Masthead graphic based on a painting by Gudrun Thriemer.

Friday, January 16, 2009

David Schenker, "As Islamists exploit financial crisis, Lebanon stands fast," Christian Science Monitor, January 15, 2009.

Washington - More than two weeks into the Israeli-Hamas war, the eyes of the world are narrowly focused on the crisis in Gaza. In the Middle East, however, it is not just the Palestinians and Israelis who are suffering, and it is not only Hamas which hopes to capitalize.

  Like other Middle Eastern states, the local bourse has declined somewhat, but real estate markets hadn't crashed, and banks were not failing....Years ago, Riad Salameh issued a [Central] bank circular prohibiting Lebanese banks from subscribing to subprime mortgage products. This rule complemented already extant regulations, limiting banks' participation in other risky products like derivatives.

Lost amid the ongoing hostilities is the profound impact of the global economic crisis on the Middle East. Like the rest of the world, Arabs have also found themselves victims of the downturn. Even the Gulf, still floating on a cash cushion from the recent oil boom, is tightening its belt.

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