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CNBC Transcript: Saad Hariri, Prime Minister of Lebanon

Below is the transcript of a CNBC Exclusive interview with Lebanese Prime Minister Saad Hariri. The interview was first broadcast on CNBC's Squawk Box Asia on 4 September 2019. If you choose to use anything, please attribute to CNBC and Hadley Gamble.

Hadley Gamble: Your excellency, thank you so much for joining CNBC. I want to kick off by asking you about Lebanese economy today, you have a very high debt to GDP ratio, around 150 % and you've now said that the country is in an economic emergency, is this an economy that's on the verge of collapse?

SAAD HARIRI: Look, we understand that we have a problem and we know what the problem is and we need to fix that problem. And we have started fixing it from the budget of 2019. The problem is the fiscal deficit problem that we have had in the past years. We had a lot of talks with a lot of institutions, financial institutions, especially the IMF, and all of them are giving us advices on how to move ahead. Our strategy is to stabilize the problem that we have. Most important thing is not to deteriorate more, right? So what we are doing is, fixing our debt to GDP, our deficit and the budget to 7.6% this year, we want to go down to 7% next year, or maybe a little bit less. And then, you know, continue on stabilizing this deficit. At the same time we are building the platform of new laws. Of the PP law that involves a relation between private sector and public sector, we want to go on privatization fully uncertain areas and this is what we are preparing. Electricity is one of our biggest problems. And we passed a strategy for the electricity by mid-or end of September the RFE will be ready, it's being worked with the IFC and the World Bank and our ministry and we launched the base. In the beginning of the year we should have a winner and the work starts on the electricity. The problem that we have, and yesterday we had a meeting at the presidential palace, where we put certain criteria that we have to reach within the coming 3 years. This is what we are trying to do. I understand that we have a problem but I am extremely confident that we can get out of this problem if we follow through all the steps we put in front of us.

HADLEY: Ok, so when you declare an economic emergency, generally the rule is that you call the IMF, you bring in the cavalry. Do you have any plans to do that?

SAAD HARIRI: We look, we had the IMF here, had long talks with the IMF, the IMF told us what we need to do. We didn't go into a program because we feel the procedures and the reforms we are going to do are the same things the IMF are advising us to do.

HADLEY: Wouldn't you want them on board?

SAAD HARIRI: I think the IMF has certain criteria that we cannot, especially when it comes to the Lebanese pound. This is something that we have extreme sensitivity on, you know. IMF wants a free you know Lebanese pound where people let the market decide what kind of Lebanese pound we have. We believe in the government and in the ministry of finance, also the central bank, we believe that keeping the Lebanese pound at 1,500 is the only stable way to move forward with these reforms. That's the only difference we have with the IMF. I think today why do we need a program, if you have a CEDRE also program also next to it that allows you to invest in the infrastructure to prepare the country on the growth path. What we need to do is the structural reforms and the financial reforms that stabilizes the country and that will build the platform to start investing in the country. And we have so many projects that are you know, extremely available for any investor in the world to come and invest. Today if you look at the airport, if you look at the ports, if you look at the telecommunication, if you look at the oil and gas which is you know, the first round Eni and Total and Novatek came to build. But this round you have a lot of companies, international companies who would love to come, you have the Qataris, we have the Malaysians, we have the Omani, the French, the Italians, maybe American companies are coming to invest in our oil and gas so we are doing the reforms we need to do to stabilize the downfall we are going through and once we stabilize it then we can see, you know that going back up. But it is a difficult moment for Lebanon but realizing it is difficult and the political consensus that we have around this. This is what's important. What's – if you want to go through an IMF program and we don't have political consensus we will never reach the numbers, but if you have a political consensus on reforms, all of them are advising you to go through, especially S&P or the IMF or the Fitch, or Moody's they tell you what you need to do in the country and we are doing it, then why go to the IMF?

HADLEY: It's tough though, isn't it. At the end of the day you have to convince the private sector. You can keep that peg as long as you want and Riad Salameh has done an excellent job engineering that to make it a reality, but at the end of the day you can't legislate growth, and you gotta get the private sector on board…

SAAD HARIRI: Absolutely… that's what…

HADLEY: ...And a lot of people in the private sector though, are very concerned about what's been happening with the central bank…

SAAD HARIRI: Absolutely, look, the problem is what today? It's financial, it's our financial our deficit and our budget and we are not able to stabilize it. What we did in 2019, we took a lot of measures that will stabilize this in our budget on the second hand we have projects on privatization whether its data center, whether its airport whether it's the highway roads, we are looking also at toll roads, trains, all of the private sector interests, we are taking it into consideration and we are talking to the private sector.

