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To pay or not to pay: The debate over Lebanon's eurobond continues

With the deadline approaching for Lebanon to make a $1.2 billion payment on its eurobond debt amid growing economic and currency crises, the debate over whether to pay has become increasingly heated.
The payment is due March 9, and officials have said they will announce a decision Friday or Saturday. As Al Arabiya English has previously reported, a number of financial experts have pushed for Lebanon not to default, saying that it would ruin the country’s prospects of accessing needed international investment in the future. The country’s banking association initially urged for the bond to be repaid, but they revised their stance and asked for a bond swap, rather than default.
On the other side, a number of economists and activists have argued that to make the payment now – particularly if a future debt restructuring is likely – would divert scarce dollars from meeting the population’s most basic needs.
Importers, which have to pay their suppliers in foreign currency, have struggled to get access to dollars at the official rate of 1,500 Lebanese lira to the dollar or have been forced to buy them at the inflated black market rate, which is now around 2,500 lira to the dollar.
"We know that there’s a very limited supply of dollars left
Given the likelihood of a debt restructuring in the future, Akkaoui said, “If we chose to use the central bank’s reserves this time and do a bond swap, it’s kicking the can one more time…Even if the government decided to pay right now, unless there's a huge change of wind that yields a big fiscal surplus in dollars and a balance of payments surplus, we're going to restructure at some point."
He added, "What Lebanon needs right now is a multi-phased plan with multiple pillars within it. It needs to be fiscal, monetary, financial, and macroeconomic."
Others have argued that foreign creditors should not be the priority when Lebanese depositors are not allowed access to their own money. Former Labor Minister Camille Abousleiman, an attorney who worked on the legal framework for Lebanon’s bonds, is among them, and he has advocated for the country to restructure its bonds and seek an IMF bailout.
“It is not permissible to pay foreigners while you are forcing the Lebanese to wait in front of the banks to obtain a hundred or two hundred dollars,” Abousleiman has said.
Nothing to lose
Jad Chaaban, an associate professor of economics at the American University of Beirut agreed, saying it is “unethical” to use the country’s dollar reserves to pay foreign creditors under the present circumstances.
As to the counterarguments that defaulting would ruin Lebanon’s reputation, making future borrowing more difficult and expensive, and might embroil the country in costly lawsuits, Chaaban said, “Our reputation is already very bad and our debt is very expensive, so you don’t have anything to lose, basically.”
Some officials have floated the idea of asking Lebanese banks to buy back bonds that they had sold to foreign investors, which would ease the path to restructuring. Chaaban said he thought that could offer a viable option.
“I frankly think if some of the holders start accepting, the rest would accept, because it’s a small fraction of the funds they have – especially the foreign ones, and I don’t think, frankly, that they are willing to pay lawsuits on such small amounts compared to the other funds they have,” he said.
Another contentious issue that will need to be addressed, whether Lebanon makes the payment or not, is whether the country will seek an IMF bailout. While some have argued that there is no alternative, many are wary of the potential austerity measures that would be imposed, and Hezbollah, which is a key part of the coalition that appointed the current government, has opposed the idea.
No good options
Paul Sukkar, an economist and activist, said he opposes both the IMF bailout and any bond payment, particularly of interest, which he described as “depleting our reserves to pay a debt that we’re going to restructure at the end of the day.”
But he acknowledged that whatever path the government chooses will entail economic difficulties and more tough choices.
“The best of both options is bad,” he said. “Now we’re at a stage of total economic collapse, so we’re dealing with bad and worse.”
source: Abby Sewell
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- April 23, 2025
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Aimed at secondary school students, the event brought together a distinguished group of academic professionals and technology experts to mentor and inspire young participants.
More than 100 high school students from across the Kingdom of Bahrain took part in the hackathon, which featured an intensive programme of training workshops and hands-on sessions. These activities were tailored to enhance participants’ critical thinking, collaborative problem-solving, and team-building capabilities, while also encouraging the development of practical and sustainable solutions to contemporary challenges using modern technological tools.
BENEFIT’s Chief Executive Mr. Abdulwahed AlJanahi, commented: “Our support for this educational hackathon reflects our long-term strategic vision to nurture the talents of emerging national youth and empower the next generation of accomplished female leaders in technology. By fostering creativity and innovation, we aim to contribute meaningfully to Bahrain’s comprehensive development goals and align with the aspirations outlined in the Kingdom’s Vision 2030—an ambition in which BENEFIT plays a central role.”
Professor Riyadh Yousif Hamzah, President of the Royal University for Women, commented: “This initiative reflects our commitment to advancing women in STEM fields. We're cultivating a generation of creative, solution-driven female leaders who will drive national development. Our partnership with BENEFIT exemplifies the powerful synergy between academia and private sector in supporting educational innovation.”
Hanan Abdulla Hasan, Senior Manager, PR & Communication at BENEFIT, said: “We are honoured to collaborate with RUW in supporting this remarkable technology-focused event. It highlights our commitment to social responsibility, and our ongoing efforts to enhance the digital and innovation capabilities of young Bahraini women and foster their ability to harness technological tools in the service of a smarter, more sustainable future.”
For his part, Dr. Humam ElAgha, Acting Dean of the College of Engineering and Technology at the University, said: “BuildHer CityHack 2025 embodies our hands-on approach to education. By tackling real-world problems through creative thinking and sustainable solutions, we're preparing women to thrive in the knowledge economy – a cornerstone of the University's vision.”
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