TUE 11 - 8 - 2020
 
Date: Jul 11, 2020
Source: The Daily Star
Lebanon's last chance to secure IMF loan
Lebanon 'spiraling out of control': UN rights chief
BEIRUT: Lebanon faces its last chance to secure a loan from the International Monetary Fund and the international lender will not wait long for leaders to enact reforms, Al-Joumhouria reported Saturday.

“The way the Lebanese side deals with negotiations with the IMF will not speed up reaching an agreement ... in this way the negotiations will take years, not several months,” sources following up on the negotiations told the newspaper.

“The Lebanese side should consider that it is facing the last chance to resolve the situation and adopt a scientific and accurate approach ... otherwise the fund will have no choice but to suspend negotiations if not stop them,” the sources said.

They warned that the IMF will not waste time in meetings “that take place in a vicious circle,” and that Lebanon must submit a unified number of losses in order to move forward.

Lebanon is struggling under a financial crisis seen as the biggest threat to its stability since the 1975-90 Civil War. The country is banking on receiving a $10 billion bailout from the IMF as part of a package of reforms designed to save the country from financial collapse.

Negotiations with the IMF, which began in May, have been bogged down by a disagreement between the government and the Central Bank over the scale of losses in the financial sector.

Central Bank Gov. Riad Salameh accused the government with over-calculating the losses in its economic recovery plan, which has been presented to the IMF as the basis of negotiations.


Lebanon 'spiraling out of control': UN rights chief
BEIRUT: The UN’s senior human rights chief warned Friday that Lebanon’s crisis risked becoming uncontrollable and had already driven thousands into a life of hunger and poverty.

In statement the UN High Commissioner for Human Rights Michelle Bachelet said, “This situation is fast spiraling out of control, with many already destitute and facing starvation as a direct result of this crisis."

Bachelet said the crisis had affected people across society but warned that it was hurting those who had been struggling prior to the economic woes of the last year.

"And as is so often the case in such situations, it is the poorest and most vulnerable who suffer the most.” She said.

With businesses having closed across the country and unemployment rising, Bachelet blamed Lebanon’s social safety net for the immediacy of the economic hardship in Lebanon. "In a country with no unemployment benefits and fragile social security nets, an unemployment crisis has grave implications not only for the economy but for the very social fabric of the country," she said.

Bachelet called for aid to be offered regardless of individuals’ background, referencing migrant workers and refugees.

Concluding the statement, she called for government intervention, saying, "Without strengthened social safety nets and bolstered basic assistance to ease the pain caused by required structural reform, vulnerable Lebanese, migrant workers and refugees will be pushed further into poverty and extreme poverty," she said. "The alarm has been sounded, and we must respond immediately before it is too late."

Hariri: Aoun mulling economic system change

Hussein Dakroub| The Daily Star
BEIRUT: Former Prime Minister Saad Hariri Thursday accused President Michel Aoun and the government of contemplating a change in the country’s free economic system in favor of another system, in the latest diatribe against the ruling class.

Hariri also stressed that implementation of real reforms was essential to curb the dramatic collapse of the Lebanese pound against the US dollar on the black market.

Lebanon, which is facing an economic meltdown, has seen its national currency lose 80 percent of its value on the black market since last October. The rapid devaluation of the pound has dramatically reduced the purchasing power of most Lebanese, and has put more than half of its 5 million population under the poverty line.

"Lebanon is going through its worst economic situation in history. This government and this [Aoun’s] presidency are contemplating a change of Lebanon’s free economic system to another system,” Hariri told reporters after a meeting with Maronite Patriarch Beshara Raid at the latter’s seat in Bkirki, north of Beirut.

“Some say ‘No we don’t want to change the system’ but all the actions and comments that we see in the media regarding the economy aim to change the free economic system. They accuse us of building a rentier economy. Tourism was at its peak in Lebanon in 2005 before the martyrdom of [former premier] Rafik Hariri and until 2010 and when tourism is fine, agriculture, industry and airport are fine,” he added, according to a statement released by his media office.

In a quick response to Hariri, Prime Minister Hassan Diab denied that the government planned to change the free economic system. “The government has no intention to change the free economic system, but the problem is in understanding the concept of this free economic system as to whether the free economic chaos, or probably the free waste system that is prevailing in the country,” Information Minister Manal Abdel-Samad quoted Diab as saying during a Cabinet session he chaired at the Grand Serail.