HADLEY: What about telecoms?


HADLEY: What about telecoms, are we going to see that opening up? Because that could be big money for this country.

SAAD HARIRI: Absolutely, look, if it were up to Saad Hariri today I would privatize it tomorrow. But, since I have to have a consensus here, we will have to have a public-private partnership. And this is what we are discussing in the coming two months, we will arrive to a decision and then we will take this sector to the private sector. Maybe have a golden chair with the government and see how we do the revenue share with the companies that come forth and we are taking advice from IFC, World Bank and others, also to see how to move forward.

HADLEY: So, a lot of people want to give you advice, and a lot of people in the private sector here they look at Lebanon and the potential of this country and the infrastructure is crumbling, this is an economy on the verge of collapse, they're worried about this peg as I mentioned, but as you say there are opportunities, in terms of privatization. Give me specifics on what we are going to see, you say would do the telecom sector if you could, what else?

SAAD HARIRI: You will hear very good news on the airport in the coming few weeks to come we want to, we are discussing with the IFC how to move forward to take the airport private, how to do a partnership public and private, this is something that has been ongoing since actually a year, now they finalize, in coming few days they will finalize the numbers and present to us, and we will agree on it in the government and then we will take it public (inaudible). We'll take it to the private sector to invest in the airport. This is one of the projects that is ready. The data center we are still are discussing with certain political parties, also that is ready, we will launch it this year. We need to show like you said, the people, the international community and businesses that we are serious about privatization, this is why also we are going into corporatization, of the port, of the yesterday, we had ideas to take public middle east because it's making money why not taking the middle east public... the casino, the Regie, also its where we, it's an institution we have for tobacco, its making a lot of money, we should take it also public. So we are going down this road, we didn't have the decision in the past because we were political… diff political parties, you know didn't understand the severity of the problem we were facing. Now they understand and now they understand that they need to go towards this process.

HADLEY: Sir, what about the poor in Lebanon, because at the end of the day we can galvanize the private sector and get them to invest money, um, vested interest, talk of corruption, but at the end of the day you've got to answer to constituents, you've got to answer to the poverty problem in this country, what about the poor because there isn't a social safety net?

SAAD HARIRI: We have programs today that work on the poorest in Lebanon and this is in collaboration with Germany, with Great Britain, and they put a lot of money in this fund and we are working a social program for all of these extremely poor people in Lebanon, in Tripoli for instance, it's named the poorest city on the Mediterranean. So a lot of these programs are going into these cities, in Aakkar also in Bekka also, you have almost about 40 thousand families that need this kind of help, and this is something we've reached about 15 to 18 thousand so far with-our program and we want to reach the 40 thousand hopefully by the end of 2020 or mid-2021.

HADLEY: And a social safety net, an ability for folks to have a second chance as they age, that the public system will take care of them.

SAAD HARIRI: A pension fund do you mean? We are doing the reform, this reform of the pension fund, it's finally finalized by the Ministry of Finance and we are working also with the World Bank, to be presented by the government in the, I think in one month, and we will pass it by the government and we will take it to the parliament, to be approved by parliament, so we are working on the pension reforms, also you have the pension for the elderly, this is something that is extremely important, it is in the parliament, the government has sent it to the parliament, we're working with parliament very closely to finalize this uh, we call it the (inaudible), which is the pension for the elderly, and this is a program which uh, is already in the parliament and we should finalize it by the end of the year.

HADLEY: Walk me through the challenges in your mind, to achieving what you're trying to achieve, because at the end of the day, you are Saad Hariri, you are one man, one political party, you've got a lot of folks to keep happy in order to get all of these things done and accomplished…who are the partners that we see, what are the challenges?

SAAD HARIRI: The challenges is the region… to be honest with you, what we suffer in Lebanon is not only us that are suffering, everybody know that this global economy, also is slowing down, because this trade war that is happening, all of this is hurting also Lebanon. From another you know, perspective it also helps our deficit, our budget, because you know, prices are going to go down. Oil is already down, so these are things that are good for us, but when it comes to growth this another problem for us, because we need people to invest in Lebanon, that's why this is a problem, but at the same time if you look at you know, the interest rate, it will remain the same, for us, so interest rate, if it goes lower…

HADLEY: (interrupts) and you got a help out from the President….really…

SAAD HARIRI: All of this is helping us but the challenge really is to be honest with you is how do you manage a country with 1.5 million refugees also, it's a burden, because if you look at the….

