Fadi Gemayel, head of the Association of Lebanese Industrialists (ALI), warned on Tuesday of the collapse of Lebanon’s industry sector if banks fail to secure needed liquidity for the import of the raw materials.
“If banks fail to adopt a proper mechanism to secure the needed liquidity, the Lebanese market will soon face an absence of some necessary products due to the lack of the needed raw materials,” Gemayel was quoted as saying in a statement by ALI.
Gemayel said that Lebanese factories are not functional these days and tens of thousands of families working in this field are threatened to face very tough living conditions.
The economic slowdown and the drop in cash injections from Lebanese abroad have reduced the central bank’s foreign currency reserves, leading to a shortage in U.S. dollar for both businesses and individuals.
Central Bank Governor Riad Salameh announced a day earlier that he has asked banks to secure the needed liquidity for businesses in a bid to save the economy from further deterioration.
“We hope that banks react positively to Salameh’s demands for us to be able to import our needed raw materials and save our factories from bankruptcy,” he said.
Gemayel added that a big number of factories may soon shut their doors down due to the absence of raw materials in the country which disable factories from producing and selling their products.
The Lebanese industry sector has been facing great challenges in the past few years due to competition by other countries, the absence of proper power supply, high cost of labor and other factors.
Successive governments in Lebanon failed to address these issues leading many factories to go out of business.