Our economy is seriously underperforming. While this isn’t a surprise, it still bothers me every single day. I love our banks, but they are only part of the equation for real economic success. We need functioning capital markets, and we needed them yesterday. I love our central bank, but it simply cannot continue being the country’s only economic agent. We need a robust and well-planned fiscal policy, and we needed it last year.
The Beirut Stock Exchange is a joke. Companies with growth ambitions in Lebanon have debt as a local financing option. That’s basically it. This is absurd. We Lebanese have trading in our blood. Our financial markets – indeed, our entire economy, including capital markets – should be at the service of traders pushing our economy forward. Instead, we don’t even have laws that allow private equity and venture capital funds to be properly structured. While private sector initiative led to a draft PE/VC law, there’s a very real fear our politicians will ignore it, not understand it or both. Our national economic strategy was written for an era that ended 100 years ago. It’s pathetic.
While you might expect parliament or cabinet to develop and implement fiscal policies that can help the economy grow, ours are silent on that front. Our central bank is doing all of the heavy lifting, even as its actions are increasingly far from its mandate. Central banks do monetary policy. It’s a medium- to long-term game. Fiscal policy – which can have immediate effect – is meant to be hammered out by politicians (ideally with some input from the people they were elected to represent). Today, through stimulus packages, long-term loans, investment subsidies and debt restructuring guidance, our central bank is supporting the real estate, film and ICT entrepreneurship industries, to name but three. This is not only wildly abnormal, but also arguably unsustainable. We can only ask and expect so much from the central bank.
Last month’s municipal elections proved two things: elections can be held without the country imploding and people are ready for change. With parliamentary elections scheduled for next year, the opportunity to move this country in the right direction is more real than it has been in over 25 years. This is an opportunity that the unqualified will no doubt try to exploit. Our chance to influence the outcome begins now. If we begin demanding candidates who have real economic vision, we just might get them.