Riad Salameh’s legacy: Lebanon’s financial ruin


On August 2, 2023, Riad Salameh concluded his final six-year term as governor of the Bank of Lebanon, marking the end of a thirty-year tenure.

Amid speculation about his departure, his deputy, Wassim Mansouri, announced that he would temporarily handle monetary policy until a new governor is appointed. However, this transition occurs against the backdrop of Salameh’s tarnished reputation, with many Lebanese viewing him as emblematic of the oligarchy responsible for the country’s financial woes and the loss of their savings, leaving Lebanon in a state of financial ruin.

Once celebrated as the architect of Lebanon’s economic resurgence in the 2000s, shielding the nation from the repercussions of the 2008 global financial crisis, Salameh’s reputation has plummeted drastically. There is little defense for the former governor, given his multiple summonses by European courts in France and Germany on allegations of money laundering, tax evasion, and embezzlement. He also faces similar charges under investigation within Lebanon. Nonetheless, the likelihood of the political elite shielding him from legal consequences remains high, as he has yet to appear in court. Salameh continues to deny any wrongdoing and vows to appeal.

Salameh assumed the role of governor in 1993, under the late Prime Minister Rafic Hariri’s leadership, tasked with rebuilding Beirut and Lebanon after the fifteen-year civil war (1975–1990). As head of Banque du Liban (BDL), he was responsible for attracting foreign investments for reconstruction projects, fostering economic confidence, and fortifying the banking sector. During this time, Lebanon witnessed the influx of billions of dollars, spurring infrastructure development and leading to the growth of sectors like tourism and banking. However, beneath the veneer of this apparent prosperity, Lebanon’s national debt surged, exceeding 100 billion dollars in 2021 (equivalent to 500 percent of its GDP).

This mounting debt triggered a financial crisis in 2019, resulting in record inflation and causing two-thirds of the population to face impoverishment. The same year, Lebanese citizens from all walks of life congregated in Martyr’s Square in downtown Beirut, demanding the removal of the politicians they held accountable for the economic collapse. The hardships faced by the Lebanese population have led some individuals to resort to extreme measures, such as breaking into banks to reclaim their own funds. Despite a man’s symbolic appeal in a bank branch, echoing the 2019 protests, large-scale demonstrations have largely dwindled as people adapt to the evolving economic conditions.

Although certain economic indicators suggest some improvement, the situation remains bleak for most Lebanese citizens. The local currency has plummeted by 98 percent against the dollar. While the summer season might bring profitability with an influx of two million tourists and expatriates to Beirut, nightclubs, bars, restaurants, and tourist sites thriving once more, substantial challenges persist. Wages remain low, commodity prices remain high, and the government remains in a caretaker formation, contributing to the prevailing sense of statelessness.

In the eyes of many Lebanese, Salameh bears responsibility for the country’s economic woes. Yet, the broader political class shares in the failure, overseeing a staggering national debt without taking effective measures to mitigate it. Thus, the rallying cry of “all of them means all of them” remains relevant today. A successful leader should leave their institution and country in a better state than they found it. By this measure, Riad Salameh’s tenure as governor is a failure, albeit one that extends beyond his individual actions.


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