Government economic plan
still needs two more months
Falling oil prices and
Corona will limit foreign aid
Work by the government during the shutdown is ongoing towards arriving at a comprehensive economic plan, according to Raoul Nehme, the Minister of Economy and Trade. He said that the plan needs another two months before it is ready.
“We are working on a financial model that will simulate the overall effect of proposed measures such as tax hikes,” he said. The World Bank has been enlisted to help build that financial model.
“Before we have such a plan, we cannot accurately estimate what cash infusion is needed from foreign donors,” he said. “Some people have suggested $20 billion, $25 billion, or $50 billion. The number can only be determined once we have an overall plan,” Nehme said. “We cannot go to the IMF, Arab countries, and other donors without a plan,” he said.
Nehme said that the plan will show how the State intends to boost revenues and cut the deficit to zero. An outline may be ready in two to three weeks.
Nehme said that the global financial impact of the Coronavirus pandemic will significantly reduce resources to help Lebanon from countries and organizations that have in the past contributed to the country’s financial aid.
“I am certain that these countries, especially Arab countries, will not turn us down once they see that we have committed to a serious reform plan,” he said.
“We will certainly seek the support of our friends in the Arab world but their revenues are going down drastically with the price of oil falling, so practically that puts limitations on their capacity to assist us, except for the potential to access IMF funds, which would not be affected,” Nehme said. “IMF aid should be considered as an option alongside others,” he said.
Date Posted: Mar 18, 2020