Lebanon must show unity of purpose and carry out reforms designed to resolve its burgeoning economic and social crisis, the IMF has said.
In a statement following the catastrophic explosion at Port of Beirut last week, the fund’s managing director Kristalina Georgieva pledged to redouble efforts to build a reform package for the country but said the country’s policymakers must work together.
She outlined four reforms which the country must to commit to unlock billions of dollars of in support.
“Lebanon has been struggling with profound economic and social challenges, aggravated by a pandemic, but even more so by the shortage of political will to adopt and implement meaningful reforms the people of Lebanon have been calling for,” she said.
“This is the moment for Lebanese policymakers to unite and address the severe economic and social crisis. It is also a moment for the international community to stand by the country and its people – with urgent humanitarian assistance, and support for reforms to pull Lebanon from the brink of economic collapse.”
The first reform is that the solvency of the public finances and financial system must be restored to avoid saddling future generations of Lebanese with debts that will never be able to repay, said Georgieva. The second is to put in place temporary safeguards to avoid continued capital outflows.
The third is to reduce protracted losses in state-owned enterprises with greater transparency, predictability and accountability, with comprehensive audits of key institutions including the central bank.
Finally, a safety net must be put in place to protect the country’s most vulnerable to they do not bear the brunt of the crisis.
Intensive talks with Lebanese authorities prior to the blast had failed to yield results she said, concluding: “This is the moment for the country’s policymakers to act decisively. We stand ready to help.”
(Reporting by Imogen Lillywhite; Editing by Mily Chakrabarty)
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