Beirut-Not too many people in Lebanon envy Central Bank Governor Riad Salameh today. He is one of the figures whose names are circulated for presidency, if parties agree on having a “consensual” candidate. Yet his stances against the so-called Hezbollah in the current crisis will likely make it impossible for him to reach that position.
The implementation of U.S. sanctions against Hezbollah would bring about the collapse of the Lebanese financial system because Lebanon, like many other states, is linked to the world financial market in which the U.S. has a major influence.
Consequently, putting Lebanon on Washington’s blacklists would take Lebanon’s already shaky financial system towards the unknown.
That’s why Salameh chose to negotiate with the two sides. He traveled several times to the U.S. and held many internal meetings with the aim of reaching solutions that satisfy all sides. His solutions are based on two factors; first the U.S. does not want to destroy Lebanon and second the party cannot assume responsibility for the damage. Hence, the two sides should accept that they can’t achieve all their objectives on this issue.
Politically, some claim that the recent crisis upsets Salameh’s presidential chances, while others have a contradictory viewpoint because the Central Bank governor was able to amend the U.S. demands. If he also manages to obtain Hezbollah’s consensus on his proposals, then he will successfully appease the two sides.
Salameh took over his post in 1993 when slain former Prime Minister Rafik Hariri asked him to become Central Bank governor for the first time. Salameh was able to win the trust of all politicians who ruled the country despite the dramatic political changes that had taken place back then.
Salameh stayed in his post during the tenure of former President Emile Lahoud, one of Hariri’s fiercest political enemies. After that, his term was renewed three consecutive times.
A Lebanese banker praised Salameh, saying anyone else would not have been able to survive as the head of the Central Bank for that long. One of his top traits is his ability to gain the trust of the Lebanese.
Lebanon has not been financially affected despite the huge political repercussions of the region’s turmoil, said the banker.
“Lebanese people did not feel the depth of the world financial crisis that erupted in 2008 due to the wise monetary policies of the Central Bank,” he told Asharq Al-Awsat.
“Salameh chose to remain neutral and avoid playing the political game to protect the financial and monetary stability,” the banker said.
“Had he decided to play that game, the Lebanese situation would have been much worse,” he said, stressing that Salameh refused to be dragged into political disputes despite all attempts to lure him into the game.
“Lebanon’s situation is bad at all levels and the country is disintegrated but it has the only remaining hope of monetary stability,” he stated.
Salameh has been controlling the monetary situation with an iron-fist and the country’s lira has not witnessed any drop in it its value since 1993. When he first took up his post, there were 300 million dollars of hard currency. He was then able to increase the amount to around 37 billion dollars, said Byblos Bank top economist Nassib Ghobril.
“When Salameh was appointed in 1993, the Lebanese banking sector required new laws and regulations that would control the financial and monetary situations at a time of inflation,” said Ghobril.
“The first decision he took, and is still abiding to, was to keep the lira stable,” he told Asharq Al-Awsat.
Stability does not have any negative effects. On the contrary, it is aimed at gaining confidence in the Central Bank and the Lebanese banking sector in general, which was able to cope with 15 years of civil war, 22 years of Israeli occupation and dozens of political, security and economic shocks.
The word confidence might be at the top of the governor’s wordlist. He works on garnering international trust in Lebanon’s financial situation and local trust in the banking sector.
Ghobril said that Salameh has kept his position this long over “the success of the Central Bank and the confidence it has gained.”
Given the achievements he has made, Salameh has received several awards over the past years. He was named the Best Central Bank Governor in the Middle East and North Africa and was also rewarded in 2003 and 2006 for being the Best Central Bank Governor in the World.