Behind the Money

The ‘Ponzi scheme’ behind Lebanon’s economic collapse

Dec 13, 2023

Former head of Lebanon's central bank, Riad Salameh, is embroiled in scandal and accusations of embezzlement that contributed to Lebanon's economic collapse. The podcast explores the allegations, investigations, and the role of the political establishment in the crisis. It also discusses the potential consequences of Lebanon's war and the challenges faced in rebuilding the economy.

21:39

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Riad Salameh

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Quick takeaways

Lebanon's central bank governor, Riaz Salameh, is facing allegations of fiscal fraud and embezzlement, shedding light on the extent of corruption among government officials.

Lebanon's economic collapse can be attributed to the unsustainable financial engineering under Salameh's tenure, which relied heavily on a pegged exchange rate system, resulting in a high debt-to-GDP ratio and eventual economic depression.

Deep dives

The Economic Crisis and Bribery Allegations

Lebanon's central bank governor, Riaz Salameh, is embroiled in financial allegations, including fiscal fraud and embezzling $330 million of public funds. The timing is significant, as Lebanon was facing an economic crisis while Salameh seemingly had an extravagant lifestyle. The allegations against him highlight the level of corruption in Lebanon's government officials.

Introduction

2min

Lebanon's Economic Collapse: The Scandal of Riaz Salleme

10min

The Allegations and Investigation

7min

The Political Establishment and Lebanon's Economic Collapse

2min

The Potential Consequences of Lebanon's War and the Roots of its Economic Crisis

2min

For years, Riad Salameh was praised for his revolutionary financial policies as head of Lebanon’s central bank. But suddenly, the country plunged into an economic crisis. And Salameh left the central bank with a disgraced reputation and, investigators believe, a massive personal fortune. So what happened? The FT’s Middle East correspondent Raya Jalabi walks us through the storm of allegations Salameh faces, and the decisions he made that economists think sparked the entire crisis.

Clips from Associated Press, CNN, TRT World, DW News, Al Jazeera English, France 24, Asharq News, Annahar News

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For further reading:

‘The magician’: Riad Salameh and the plundering of Lebanon

‘It’s cool to have money again’: wealthy Lebanese party out the crisis

Long-awaited auditor report slams governance at Lebanon central bank

Lebanon’s ex-central bank chief hit with international sanctions for alleged graft

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On X, follow Raya Jalabi (@rayajalabi) and Saffeya Ahmed (@saffeya_ahmed)

Read a transcript of this episode on FT.com

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