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“Historically, Lebanon prospered as a result of inflows of people and funds – people who came to take refuge in Lebanon and also funds. If we look at the post World War 2 period when modern Lebanon became independent and also at previous periods that Lebanon went through – and I mean over the past 100 or 200 years – one thing that was common to all these eras is its liberal economic system that was adopted by all who lived on this land. The constant was the liberal economic system.”____ Joe Issa El Khoury

Sami J. Karam speaks with Joe Issa El Khoury, a Beirut-based financier, about the tragic events that have unfolded in Lebanon since 2019. A sharp fall in the currency, a banking freeze, a political crisis, hyperinflation, and widespread street protests made 2019 a difficult year. But these events were then compounded by the Covid-19 pandemic and the explosion in the port of Beirut in 2020.

Issa El Khoury explains the sequence of events that led to the present, and offers a possible way forward.

Topics include:

0:00 Introduction of Joe Issa El Khoury
2:25 What is it like right now on the ground in Beirut?
8:33 Why did Lebanon have a golden period in 1945-75; why was it later so prone to crisis?
17:40 The Rafik Hariri era and the return of growth 1990-2005
20:00 What explains the weakness of the Lebanese state: geography and demographics
26:30 Lebanon’s diversity as a source of wealth; Example of Lebanese cuisine
30:40 Crossing the line from a laissez-faire economy to a crony economy
35:05 The real estate boom of 2007-11
36:55 The impact of the Syrian civil war
39:10 Crowding out the private sector
44:10 The proximate factors that led to the meltdown
46:15 The current condition of the banking sector; Role of the Central Bank
51:00 Will depositors suffer a haircut? The Lazard and other plans
54:45 Talk of privatization of state assets
59:45 Political patronage in the public sector
1:01:50 “All roads lead to Washington DC and the acronym IMF”
1:05:20 Political reform and the role of the diaspora