Explosion in Beirut: IMF demands profound reforms from Lebanon to help rebuild

08/09/2020 - 14:11

• Clarín.com
• World

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, on Sunday made the delivery of billions of dollars to Lebanon conditional on the authorities committing to carry out a series of reforms, such as restoring solvency in the public accounts.

"Commitment to these reforms will release billions of dollars for the benefit of the Lebanese people . This is the time for politicians to act decisively. We are ready to help," Georgieva said in her speech at the international donor conference for the Lebanon, which is celebrated electronically.

The event was organized by France after the explosion last Tuesday in the port of Beirut, which has caused 158 deaths and 6,000 injuries.

Anti-government protests continue in the streets of Beirut. AP

Georgieva stressed that Lebanon must first restore the solvency of its public finances and the soundness of its financial system.

"Current and future generations of Lebanese should not carry more debts than they will ever be able to pay . This is why the IMF requires debt sustainability to give loans," he said.

"And the financial system must be solvent," he added, "those who have benefited from excessive returns in the past must share the burden of bank recapitalization to protect the savings of the majority of Lebanese depositors."

Likewise, he requested that safeguards be established to prevent capital outflows while the reforms are being developed, such as the adoption of legislation to formalize controls in banks and the elimination of the current system of multiple exchange rates.

Anti-government protests continue in the streets of Beirut. AP

"Third, (take) honest steps to reduce prolonged losses in state-owned companies . There must be greater predictability, transparency and accountability with global audits at key institutions, including the central bank," he listed.

Georgieva also pointed out that a "social safety net" should be expanded to protect the most vulnerable.

The head of the IMF recalled that "Lebanon has been struggling with profound economic and social challenges, aggravated by the pandemic, but even more so by the lack of political will to adopt and implement significant reforms."

Reuters

"This is the time for Lebanese politicians to come together and address the serious economic and social crisis. It is also the time for the international community to stand alongside the country and its people, with urgent humanitarian assistance, and support for reforms to bring Lebanon from the brink of economic collapse, "Georgieva said.

He recalled that in recent months the IMF has carried out negotiations with the country's authorities on a package of reforms, which "unfortunately " have not yet yielded results.

"We are ready to redouble our efforts," he said, "but we need unity of purpose in Lebanon, we need all institutions to come together to carry out these much-needed reforms."

Source: EFE and AP