The case for full dollarization once and for all

In November 2023, four years after the start of Lebanon’s severe financial crisis, Harvard Growth Lab suggested that Lebanon consider adopting full dollarization among other economic and financial restructuring and reforms. In practice, a full dollarization consists of renouncing both the Lebanese central bank, Banque du Liban, and its monetary policy, and replacing the local currency—Lebanese pounds—with a foreign one, namely the US dollar. Such a suggestion has always been criticized and rejected by the public, the media, activists and non-experts who argue that dollarization would undermine the sovereignty of the state.  Indeed, it was not the first time that this subject was raised. Since 2019, I have proposed shutting down the central bank and burying the Lebanese pound. In June 2020, I coordinated with Member of Parliament Paula Yaacoubian to propose a law (N° 697/2020) urging the Lebanese parliament to vote in favor of a currency board system, that