have enough liquidity to deliver dollars to all the savers who had deposited in that currency and the system collapsed, which led the banks to impose informal capital control measures, making dollar accounts would be virtually blocked.

With AP, Reuters and EFE