BEIRUT — Lebanese banks have been closed for the last two weeks as the government grapples with mass demonstrations that have paralyzed the country, but an even greater crisis may set in when they reopen Friday.
There are concerns the government may not have enough foreign reserves to defend its flagging currency, service its massive debt and maintain the import of vital goods, particularly if there is a run on the banks.
Lebanon, one of the most heavily indebted countries in the world, already was dealing with a severe fiscal crisis before the protests began, one rooted in years of heavy borrowing and expensive patronage networks run by entrenched political parties.
A proposed tax on the WhatsApp messenger service, coming on the heels of a deeply unpopular austerity package, sent hundreds of thousands of people into the streets starting on Oct. 17 in the largest protests the country has seen in more than a decade.
Banks have remained closed since then, as protesters have packed public squares and blocked major thoroughfares, bringing the country to a halt in hopes of pressuring the government to resign.
The army reopened roads on Wednesday as the protesters stood down in the wake of their first victory, the resignation of Prime Minister Saad Hariri the night before. The Association of Banks in Lebanon said banks would reopen Friday for the first time since the protests began.
The bank closures have taken a toll on ordinary Lebanese, preventing employers from distributing salaries and making it increasingly difficult to acquire U.S. dollars, which have long been widely used as a second currency. Small businesses that need foreign currency to import products have had to do without or turn to a newly emerged black market.
Few blame the protesters, who have united Lebanese from the country’s many religious sects and factions against the political class that has ruled since the 1975-1990 civil war, and which is widely seen as having tanked the economy.
