Correction should not lie
with the poor and the middle class
A spokesperson of the International Monetary Fund (IMF) said that discussions with the Lebanese authorities have been constructive and have so far focused on a better understanding of the government’s reform plan and its implications.
Excerpts from the IMF statement:
As we mentioned before, the challenges facing Lebanon are highly complex and interrelated, and addressing them will require preparing the correct diagnosis, undertaking comprehensive reforms, and persevering in implementation. This calls for building on the strength of the government's sense of ownership of and support for its economic program at both ends of the political spectrum and civil society in Lebanon.
We expect discussions and negotiations to be lengthy due to the complexity of the issues and the necessary reforms. We have held several rounds of technical meetings with senior officials to deepen our understanding of estimates of losses arising from assumptions of restructuring public debt, currency exchange rate cuts, and other factors, as indicated in the government plan. These discussions helped us to understand many specific technical issues better.
However, the primary view of the experts at the IMF indicates that the estimates of losses shown in the reform plan generally represent the correct approximate size, given the assumptions presented. However, more technical work will need to be initiated in the next phase to revise these estimates, especially in light of the implementation of specific reforms.
There is much scope for enhancing the degree of transparency and accountability in economic policies and public sector entities in Lebanon. This will be a critical requirement in order to restore confidence and ensure that sectors that achieve losses are reformed and contribute to strengthening economic performance in the coming years.
We are currently in discussions with the Lebanese authorities on how to implement the economic reform plan that have to be developed in a manner that ensures that the burden of correction does not lie with the poor and the middle class, with success in implementing the proposed financial correction strategy.
Date Posted: Jun 05, 2020