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News > U.S.

US Policies Hinder Arab Countries' Financial Situation: Khoury

  • U.S. dollar banknotes.

    U.S. dollar banknotes. | Photo: Twitter/ @A_Reader_FT

Published 17 February 2023

Arab countries faced huge depletion in international reserves that led to repeated devaluation in their local currencies versus the U.S. dollar.

The United States is a major contributor to the financial predicaments in some Arab countries, due to its aggressive financial and economic policies, said Pierre Khoury, vice president of the Arab Chinese Cooperation and Development Association.

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Since 2022, the United States has raised interest rates on deposits to prevent capital flight, forcing other nations, namely vulnerable ones, to increase their interest rates as well to hold deposits in their banks.

The U.S. move has also compelled those countries to pay higher interests on their international debts, resulting in tremendous pressure on their foreign reserves, Khoury said.

"Most of the financially vulnerable Arab countries faced huge depletion in international reserves that led to repeated devaluation in their local currencies versus the U.S. dollar, causing mounting inflation that affected the budgets in developing nations," he added.

While accusing the United States of inflaming wars in the Middle East, Adnan Bourji, director of the Lebanese National Center for Studies, pointed out that the United States has damaged regular ties among neighboring Middle East countries through economic sanctions, giving the example of the Caesar Act imposed by the United States.

The Caesar Syria Civilian Protection Act of 2019 is a piece of U.S. legislation that sanctions the Syrian president and government over what Washington claimed to be "war crimes against the Syrian people."

The act was signed into law by former U.S. President Donald Trump in late 2019 and came into effect in mid-2020. "This is why Egypt refrained from providing Lebanon with gas for electricity for fear of unjust American sanctions," he said.

The expert also mentioned that in early September 2021, governments of the four Arab countries agreed to export natural gas from Egypt to Lebanon via Jordanian and Syrian territories, in a bid to alleviate Lebanon's power shortage. However, the gas has yet to flow.

In October 2022, Lebanese Energy Minister Walid Fayad told Egyptian media that the Caesar Act and related World Bank terms were stalling the deal.

For Refaat Badawi, an adviser to former Lebanese Prime Minister Salim al Hoss, it is natural that the United States relies on economic sanctions such as the Caesar Act, since its attempt to submit Arab countries to its military power has failed, prompting America to weaken the Arab world economically and financially.


Adnan Bourji
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