HADLEY: (interrupts) do you think the international community has a responsibility that they're not fulfilling?

SAAD HARIRI: They're not fulfilling…. Honestly, they're fulfilling part of it, I'm not saying they're not fulfilling, but is it enough? The United Nations comes up, or the World Bank comes out with a report that says since 2017 the refugee problem costs $17 billion and we only get $6 billion it tells you there is a gap, so uh, and this is 2015, now we are at 2019, and you can imagine the cost is higher today, the problem is bigger today... plus you know you have more tension, these are one of the challenges.

HADLEY: And do you believe these folks will ever be able to return?

SAAD HARIRI: Oh, they will return..

HADLEY: You believe that?

SAAD HARIRI: They have a country. They are not… you see….

HADLEY: But if they are in danger, they're not going to leave….

SAAD HARIRI: Of course they're not going to leave but the difference between them and the Palestinians is that the Palestinians don't have a state to go to, there's a huge sensitivity with Israel you know, the baggage that comes with it, with the Syrians, yes there is a regime, and I believe that the regime eventually will be forced to have his people return into Syria, whether through the Russians, through an agreement between Americans and the Russians, but I truly believe, if you ask any refugee today - in Lebanon, in Turkey, in Jordan, in Iraq, do you want to go back to Syria? They will say yes but they're afraid. And now, you know, they're afraid today, but as Lebanese were afraid when we had the civil war, most of them came back, a lot of them came back, some of them didn't come back, I truly believe the people, the refugees who are in Lebanon will go back to Syria.

HADLEY: Speaking of Lebanon in this context, when I speak to investors, people on the street, families that I know, raising kids in this country, there is a fear there. What is your message to them? Because they are not just afraid of the regional situation… They're afraid the government doesn't have a handle on this…

SAAD HARIRI: No no, I am confident that we have a handle on that.. you know, the problem we had in the past Hadley is that people didn't realize the economic problem we have, and the debt that we have, people thought, its ok we can…

HADLEY: (interrupt) ….kick the can down the road….

SAAD HARIRI: …Here and all of that, what they didn't understand is that we have to change the way we work. And this is what we've been saying since day one in 2017, and going to CEDRE, we Lebanese, me, myself, we need to do these reforms, not because the IMF asked me or (inaudible) asked me, because I believe we can change, I cannot have a commercial law done in 1953 and we are still working on it, and today we have startups all this, you know, new digital economy that is, we want to make Lebanon a digital Lebanon.

HADLEY: To do that you've gotta get the internet working…

SAAD HARIRI: Yes, but we have invested about $700 million for the platform for fiber optics and LTE and everything to prepare us to be a digital government, we started in mid-2017 or end 2017, by end of this year we will have covered 30 % of the Lebanese territory in fiber optics, by next year we will have covered about 80% of Lebanese territories, and by 2021 we will have covered 100% of Lebanese territories. This is why I am saying, stabilize the country, the fiscal, our fiscal problems, invest in the infrastructure and prep the country for the digital economy that we want to pursue, we want to also fight corruption, we have a real serious corruption problem.

HADLEY: Let me ask you about that, you do indeed have a corruption problem, it is something that is discussed quite widely and very publicly, as we are mentioning it now. Are we willing to put together a commission? Potentially, that answers to the parliament?

SAAD HARIRI: Absolutely, we are ready to do everything and this is why we decided to issue four laws. Those laws to protect the whistleblower, to have a commission for the anti-corruption in the government, a commission to prosecute those who are corrupt and also we nominated in parliament the high commission who will prosecute ministers, Prime Ministers and any member of the government, and we just did it a month ago, all the tools to fight corruption are there, now we have to make them function we have to, we appointed the last two we now need to appoint the first two.

HADLEY: So when we talk about corruption, it's a systemic problem, what's the timeline there? Because you say that you put together a coalition, a group of people who will be checking, back-checking, but at the same point you've got to have a timeline, to eradicate corruption by when? What's your timeline?

SAAD HARIRI: I think eradicating corruption…

HADLEY: (interrupts) it's part of the privatization, no doubt….

