The Faculty of Business Administration & Economics at Haigazian University organized a webinar titled “The Lebanese Economy: Recent Problems and a Banking Innovation – the “CHO””, which took place on Friday the 16th of April 2021, on Zoom with a live streaming on Facebook.
The two-hour webinar brought together three experts and scholars from the Lebanese financial and academic sectors, to discuss and analyze the current Lebanese economic crisis and propose innovative solutions to it. The three distinguished speakers were, Dr. Riad Obegi, Chairman of CHO Advisory and Banque BEMO, Dr. Fouad Zmokhol, Dean of the Faculty of Business and Management at Saint Joseph University, and Dr. Sami Nasr, President of ECE Consultants.
The webinar opened with a word of greetings from Haigazian University’s President, Rev. Dr. Paul Haidostian, who stressed on the need for such conferences and expert discussions to understand the economic crisis.
“We habitually count the internal political, moral and strategic failures all day long, and count all the external reasons for making our conflict so sharp, but the need is to learn how to grow again, and learn to manage well again”, said Haidostian.
This was followed by the introductory word of the Dean of the Faculty of Business Administration and Economics at Haigazian University, Dr. Fadi Asrawi, who described Lebanon as one of the highest indebted country in the world in terms of the ratio of debt-to-GDP. Asrawi considered that the Lebanese monetary policy and banking sector, which were once the envy of most of the neighboring countries in the region, is struggling today just to stop a total financial collapse.
In his presentation titled “The current economic crisis in Lebanon: What are the possible solutions?” Dr. Riad Obegi addressed the current economic and financial situation in Lebanon, and the main challenges that businesses and banks are facing.
Obeji stressed on the importance of trust as the first and foremost factor for recovery, and how the lack of trust is further deepening the crisis.
Obegi went on proposing solutions introducing the “CHO Prime” as a tool to stimulate growth by building on the real estate capital; The CHO is a banking instrument in the form of a real estate guarantee certificate, which can be deposited at a bank just like depositing cash, but instead of receiving interest on cash, the depositor earns a fee on their CHO. This guarantee will be used by the bank to borrow more efficiently through the interbank market, while using the CHO as collateral.
Obegi also introduced the CHO Pro, which unlike the CHO Prime, does not require any legislation, but a circular issued by the Central Bank, as an efficient tool to reinforce the capital of banks and restore their lending capacity through subordinated real estate guarantees.
Next to speak was Dr. Fouad Zmokhol on “Crisis in the Lebanese Economy – Proposed Solutions”. Zmokhol talked about the need of banks to restructure and recapitalizate to face the ongoing financial and liquidity crisis. “The CHO is an innovative and very creative idea that can transform unproductive lands into fund generation while increasing banks assets efficiently without major investment,” said Zmokhol.
Zmokhol also stressed on the concept of the “4R actions” to be undertaken by institutions in order to survive:
•Resolve: address the immediate challenge to workforce and partners, reduce risk and stress
•Resilience: Address near term cash management
•Return: create a detailed plan to return to business after the storm
•Re-imagination: re-imagine the next new normal and how to make businesses more resilient to shocks.
•Reform: anticipate policies and regulations of the industry and evolve.
Zmokhol went on to add that companies’ revisions should also take into account new structuring methods such as cross functional teams, new HR methods such as identifying new leaders, champions and cohesive groups, as well as new processes and technology.
Zmokhol concluded his insightful presentation by putting particular emphasis on moving from the Old 4 Ds strategy (Diversify / Differentiate/ Develop / Delegate) towards the new 4 Ds plan (Discover / Design / Decide / Deliver).
For his part, Dr. Sami Nasr presented an “Analysis of the Crisis in the Lebanese Economy”, suggesting a comprehensive and an integrated solution to rebuilt trust in Lebanon.
Nasr put particular emphasis on political and global reform, stressing on the main pillars to ensure this, such as, undertaking deep financial reform, launching a structure for administrative reform and modernized procedures, setting up a procurement law to reduce corruption and promote transparency, determining a clear chain of command for decision making, reconstructing the private and international debt, restoring and reestablishing confidence in the national currency, securing a full fledge support to the private sector, maintaining talents and entrepreneurs.
The webinar was marked by stimulating virtual discussions and academic exchange led by the moderator Mr. Garabed Boghossian, from Haigazian University.
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