Financial colonization: The selection of Lebanon’s next central bank governor is not about stabilizing an economy – it is about deciding which western capitals will control the next phase of Lebanon’s debt cycle, who will bear the painful costs, and placing foreign eyes on all Lebanese transactions.
The Cradle
Yet maintaining the peg demanded heavy dollar borrowing and tethered Lebanon’s monetary policy to the US Federal Reserve. Instead of economic sovereignty, the peg entrenched Lebanon in a cycle of external debt dependency. What followed was not a recovery, but a financial model that funneled wealth upwards while deepening systemic fragility.
From Dollar peg to Ponzi pitfall
Riad Salameh, central bank governor from 1993 to 2023 and a former Merrill Lynch banker, became the architect of this model. Under his governance, Lebanon’s banking sector morphed into a high-risk debt engine, luring billions in diaspora deposits with dazzling interest rates of 15–20 percent.
Rather than investing in Lebanon’s productive economy, these deposits were instead channeled into government Eurobonds, sustaining a Ponzi-like scheme in which fresh debt was needed to repay existing obligations.
At the heart of this system was BlackRock, the world’s largest asset manager and a dominant force in sovereign debt markets. While not formally part of the US Federal Reserve, BlackRock’s extensive influence blurred the lines between regulator and profiteer. During the 2008 financial crisis, the Fed enlisted BlackRock to manage $130 billion in toxic assets. In Lebanon, the firm emerged as a key Eurobond holder and lobbied the International Monetary Fund (IMF) to prioritize foreign creditors during debt restructuring talks.
Western institutions lavished praise upon Salameh’s stewardship, even as the system frayed. In 2017, the IMF hailed Lebanon’s “financial stability,” crediting the currency peg and “adroit crisis management.” A 2007 US Embassy cable described Salameh as “the savior of the banking and financial sector.”
These endorsements entrenched a financial architecture that, by 2019, imploded. When Lebanon defaulted, inflation surged above 300 percent, and ordinary depositors found their savings locked in collapsing banks.
A 2023 corruption probe uncovered that Salameh’s brother Raja funneled $330 million through Swiss accounts tied to CBH Bank, raising serious questions about regulatory oversight. The former celebrated central bank governor now languishes in a Lebanese prison cell, while half a dozen embezzlement lawsuits await judgment in the same western capitals that once lauded Salameh's brilliance.
As Lebanese citizens faced economic ruin, the country's financial system became a battlefield – where foreign creditors, IMF technocrats, and local political factions vied for control of the post-collapse order.
The ‘Economic Hitman’s’ playbook
Lebanon’s crisis mirrors a pattern seen in countries like Greece, Ecuador, and Iraq, where sovereign debt restructuring becomes a lever for foreign intervention and asset extraction. The blueprint is familiar – a page from John Perkins’s Confessions of an Economic Hitman.
Once buried under unpayable debt, nations are handed IMF “rescue” packages laden with conditions favoring external creditors and multinational firms – and never citizens who entrust their life's savings into banks. These measures often deepen inequality, erode sovereignty, and lock struggling economies into dependency.
Lebanon’s energy sector is now a prime target. In 2018, it signed offshore gas exploration deals with TotalEnergies, Eni, and Russia’s Novatek. The agreements granted Lebanon modest royalties of four percent, with profit-sharing capped between 30 to 55 percent – well below the international average. Even with a 20 percent corporate tax, most revenues flowed to the foreign firms due to contractual structures designed to protect investor returns over national gain.
In 2022, the IMF recommended privatizing Lebanon’s electricity sector, slashing fuel subsidies, and resolving $86 billion in banking losses. These measures disproportionately harm ordinary citizens while insulating foreign stakeholders.
This model echoes the post-2003 restructuring of occupied Iraq, where the head of the “Coalition Provisional Authority” Paul Bremer’s Order 39 opened Iraqi oilfields to US firms like Halliburton. In Ecuador, dollarization in 2000 allowed lenders to dictate fiscal policy, with oil serving as loan collateral.
Lebanon now stands on the brink of a similar scenario. Western asset managers have floated debt-for-resources swaps that would use Lebanon’s gas reserves as collateral for sovereign debt relief.
A roadmap from Washington to the IMF
Economic pressure on Lebanon is shaped by think tanks closely aligned with US strategic objectives. The DC-based Foundation for Defense of Democracies (FDD) has played a central role in framing Lebanon’s financial system as a Hezbollah-linked money laundering network, a designation that helped justify sanctions on Lebanese banks during Washington’s “maximum pressure” campaign against Iran.
The Washington Institute for Near East Policy (WINEP) similarly viewed Lebanon’s collapse as a chance to overhaul its economic foundations. In Crisis in Lebanon: Anatomy of a Financial Collapse, the FDD advocated sweeping privatization, subsidy cuts, and debt repayments, prioritizing foreign creditors – even at the expense of Lebanese citizens.
The monograph stressed the need for the US to use its influence to ensure that any bailout aligned with “Washington’s strategic objectives,” chief among them isolating Hezbollah and binding Lebanon to the IMF.