SAAD HARIRI: Absolutely… everything that's going to go through from CEDRE, especially the privatization will have special committees, uh, you know, following the transparency, one of them is from the creditors because we, what we did in CEDRE we asked government to have a committee to follow all these projects and asked that there is full transparency on these projects. On another hand, how do you get rid of corruption in a country like Lebanon, like this confessions and this is one of the hardest questions and I am glad you asked me. All the political parties need to understand, they need to stop protecting on the basis of confessions and they need to let those who made this corruption pay for corruption, go to court and go through procedure. In the past, because we were so divided in the country, especially after the assassination of my father, there was such divide, nobody was willing in the country to let go of one of their confession to course, now you would find, take the justice ministry, now you have 10 judges, who re going through prosecution because of corruption and this is the beginning, you have a committee

HADLEY: Is it just a slap on the wrist? And you see them back in the job in a couple of years, because that's what it's been in the past…

SAAD HARIRI: No no no, this is, these people are going to be fired

HADLEY: So you are committed to saying that's it?

SAAD HARIRI: For us that's it… we had a committee that formed to prosecute employees in the govt. This committee was made In 1955, or something, 58, it has never stopped one employee. Since this new government we have stopped 17 employees and we are continuing. This is a process and it's going to take time but let me tell you also what helps fighting corruption… is having a digital economy, having e-government, because the problem is this uh, Lebanese citizen is going from one place to another place, to get things done, if you have an e-government, you will catch all the corruption that is there and we are fighting corruption, we are at the beginning but I truly believe that by the end of 2021/2022 we will have gotten rid of a lot of corrupt people.

HADLEY: What about the percent? What are we saying, cut corruption by half? By 2020?

SAAD HARIRI: More... I hope, more, I think we should cut corruption by 60%, 70% in a few years with the work that we are doing, I think we are going to get there.

HADLEY: I am going to hold you to those numbers…

SAAD HARIRI: Come back and ask me about it and I will tell you how many people are in jail

HADLEY: Walk me through your partners when it comes to the international community, the folks that I speak to… Lebanese and foreign investors say there is a lot we could do but the political situation is no doubt tied to geopolitical situation. And when we talk about the situation in Syria, when we talk about the situation in Israel, when we talk about the situation in the Middle East generally, who do you see as your partners in this region?

SAAD HARIRI: Look, I should see everyone as a partner in this region, if I want to be purely focused on the Lebanese interests. There are differences in the region you know, with Iran, and what's happening in between Iran and the world and all that, but it doesn't mean it changes the whole process, that Iran shouldn't be a partner, or we will find partnerships between the Gulf and Iran. This is, my problem with this whole issue, and I am going to be very blunt, is, I find in the Arab world, we are too busy fighting each other instead of focusing on what really matters, is the citizen. That's one, two I find that these wars today are economical. This is what's happening in this region is out of fashion, and it's crazy and I believe it's outdated. What we need to do in this Middle East is focus on our potential and what we can do and also what the Arab world can do.

HADLEY: But it's kind of tough isn't it….

SAAD HARIRI: This is when I commend what President Sisi is doing, in Egypt, what MBS is doing in Saudi Arabia. There is a lot of, you know, if you take the case of Egypt, how much Egypt is working on its economy, how much reform they are doing, how much they did in electricity, they did, this is what we need to do.

HADLEY: So often, folks would say, and quite rightly, that's come at a huge cost for the public, they've had to take a major haircut to do that, the reforms and how that's impacted, they have had to devalue the currency there. But also human rights, to do that you've got to be a strong man, that's what we see in Egypt and that's what we see in Saudi Arabia.

SAAD HARIRI: That's why we have to find the balance here in Lebanon, we cannot do this like everywhere else but I believe in Lebanon we have this special equilibrium between confessions, people think they are majorities and minorities, we are all minorities in the country, Muslims are minorities and Christians are minorities and this is how people should think but I truly believe the problems here in this region are the tensions we have in the region, my allies in the country, I believe if I look back in 2017, end of 2016, when we forged this new alliance and consensus, it was very you know, unclear waters that I was walking into, but today, I truly believe that everyone is conscious there is a problem and everyone wants to take action, the issue is how to combine all our efforts in one big package of reform, that will come with all the things we need to do, it's going to be tough but it's worth the time, the hours, the risk. We will have demonstrations in Lebanon, I'm saying it now, but we will have it one time, and that's it, fix it.

HADLEY: What is the haircut going to look like? Because you're saying you're not going to devalue the pound, what does this mean for the average Lebanese? What's the haircut? How hard is this going to be?

