this post was submitted on 19 Mar 2026
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Chapotraphouse

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Obviously, I don't completely agree with everything the author has to say, esp wrt role of private sector in the economy. And it's not like Israel wants Lebanon to develop.

But the throughline is valid. Don't give private sector access to foreign currency at a fixed exchange rate. It means the state has to accommodate private demand for foreign currency, which it can't long term in most cases (unless you are an oil exporting Gulf state or similar).

The same applied to socialist countries too. The Soviet Government never promised any private individual or firm access to foreign currency at fixed rate. Since most of the economy was state owned, the state could channel foreign currency earnings where it deemed necessary. And private individuals had access to residual foreign currency liquidity in the black market at market rate only.

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