Professor Hanke suggested establishing a currency board in Lebanon to resolve the currency crisis by covering 100% of the central bank’s Lebanese pounds (LBP) liabilities with a foreign reserve currency. This reform would separate the currency from politics, stabilize the LBP exchange rate, and stop hyperinflation in as little as 30 days. Launching a currency board would unfreeze LBP deposits, put a hard budget constraint on the government, and unify the official exchange rate with the black-market rate in a credible way. Professor Hanke compared the country's current situation to the crisis of Bulgaria in the early 1990s, which defaulted on its debts several times between 1991 and 1997. After setting up a currency board, inflation in Bulgaria decreased to 1.6% and interest rates to 2.43%. The budget deficit turned into a surplus, and foreign exchange reserves rose from $864 million to $3.1 billion in just one year.

The World Bank expected the crisis to cost Lebanon a 19.2% contraction in GDP for 2020, following the 6.7% decline of 2019, and described the situation as a “deliberate depression”. LIMS agreed with the World Bank’s description and explained that the government and parliament failed to reach a consensus on how to tackle the crisis at hand. Actually, the government suggested a plan where the public sector (the government and the central bank) would default on its debt to banks. After the public sector default, banks would become insolvent, so the government decided to wipe out their capital ($21 billion) and impose a haircut on depositors ($62 billion) to cover those losses. The parliament refused this arrangement doubting the assumptions and data provided by the government. After the Beirut explosion, the government ended up resigning and Lebanon has been watching the meltdown with outrageous inaction and the absence of any serious reforms. 

After receiving the Advancing Liberty Award offered by LIMS, Dr. Jean Ellieh, director general of the Tenders Department (TD), received media attention for standing up against policymakers’ recent attempts to violate laws. In fact, Algerian fuel company Sonatrach was unwilling to renew its contract with the state-owned electricity company Electricité du Liban (EDL), and had already notified the Ministry of Economy and Water on this matter in June. Yet the ministry waited until December to suggest a new tender for an alternative procurement of fuel to EDL. Since the tendering process is cumbersome, the ministry leaked details that Lebanon is facing a bitter choice of either accepting a total blackout—as EDL had not purchased fuel—or tolerating a spot cargo contract, until a new tender is complete. Regarding this case, the TD declined to certify the spot cargo deal for its illegality, despite the media pressure exercised by the ministry, accusing the TD of driving the country into an intentional blackout. Given the TD’s refusal to compromise, the ministry “surprisingly” discovered unused fuel reserves, thus preventing nationwide power cuts, despite previous claims.