IMF Warns Lebanon Still Facing Enormous Challenges

FILE - Protesters throw glass bottles at the Lebanese Central Bank building as they stand next to burning tires they set on fire in Beirut, Lebanon, Friday, March 24, 2023. (AP Photo/Hassan Ammar, File)
FILE - Protesters throw glass bottles at the Lebanese Central Bank building as they stand next to burning tires they set on fire in Beirut, Lebanon, Friday, March 24, 2023. (AP Photo/Hassan Ammar, File)
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IMF Warns Lebanon Still Facing Enormous Challenges

FILE - Protesters throw glass bottles at the Lebanese Central Bank building as they stand next to burning tires they set on fire in Beirut, Lebanon, Friday, March 24, 2023. (AP Photo/Hassan Ammar, File)
FILE - Protesters throw glass bottles at the Lebanese Central Bank building as they stand next to burning tires they set on fire in Beirut, Lebanon, Friday, March 24, 2023. (AP Photo/Hassan Ammar, File)

Four years after Lebanon’s historic meltdown began, the country is still facing “enormous economic challenges,” with a collapsed banking sector, eroding public services, deteriorating infrastructure and worsening poverty, the International Monetary Fund warned Friday.

In a statement issued at the end of a four-day visit by an IMF delegation to the crisis-hit country, the international agency welcomed recent policy decisions by the central bank to stop lending to the state and end the work in an exchange platform known as Sayrafa.

Sayrafa had helped control the spiraling black market that has controlled the Lebanese economy, but it has been depleting the country's foreign currency reserves.

The IMF said that despite the move, a permanent solution requires comprehensive policy decisions from parliament and the government to contain the external and fiscal deficits and start the restructuring of the banking sector and major state-owned companies.

In late August, interim central bank governor Wassim Mansouri called on Lebanon's ruling class to quickly implement economic and financial reforms, warning that the central bank won’t offer loans to the state and doesn't plan on printing money to cover the huge budget deficit to avoid worsening inflation.

Lebanon started talks with the IMF in 2020 to try reach an approved bailout, but since reaching a preliminary agreement with the IMF last year, the country's leaders have been reluctant to implement needed reforms.

“Lebanon has not undertaken the urgently needed reforms, and this will weigh on the economy for years to come,” the IMF statement said. It added that the lack of political will to “make difficult, yet critical, decisions” to launch reforms leaves Lebanon with an impaired banking sector, inadequate public services, deteriorating infrastructure and worsening poverty and unemployment conditions.

It said that although a seasonal uptick in tourism has increased foreign currency inflows over the summer months, receipts from tourism and remittances fall far short of what is needed to offset a large trade deficit and a lack of external financing.



Yemen Minister: We Aim to Invest in Lithium Reserves for Renewable Energy

Yemeni Oil and Minerals Minister Saeed Al-Shammasi
Yemeni Oil and Minerals Minister Saeed Al-Shammasi
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Yemen Minister: We Aim to Invest in Lithium Reserves for Renewable Energy

Yemeni Oil and Minerals Minister Saeed Al-Shammasi
Yemeni Oil and Minerals Minister Saeed Al-Shammasi

Yemen has reserves of lithium, a key mineral for battery and electric vehicle production, according to preliminary studies, Oil and Minerals Minister Saeed Al-Shammasi said.

The findings underscore the urgent need for investment and infrastructure development.

Speaking to Asharq Al-Awsat on the sidelines of the Fourth International Ministerial Meeting at the International Mining Conference in Riyadh on Tuesday, Al-Shammasi revealed that the initial studies identified lithium reserves, a critical component in the production of batteries and solar panels.

“We also have copper reserves, but they require significant investment and infrastructure development,” he added.

Al-Shammasi said he met with Saudi Industry and Mineral Resources Minister Bandar Alkhorayef to explore collaboration opportunities with investors in the Kingdom.

He also announced a forthcoming meeting with the head of Saudi Arabia’s Chamber of Commerce and Industry to discuss joint projects.

“Recently, a Saudi-Yemeni Business Council was established to support the creation of joint ventures across various sectors,” he noted.

Al-Shammasi also highlighted the importance of the event, which builds on discussions from its previous edition. He said three new initiatives were introduced, focusing on investment in critical minerals essential for energy industries.

“These minerals will play a major role in the global energy landscape over the next 50 years, as countries seek to reduce dependence on oil,” Al-Shammasi said, emphasizing the need for investments and supportive legislation from resource-rich nations.

He stressed the importance of advanced technologies in modern mining and praised Saudi Arabia’s efforts, including the establishment of new research centers in the field.

Al-Shammasi further noted that the mining industry is helping reduce environmental pollution by leveraging alternative energy sources and critical minerals, aligning with the global shift away from traditional raw materials in sectors such as battery production and electric vehicles.