Already deep in debt, Lebanon’s financial struggles were amplified by the deadly port explosion in Beirut on August 4th.
Lebanon had already been in negotiations with the International Monetary Fund (IMF) before the blast. The process was only tedious and challenging as Lebanon’s government became accused of lacking seriousness to make the right decisions and save the country.
Following the blast, the Lebanese government resigned, opening a door to a second even a third chance with the IMF.
Speaking to reporters, IMF spokesman Gerry Rice said the Fund is “ready to engage with the new government” and “redouble its efforts” to help Lebanon – especially in the wake of the recent tragedies.
Industry sources estimate that the blast caused losses of up to $3 billion, Reuters reported in August. Lebanon estimated up to $15 billion in losses.
The striking contrast mirrors the problems that arose during negotiations with the IMF, such as Lebanon’s inability to agree on the true number of losses.
Nevertheless, the IMF was motivated by Lebanon finally launching a forensic audit of the Central Bank’s finances to assess actual losses. This was a move the IMF had been insisting on in its negotiations.
The formation of a new government has been rocky so far, but the IMF’s commitment to Lebanon could speed things up.