Not much southern comfort

A year and a half ago, Lebanon’s contractors were locked in a rough-and-tumble wrestling match with the government over roughly $400 million worth of unpaid bills for public sector construction projects, some of which extended back three years. When the government finally agreed to pay up, it did so with three-year treasury bills that carried a 5.6% interest rate. In order to pay back their creditors, contractors were forced to sell the T-bills to banks at discount rates – the rate that banks charge to buy T-bills before maturity – that ranged from 8% to 10%. Couple that with the interest lost while they waited for their money and some contractors were lucky to walk away with just three-quarters of the original money owed to them. The situation is a bit better now – a bit. There remains about $50 million in unpaid bills, says Hayyan Haidar, counselor to the