SAAD HARIRI: Look, if we fix electricity, ok, we said this year, we usually pay $2 billion in subsidies, we decided yesterday in the presidential palace we will pay $1 million. And we have to live with this $1 billion of subsidies, whether we reach our goal, if we don't reach our goal by mid, the 2nd or 3rd quarter then we will have shortage of electricity. We cannot borrow more, full stop, this is what we have to do. When it comes to taking decisions on privatization, telling the private sector that we are ready for airport, ports, telecoms, data center, things like this that are important for private sector, like this they have the platform they need to do, they need to have to grow the economy themselves, and plus while they do all the austerity program you have one big benefit that is there which is CEDRE, from one place, from one side you are doing an austerity program in your budget, on the other side you have all these projects from CEDRE, that will, you know, for each billion dollar you spend in this country that's 1% of growth. So, If we do CEDRE like we're supposed to you know, achieve it then there will be growth and this austerity program will be, you know, it will go in parallel.

HADLEY: How soon are you going to be able to unlock that money in terms of that $11 billion in commitments?

SAAD HARIRI: The time today is in Lebanon, tomorrow I will be meeting with him to finalize the last touches, I will be going to Paris, also to Germany, also to Abu Dhabi to finalize agreements between Lebanese government and the Emirati government, also to Saudi Arabia to finalize agreements between….

HADLEY: (interrupts) because the Finance Minister (Saudi) told me he's with Lebanon all the way but that money isn't here yet, but you're going to get it?

SAAD HARIRI: Yes, we're going to get it. We want them to invest them in Lebanon and we want also to invest in Saudi because we have a lot of capital also, and you have the Lebanese diaspora also, that is all over the world that when you go to London when you go to France, you see them you talk to them and they're willing to come and invest but they need the right stability and the right reforms, if they see that we're doing all of this then it's only a matter of time before they turn the wheels around.

HADLEY: Walk me through this, because at the end of the day, you say you admire the strong men and what they've achieved, but you're not in a position in Lebanon to do what Sisi would do, as an MBS would do, but at the end of the day you also have to contend with geopolitical issues, how tough is it for you when you have the USA, which is in many ways a partner of Lebanon, strong arming the regime in Tehran…And creating, according to many folks I speak to in the GCC a myriad of issues in the Persian Gulf, that has an impact on oil prices, stability, potential for growth in Asia, how tough is that for you? Because this isn't a problem that's local, this is happening here at home.

SAAD HARIRI: The only thing about this that scares me is a war

HADLEY: How close are we to that?

SAAD HARIRI: I don't know, and I don't think anybody wants war.

HADLEY: Is it a possibility?

SAAD HARIRI: It's a possibility, like any other possibility, but I think it's a smaller possibility, than going to talks, because I believe President Trump wants to talk, and I believe the Iranians want to talk and I believe the gulf wants to end this…

HADLEY: Because they realize the US isn't going to back them up if they go after Iran…

SAAD HARIRI: In the end, people want stability, countries need stability. For us in Lebanon the challenge, like you said, when we were divided, was extremely hard, but we elected President Aoun, it broke all the alliances that we had in the past, it just molded Lebanon into new alliances, um, these alliances, were basically trying to work since 2017, 18 but today they all realized one thing, if we do not do the reforms, regardless of the regional problems, regardless of regional backups, friends, whatever, we have to do it ourselves, this is what's good. They understand that need to do these steps.

HADLEY: When I speak to investors, those here in Lebanon, they live here in the country, they believe in this country, they're hopeful about this country, but they're not willing to invest, I ask them all these questions you know, they say Lebanon doesn't need external enemies, because Lebanon… their worst enemy is the Lebanese…

SAAD HARIRI: Absolutely, I totally agree with them. That's the main problem that we have.

HADLEY: So your greatest enemy is yourselves?

SAAD HARIRI: Yes, absolutely, and sometimes it hurts me when I see other people talking about Lebanon from different nationalities, and how much they love Lebanon and how much they you know cherish Lebanon and I see what we do in our own country. You know, Lebanese have been through civil war, through Syrian regime occupying Lebanon, the assassination of my father, and I think truly in the past 3 years, is the only time we have been running the country by ourselves, figuring things out by ourselves. I truly believe the past month and a half, especially when we were following S&P and Fitch and we were working really hard not to be downgraded with Fitch and S&P, we focused more on S&P than Fitch, why because we are really are confident that these reforms are going to be made because people realize today more than ever that we cannot continue the same way.