Hariri reiterated his call on Diab’s 20-member Cabinet to carry out real reforms in order to prop up the collapsing pound and encourage the international community to come forward with promised financial aid to the crisis-hit and cash-strapped country.

“If we want to control the Lebanese pound, there must be real reform steps in order for the international community to see that Lebanon is taking real steps,” Hariri said. “The longer we delay that, the more the presidency and the state delay that, the more harmful it will be to Lebanon, and this affects the exchange rate of the pound.”

“Lebanon needs a government that makes decisions quickly in the first two or three months of its life, and some of these decisions will be difficult, but we must take them and make reforms,” he added.

Despite the gloomy outlook prevailing in the country at the political, socio-economic and financial levels, Hariri sought to reassure the Lebanese that there is hope for overcoming the current crisis.

“I tell the Lebanese: Don’t say there is no hope. Hope should always be there and solutions exist. We all know what stops the solutions today, and how we can achieve these solutions,” Hariri said. “There is a political challenge in the country between changing the Lebanese system and reforming this liberal system so that it can follow the right path. Some want to change the system as we heard in the speeches. In short, there is a project to nationalize the country and merge the banks into two or three banks, so that the country becomes similar to regional economies that are favored by some, such as the Iranian economy. Some wonder: What is wrong with the Iranian economy?” He was apparently alluding to Hezbollah leader Sayyed Hasan Nasrallah’s latest speech in which he praised the Iranian economic system.

Hariri decried that the Cabinet’s appointment Tuesday of a new board of directors to the state-run Eletricite du Liban, a key demand of international donors, and the government’s approval last month of a string of long-delayed key administrative and financial appointments, fell short of the required reforms because they were not based on a mechanism that called for choosing candidates on the basis of competency and experience.

“We all witnessed appointments taking place without a mechanism, and this mechanism was sent back to Parliament because [Aoun’s] mandate rejected it, knowing that it allows to appoint experts. We want to appoint experts. Judicial appointments did not take place, and the amendment to the Electricity Regulatory Authority law and all these matters do not serve Lebanon’s interest in reform,” he said.

A day after Aoun asked the Constitutional Council to repeal a recently passed law that creates a competency-based mechanism for appointing senior civil servants, the council said it has suspended the law until it decided on the request.

Hariri underlined the need to maintain security and political stability in Lebanon which, he said, was paying the price of regional conflicts. “The most important thing is political, security and regional stability. Lebanon today is paying regional prices that it should not pay, and this is the main problem. Our youth are leaving the country, unemployment is increasing, and all this is because of instability,” he said.

Hariri weighed in on the raging controversy over the Cabinet’s demand for a forensic audit of the Central Bank’s accounts, saying that all the ministries in previous governments should be audited. He also called for an investigation of the electricity portfolio.

“I want to talk about the forensic investigation. They want to put the entire blame on the Central Bank and on the banks, while it is the state that borrowed $90 billion. What is better for us to investigate: Who spent the $90 billion or who gave the $90 billion? Whoever gave this amount was obliged to give it because the state requested it to spend it,” Hariri said.

He added that the Future Movement’s parliamentary bloc had previously presented two laws in 2006 and 2008 to have a financial audit of the state since the 1989 Taif Accord. “Let us do this audit on all ministries and governments because they are responsible for the spending. We should also conduct this audit in the electricity sector. Don't the $46 billion spent on electricity need to be audited?”

The Future and other parliamentary blocs have blamed the Free Patriotic Movement, which is headed by MP Gebran Bassil and has held the Energy Ministry for more than 10 years, for the waste in the decrepit electricity sector, which bleeds $2 billion annually from the state Treasury.

In reply to a question, Hariri said he hoped that French Foreign Minister Jean-Yves Le Drian would carry with him a French initiative when he visits Lebanon.

“I hope so. France has always been a friend of Lebanon, and still is. It looks at this Lebanese crisis in light of what its foreign minister said, that the Lebanese should help themselves and try to reform,” he said.

Le Drian expressed deep concerns for Lebanon’s situation, calling on the government to implement long overdue reforms as the country battles its worst economic crisis in decades. “We are ready to help you, but help us to help you,” he said during the French Parliament’s Foreign Affairs Committee meeting Wednesday.


 
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