Without the support of the IMF, Lebanon will plunge-t-he in “hell”?

Sans aide du FMI, le Liban plongera-t-il en «enfer»?

BEIRUT | Lebanon will plunge-t-he in “hell” without a assistance of several billion dollars to the IMF? The negotiations are at a standstill, in the absence of implementation by the government of reforms that seem inevitable to stop the economic collapse of the country.

The small countries of the Near East is experiencing the worst economic crisis in its history, aggravated by the global pandemic of Covid-19 and a context of political sensitivity, exacerbated by the tensions between the movement of the Hezbollah, an ally of Iran, which dominates the political life of lebanon, and the United States.

In recent months, tens of thousands of Lebanese have been laid off or suffered wage cuts. The national currency is in free fall, even as the purchasing power. And investors do not have free access to their money, the banks have imposed draconian restrictions on withdrawals and transfers abroad because of the scarcity of the dollar.

In default of payment, Lebanon has adopted the end of April a plan of measures to negotiate aid from the international monetary Fund (IMF), which is likely to give a bit of confidence to other donors.

But, after more than two months and 16 sessions of negotiations between the institution based in Washington and the lebanese government, the talks are stalling.

“The IMF has left the session of the negotiations”, said a negotiator for the lebanese under the guise of anonymity.

Another source lebanese close to the folder castigates the louvoiements of lebanese officials. “Person (of them) does not want reforms,” claimed yet for decades. “Each faction fights for its own interests and let the country sink.”

The neglect is not surprising, in a country subscribed to recurring attacks, who is torn between a variety of foreign influences, and where the parties are accustomed to haggling endless.

Lebanese leaders themselves are accused of enjoy a system plagued by cronyism and bribes.

“Burn the country”

There is a “lobby very powerful,” ready “to burn the country to avoid being exposed everything that he has done”, accuses the negotiator.

The time is serious, yet. Nearly half of the approximately four million Lebanese live in poverty and 35 % of the active population is unemployed.

The ras-le-bol was triggered in October 2019 a protest movement unprecedented against the political class which has remained unchanged since decades.

To this day, Beirut hopes about $ 10 billion IMF aid.

But during the negotiations, a parliamentary committee and the government have even diverged on the estimation of public deficits, those of the central Bank and those banks: from 60 000 to 241 000 billion lebanese pounds (or tens of mds USD). The IMF has called for a single assessment.

The last session “is poorly placed,” says a western source informed of the negotiations. The IMF has requested “that we stop the lead boat”.

Blow on blow, with two senior government officials involved in the negotiations have resigned.

The next session, purely technical, needs to address the difficult issue of the electricity sector — a financial abyss.

“Damn it!”

“Nothing moves” alarmed ” this week, the head of French diplomacy, Jean-Yves Le Drian, announcing a forthcoming visit to Beirut. “Help us to help you, damn it!”

His american counterpart Mike Pompeo has said that his country “supported the Lebanon as long as it leads to good reform, and that it is not under the thumb of Iran.”

Among the expected reforms: reducing public spending and increasing revenues through the collection of taxes and the fight against smuggling.

But “there is no political will,” insisted the analyst Nasser Yassine. Any change would deprive politicians of their power, their hand-low on the State, the economy and society.”

The IMF expects an audit of the accounts of the central Bank and the regulation of capital controls, informal. It calls for a float of the national currency, to eliminate the chasm between the official exchange rate (1,507 pounds for a dollar) and a black market where the dollar is exchanged at 9,000 pounds.

A failure of negotiations with the IMF would impede in addition to the release of 11 billion dollars in aid promised in 2018 at a conference in Paris.

For the western source, there could be no alternative to negotiations with the IMF. “The country collapses. It must be the label of the IMF to get you back on the rails of good repute”.

Same observation for the source lebanese close to the folder.

“With an exchange rate that hand spin and nothing” keeps”, and “without the IMF, Lebanon is heading for hell”.

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