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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

IMF Ready to Finance Lebanon after Implementing Reforms


Mon 10 Aug 2020 | 05:34 AM
Taarek Refaat

The International Monetary Fund (IMF) said that it is ready to redouble its efforts to help Lebanon after the devastating Beirut explosion, yet the country's institutions need to show willingness to implement reforms.

The IMF's managing director, Kristalina Georgieva laid out reforms expected from the lebanese government, including steps to restore public solvency and the integrity of the financial system, as well as temporary guarantees to avoid continuous capital outflows.

This came during Georgieva's statement to an emergency donor conference for Lebanon.

We are ready to redouble our efforts. But we need unity of purpose in Lebanon - we need all institutions to unite determined to implement much-needed reforms, ”Georgieva said.

Even before the Beirut explosion, the financial crisis prompted Lebanon to enter negotiations with the International Monetary Fund in May after it defaulted on its foreign currency debt, yet, these talks stalled in the absence of reforms.

"Commitment to these reforms will unlock billions of dollars for the benefit of the Lebanese people. This is the moment when the country's political decision-makers act decisively. We are ready to help," IMF's managing director added.

"Lebanon should also take steps to reduce protracted losses in many of the state-owned firms and expand the social protection program to protect the country's most vulnerable people," Georgieva stressed.

IMF to release millions of dollars once Lebanon approves reforms

In October, Lebanon's financial crisis reached its peak as capital flows slowed and protests erupted over corruption and lack of governance.

The French presidency said that the donors’ conference on Sunday raised pledges worth about € 253 million euros for immediate humanitarian relief after the explosion, adding that those commitments would not be conditional on political or institutional reform. Meantime, long-term support based on the changes has been pledged by the authorities.

It is noteworthy that the Beirut explosion  killed 158 people, injured more than 5 thousand others and devastated large swaths of Beirut on Tuesday.

The explosion in the Lebanese capital is likely to cause between $10-$15 billion of economic losses, according to officials.