An episode of the "Scenarios" program (7/21/2022) followed the repercussions of the Bloomberg report, which indicated that crises have consistently demonstrated over the past decades what can happen quickly in countries that suffer from severe economic crises, as these crises often lead to turmoil. Social and political collapse in the economy and governments.
In this regard, the Lebanese Minister of Economy in the caretaker government, Amin Salam, explained that Lebanon defaulted in 2020 on its debts, which led to its loss of financial confidence in the international community, and also caused a lack of confidence in the banking sector and Lebanese politics and the severing of international debt relations.
He pointed out that this backwardness had social and economic repercussions, most notably electricity and subsidizing basic foodstuffs, as there was complete paralysis in the Lebanese economy, which made the country resort to negotiations with the International Monetary Fund to regain its confidence.
He also expressed his hope that the Lebanese situation would not reach the Sri Lankan scenario, hoping that the new government would be up to the responsibility to bear the delicate decisions of the International Monetary Fund to get Lebanon out of its crisis, considering that failure to adhere to its financial and economic reforms would keep Lebanon in a state of financial danger.
Other countries are threatened
As for Tunisia, former Minister of Trade and Economist Mohsen Hassan said that it is among the countries threatened by its inability to repay its foreign debts due to its deep economic crisis, noting that according to financial estimates for 2022, Tunisia needs approximately $7 billion in internal and external financing.
He added that the crisis of the Russian-Ukrainian war and the rise in grain and fuel prices that it caused, made the need for financing also rise, and considered that his country's failure to pay was causing a lack of confidence between the country's partners and difficulties in the banking system.
He also expected that the issue would affect the flow of foreign direct investment, as well as the impossibility of mobilizing external resources in light of the inability to pay, pointing out that the decline in the exchange rate of the dinar against the dollar generates more deficits in the trade balance and the deterioration of purchasing power.
He believed that Tunisia needs a new social contract that regulates the relationship of Tunisians with each other, as well as pursuing political reforms that will return the country firmly to its democratic path, as well as the government's launch of economic reforms that achieve national unity.
According to data on Tunisia's budget, the state's public debt may rise by the end of the year to $39 billion, a record the country has not previously recorded.
The decline in the value of the euro against the dollar has also exacerbated the economic situation in the country at a time when the authorities are trying to reach an agreement with the International Monetary Fund worth 4 billion dollars.
In Egypt, too, the external debt has witnessed an accelerating rise in the past years, as it jumped from about $35 billion only in 2011 to more than $145 billion at the end of last year.
And Moody's, the credit rating agency, warned that debt service, estimated at fifty-three billion dollars, would hinder or reduce the recovery of the Egyptian economy.