The relationship between Riad Salameh and the US began to be revealed publicly in April 2019 when Lebanese daily newspaper Al-Akhbar published minutes of a meeting between the US Assistant Secretary of the Treasury for Terrorism Financing and Financial Crimes, Marshall Billingsley, and then-Lebanese economy minister Mansour Bteish. The minutes reveal a US official saying:
“We need a governor of the Banque du Liban and a deputy governor who we can trust, and who is sensitive and with whom confidential information about terrorist financing and money laundering can be exchanged. The situation today is that we trust governor Riad Salameh and (former) deputy governor Muhammad Baasiri.”
The Atlantic Council, a think tank with deep ties to US energy interests, has positioned Lebanon’s gas reserves as a tool for regional integration – namely into a US–Israel–Persian Gulf bloc. A 2020 report claimed Eastern Mediterranean gas could catalyze “regional cooperation,” echoing the energy diplomacy behind the Abraham Accords. This narrative promotes Lebanese–Israeli economic normalization via cross-border gas development, even suggesting Lebanon could eventually join the accords.
The select candidates who will shape Lebanon’s financial submission
Jihad Azour, currently the IMF’s Director for the Middle East and a former Lebanese finance minister, is a central figure in the region’s neoliberal restructuring. He was pivotal in crafting Lebanon’s 2022 IMF agreement, which called for eliminating deposit protections, slashing public wages, and enforcing capital controls.
As the architect of Lebanon’s IMF terms, Azour champions creditor repayment and fiscal austerity – policies that safeguard US bondholders like BlackRock and PIMCO while impoverishing local depositors.
A corporate lawyer and former labor minister, Camille Abousleiman has spent decades representing western and Persian Gulf investors. His commitment to Financial Action Task Force (FATF) compliance would bring Lebanon’s banks under global surveillance and further marginalize Hezbollah-linked financial networks. He supports reforms that prioritize western creditor protections and could facilitate foreign ownership of Lebanese energy and telecom assets.
An investment banker with strong links to Saudi and UAE capital, Firas Abi-Nassif, heads the Persian Gulf-backed Phoenicia Fund. He represents the Gulf–Israel axis of economic normalization, likely to push for Persian Gulf investment in Lebanese infrastructure. His leadership would deepen Beirut’s integration into a US-aligned investment network, potentially paving the way for foreign control over key sectors.
A Lebanese–Swiss hedge fund manager and founder of Geneva-based Jabre Capital, Philippe Jabre, epitomizes the offshore financial elite. His recent acquisition of Brasserie Almaza signals renewed interest in scooping up Lebanese assets. If appointed, he would likely champion fire-sale asset privatization and financial reforms that ensure debt repayments to global creditors, echoing IMF playbooks from crisis-struck economies.
Founder of Growthgate Partners, Karim Souaid, promotes public-private partnerships and digital finance solutions aligned with FATF and US Treasury frameworks. His policies would cement Lebanon’s role as a financial satellite of the west, transferring state assets into private, often foreign, hands under the guise of technocratic modernization.
The Amal factor
By installing Yassine Jaber as finance minister, Lebanon's Speaker of Parliament Nabih Berri ensures the Amal Movement’s grip on fiscal policy. While the central bank executes IMF mandates, the Finance Ministry determines their domestic application – who absorbs losses, which assets are sold, and how funds are distributed.
Berri’s decades-long control over this portfolio stems from the 1989 Taif Agreement, which formalized Lebanon’s sectarian power-sharing structure and assigned the Finance Ministry to a Shia Muslim, a post Amal has long held. Over time, the ministry became a tollbooth for political influence, often facilitating – rather than resisting – foreign economic impositions.
Berri’s longstanding alliance with Salameh underpinned the financial Ponzi scheme that collapsed in 2019. Despite the fallout, Berri protected Salameh from accountability, stalled investigations, and blocked meaningful reforms.
With Jaber in the ministry, Amal retains leverage over IMF-imposed austerity, privatization processes, and Eurobond negotiations. Austerity is shaped to avoid harming Shia constituencies, while asset sales pass through political intermediaries before reaching foreign buyers. Debt talks are delayed to shield offshore accounts and maintain elite control.
Despite its rhetoric, Amal is not challenging IMF encroachment – it is co-managing Lebanon’s restructuring to preserve its own influence. While Washington sets the terms, Lebanon’s political class ensures the costs fall on the most vulnerable.
Even within Lebanon, Amal’s leadership is seen as predatory. A classified US diplomatic cable quotes a relative of Amal’s missing founder, Musa al-Sadr, describing Berri’s conduct as “wheeling, dealing, and stealing.” Former Amal MP Mohammad Baydoun was even blunter: “Berri makes decisions in the interests of his family members’ finances, not for the sake of the party.”
Lebanon’s economic sovereignty has long eroded. The real contest is not between resistance and submission, but between factions vying to control a crisis that has become their most valuable asset.
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