HADLEY: What would you say to private investors? Who say we like you but we don't buy your numbers but we don't think the peg will help, we think it's working against you and frankly, when it comes to corruption, we just don't buy it

SAAD HARIRI: I think, you know, investors need to see real steps taken

HADLEY: And they're going to see that? How soon?

SAAD HARIRI: Soon, this is why I am saying, meeting yesterday, yesterday was extremely important. We will present the budget next week to the government and we will start working from 2-3 weeks and send that budget to the parliament and in that budget, there will be a lot of reforms, and a lot of laws that follow these reforms. S&P gave us six months, right, and we are going to use this six month to pass every single reform in Lebanon. I ask investors to sit and watch us. You will see, like the S&P gave us this chance, give us this chance. I am confident we will reach those numbers.

HADLEY: You were just in Washington, you had a series of meetings, Secretary Pompeo and his wife paid you a visit at your home? What were some of the agreements you walked away with, what did you achieve out of those meetings?

SAAD HARIRI: Look when I travel, I always, try to represent Lebanon's story. Lebanon is a country, one of smallest in the world, 18 professions, 1.5 refugees, population of 4.5 million, you know when I watch TV sometimes, and I watch Europeans are fed up (of) refugees or the US is building a wall and look at myself and my country and I laugh we are receiving 1.5 million and I laugh and I say, we receive 1.5 million and you are reacting like this. I truly believe in that sense people have lost their humanity. And I think these are people, these are babies and children, people who ran from war. And use them for populist movements and I truly believe this is something that this is something; we are going back in history.

HADLEY: And the President says build a wall?

SAAD HARIRI: Ok, this is their policy. What I am saying is what I think, what I see is myself, when I say, 1.5 million refugees in my country and I want them to leave yesterday, I don't want them to stay. But Lebanon is suffering all of this – and yet we are going to make these reforms and we are going to reach them. The biggest problem that I have is the region, and the global economy that is slowing down and everybody is saying, on your channel also, is that there is a recession that is going to come, which doesn't help also, but I truly believe that we are gonna make all right steps.

HADLEY: Many would say that the President is to blame for this potential recession

SAAD HARIRI: Well, everybody wants to blame everybody, I think the President is doing what he thinks is best for his country and that is what he thinks, am not here to blame him or not blame him and the consequences of things boils down to something…

HADLEY: And you're worried it's going to hit Lebanon

SAAD HARIRI: I think you know that people should realize that Lebanon is part of this world and we are doing what we can do and that's why we and always take into consideration and I keep tell you all the international institutions you come and you give me all of these solutions, and they are beautiful, but give me a solution for the 1.5 million refugees – nobody says anything. How do you manage a country with 1.5 million refugees, you are doing a public service for the international community because if I were to be, you know, a populist I would say well here is the sea, go to Europe, go to there, and I wouldn't have this problem that I have today but we are not like this. What I am trying to say is that everybody gives you a solution, and in the end, we have a consensus today in this country on a lot of those reforms and we can move forward on them.

HADLEY: So the United States has put Lebanon's financial health and the financial sector in the crosshairs, by targeting banks that they say is running Hezbollah money, doesn't that make your job difficult?

SAAD HARIRI: It does make my job difficult but also, uh, Americans have been very clear about this but if a bank plays in those waters they should expect the consequences of those actions. You cannot use a financial system that you know not only American, I mean I think that Europe has the same rules, everybody has the same rules, when it comes to Hezbollah money or to money laundering or to whatever it is it's there. If a bank misuses this trust, we don't like it, definitely, we try to stop it, I try to stop it, I try to delay it… But rules are rules and they had to take this action and I don't like it and I wish this bank didn't go through what they did.

HADLEY: In terms of what happens next, you've gotta find partners, talked about international partners to help the Lebanese economy get back on its feet. There are big questions in the mind of investors I've been speaking to, particularly about Hezbollah, who seem to be operating autonomously from your government, yet your government will pay the price for their actions. How do you respond to that?

SAAD HARIRI: Look, Hezbollah is not a Lebanese problem – only – it is a regional problem. Israel wants to have, you know, this scenario that Lebanon is responsible with what Netanyahu says and you want to buy it, buy it. But he knows and the international community knows that this is not true. We do not agree with these actions. I do not agree with Hezbollah with these actions.

