IMF Just Warned Lebanese Officials Against Distorting Lebanon’s Losses

IMF Warns Lebanese Officials Against Distorting Lebanon's Losses
iProfessional

The International Monetary Fund (IMF) urged Lebanese authorities to “unite around the government plan,” warning that attempts to lower losses from the financial crisis could only delay recovery, Reuters reported.

“From our side, we are ready to work together with the authorities to improve the plan where this is necessary,” issued Athanasios Arvanitis, deputy director of the IMF’s Middle East and Central Asia Department, in an online press conference Monday.

The Lebanese government’s rescue plan has been the center of Lebanon’s ongoing talks with the IMF, from which the country hopes to secure billions of dollars in aid amid a devastating economic meltdown.

However, the disagreement on the scale of Lebanon’s financial losses on the Lebanese side has been a significant obstacle for these talks, and so has the apparent lack of political commitment to implementing the required reforms.

While the government estimated the losses at approximately 241 trillion Lebanese pounds ($69 billion at 3,500 LBP/USD), a parliamentary committee presented much lower figures, using the official exchange rate of 1,507 LBP/USD.

On the other hand, Alain Bifani, the resigned director-general of the Ministry of Finance, said that the correct estimate was $61 billion.

Notably, Bifani recently revealed that bankers had smuggled around $6 billion out of Lebanon since October 2019.

The IMF’s Arvanitis voiced concern regarding “the attempts to present lower losses and postpone difficult measures into the future,” which he said, “would only increase the cost of the crisis by delaying the recovery.”

After Lebanon’s talks with the IMF reportedly came to a temporary pause pending the agreement on the losses and the start of the economic reforms, the IMF recently resumed the negotiations, giving the country its last chance to resolve its position.

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