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Lebanon Cautiously Awaits IMF Mission

Lebanon Cautiously Awaits IMF Mission

Wednesday, 19 February, 2020 - 09:00
A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo

An International Monetary Fund mission will kick off its meetings in Beirut on Thursday, at the invitation of the Lebanese government, to provide technical advice on how to address the economic, monetary, and financial crisis.

The government and financial authorities are struggling to find a way to handle the next sovereign debt maturity, a $1.2 billion Eurobond due on March 9.

The country has formally requested that the IMF send a technical delegation to help draw up a comprehensive economic, monetary, and financial plan to rescue it from an imminent “implosion”, as described by the World Bank.

In this regard, MP Nicolas Nahas told Asharq Al-Awsat that Lebanon was preparing a program to recover from the crisis, adding that it has resorted to the IMF for this particular reason, “as other countries did when they were faced with a similar situation.”

“Such assistance is among the [IMF] primary tasks,” he emphasized.

Economist Jean Tawileh, for his part, noted that IMF “had clarified two days ago that it was not entitled to give advice to the Lebanese state on whether or not to pay the Eurobonds maturing in March.”

“The technical support that the IMF team will provide to Lebanon will include an integrated plan on the means to implement reforms to get out of the current situation,” he remarked.

“Financial support comes at an advanced stage, as technical assistance can turn into financial assistance, but that depends on how the Lebanese state deals with the plan and reforms,” Tawileh added.

The delegation’s visit comes amid great controversy, as opponents find that the fund’s assistance would entail painful procedures for a large section of the Lebanese, especially if such technical advice would set the stage for financial support, and thus new debts and loans. Proponents, on the other hand, say that resorting to the IMF could constitute a “salvation” from the current crisis.

In this context, Economic Expert Mohamed Zbib noted that although “the Fund’s mission has nothing to do with the Eurobonds maturity, perhaps the aim is to use it as an excuse to pass the payment of these dues, and to take new austerity measures and deflationary policies.”

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