IMF warns Lebanon at 'very dangerous moment'

W460

Crisis-hit Lebanon is "at a very dangerous moment", a visiting delegation of the International Monetary Fund said on Thursday, criticizing slow progress on reforms needed to unlock billions in loans.

Lebanon and the IMF reached a conditional agreement in April 2022 on a $3-billion-dollar loan needed to save its economy, which has been in free fall since 2019.

But nearly a year after Beirut signed the agreement, officials have yet to enact the substantial changes required to kickstart the 46-month financing program.

"We think Lebanon is at a very dangerous moment, at a crossroads," said Ernesto Ramirez Rigo, who headed the IMF delegation in Beirut, warning the continued "policy of inaction is going to leave Lebanon in a never-ending crisis".

"Time has a gone by, it's almost a year since we have reached an agreement," Rigo added, urging leaders to implement the reforms swiftly.

In September the IMF had already condemned Beirut's "very slow" progress on implementing these reforms.

The lender had conditioned the funds on a series of measures, notably unifying the country's plethora of exchange rates, a reformed bank secrecy law as well as restructuring the banking sector and the implementation of formal capital controls.

As reforms drag, the market value of the Lebanese pound reached historic lows against the U.S. dollar this month.

The pound has been fluctuating at more than 100,000 against the greenback -- a dizzying plunge from 1,507 before the economic crisis hit in 2019.

SourceNaharnet
Comments 3
Missing rabiosa 23 March 2023, 17:21

Not sure why no one can see that the ruling class will simply not reform itself. They are all invested in heavily in stealing from the treasury appointing cronies to non existent government jobs. So they will not let go of free money.

Government needs to be cut down to size. Dysfunctinal state industries sold to private owners with government oversight to watch them, reduce the bureaucracy and then only then can we start to see some improvements.

As for the LLP, that's dead. he sooner you go with USD as the official currency the better.

Missing rabiosa 23 March 2023, 17:21

Not sure why no one can see that the ruling class will simply not reform itself. They are all invested in heavily in stealing from the treasury appointing cronies to non existent government jobs. So they will not let go of free money.

Government needs to be cut down to size. Dysfunctinal state industries sold to private owners with government oversight to watch them, reduce the bureaucracy and then only then can we start to see some improvements.

As for the LLP, that's dead. he sooner you go with USD as the official currency the better.

Thumb chrisrushlau 23 March 2023, 23:04

The IMF warned, "Democracy could break out at any minute."