HADLEY: But can you stop it?

SAAD HARIRI: But at the same time I am a pragmatic person, and I know my limits and I know the limits of this region. If people were serious about this issue, they would have done things 10, 15, 20, 30 years now maybe they started to do something – now maybe they started to do some things, it isn't my problem that Hezbollah became this strong, it isn't my fault that Hezbollah became this strong, but to tell me Hezbollah is running the government, no, Hezbollah is not running the government. Sorry, we are running the government, I am running the government, President Aoun is running the government as President, Nabih Berri as speaker of the house, they are a political party, they have their sides in the government and their sides in the parliament, they do not run the country but what they control is maybe a flare or a war that might happen for regional reasons that we have no say in it in Lebanon, and this is that big quarrel between us and them, and this is where I tell you I mean, my logic is what do I do as a Prime Minister, do I sit and fight Hezbollah day and night on this issue, or do I make all these reforms that I need for this country, to strengthen my institutions, strengthen my LAF (Lebanese Armed Forces), my ISF (Internal Security Forces), my central bank all my security forces, make a strong central government, also at the same time the President has decided to open a strategic dialogue how to defend Lebanon from any intrusion, or wars, and we sit at the table and discuss things calmly, this is an issue that will take time, people will say, oh well this dialogue will not to lead to anything, maybe in the beginning it will not lead to anything but I can assure you in the end it will lead to something.

HADLEY: Prime Minister, investors are funny when it comes to risk, some risks are worth taking, is Lebanon a risk worth taking?

SAAD HARIRI: Definitely, because we have in our DNA entrepreneurship, the Lebanese, wherever you find them, you travel the world, you will find Lebanese in London, France, Australia, Asia, they do well. We have this entrepreneurship in ourselves, we have this new startups, you know, 1,500 intelligent men and women who are doing an amazing job for technology, we have so much potential, all we need to do is do the reforms we need to do, renew our laws, prepare the platform for the tech sector.

HADLEY: One member of the Lebanese community who has done extremely well globally, we speak to him often on CNBC and has been a great friend to Lebanon, finds himself in a world of trouble and a world of pain right now. What is your commitment to him?

SAAD HARIRI: We are following the case, I talk to his family, they have lawyers, they are taking care of this. And anything they need from us, we will do, I think this is a legal case in Japan. The Lebanese government cannot do much about it, we can give support to the family, we can talk to the Japanese government but at the end of the day this is a Japanese issue that you know, his lawyers are dealing with. We support him, we hope that he gets out as soon as possible

HADLEY: Are you concerned by the way that this case has gone? Quite irregular?

SAAD HARIRI: Yeah, it is, but you know, as Prime Minister of Lebanon, I will rest to say, I will sit and watch and see where it goes.

HADLEY: Finally, sir, your late father was very well known within the business community as being someone whose word was his bond and to trust him on something, investors knew that he was going to get it done. How would respond to those who say the son isn't the father?

SAAD HARIRI: Of course the son is not the father. My father was someone who achieved a lot in his life, he was nothing he became a billionaire, he worked very hard, you know, my circumstances are different, I had this father who was there for me and then all of a sudden he was not. He was assassinated. What is expected of me is to be like him, I try, very hard, I don't, I never say that I am like him, I try to go by his legacy, and to drive issues in the country by how he used to think, and his ideology, my father's ideology was in order to get things done you need to make alliances in this country.

HADLEY: You gotta work together…

SAAD HARIRI: What I did is the same thing, in the past he worked with Hezbollah, even the Syrian regime was in this country, and he worked. The difference was when he got assassinated, the country got divided. That was the biggest problem. How do you break this division? In 2017 we broke this division and now we are progressing towards a better Lebanon.

HADLEY: How do you think he would feel about the situation today?

SAAD HARIRI: If he were here and he sees the region like this he would be very disappointed. Because you know, you work like this in 2005, before assassination, we don't have civil wars, it's a totally different, alliances are different, tensions are so high. This is due to unsolved problems and we are not sitting at the table and solving them among each other.

HADLEY: Any more pessimistic or optimist?

SAAD HARIRI: Optimistic

HADLEY: In spite of everything that you've just said…

SAAD HARIRI: No, I think that you know the region is going through a tough time, yes, but I think this tension is at its peak, and as of now you'll start seeing it settle, I hope.

HADLEY: Prime Minister, thank you so much for joining CNBC.


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