BEIRUT: To find consensus in Lebanon, look no further than the gold. Despite persistent paralyzing political and popular quarreling, when it comes to Lebanon’s gold reserves, valued at around $17 billion as of Aug. 15, Lebanese economists and policymakers agree they best remain untouched.
“The presence of gold is important given the current political system and the global financial and debt crises, so in my view, it is not a good idea to sell any of Lebanon’s gold,” said Dr. Simon Neaime, chair of the economics department at the American University of Beirut in an interview with the Daily Star.
In addition to historic capital inflows and record-low interest rates on sovereign debt, shaken global capital markets have been handing Lebanon a consistent rise in the value of its gold reserves, more than doubling in the past three years and quadrupling since August 2005.
Yet with a $52 billion public debt eating up half of government revenues every year and given favorable gold prices, a liquidation of the golden egg could relieve Lebanon of 31 percent of its debt, and release an estimated $1.3 billion annually in public funds for general spending.
Alternatively, Lebanon could theoretically channel some or all of its gold returns into badly needed infrastructure which in turn promotes economic growth. After all, although Lebanon’s gold per capita holdings are second only to Switzerland, its power, information technology, health care, and water infrastructure lag several poverty-stricken countries...
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