The International Monetary Fund expressed its readiness to begin talks with the new Lebanese government for a new deal and agreement that would provide support for the country’s reconstruction and rejuvenation prospects.
According to numerous news sources, an IMF spokesperson told AFP that the Fund intends “to work with the president and the new government to address the significant challenges facing Lebanon’s economy. This includes discussions on a new aid program that could help restore debt sustainability.”
The country’s new finance ministry issued a statement during Minister Yassine Jaber’s meeting with IMF representative Frederico Lima that emphasized the government’s strong commitment to reaching a deal with the IMF that would drive necessary reforms and secure international support.
A Long-Awaited Deal
During the last few years, Lebanon’s talks with the IMF had reached a repeated impasse as Lebanon’s negotiation representatives disagreed with many of the Fund’s conditions for the deal.
Importantly, these conditions included a bank restructuring strategy that recognizes and addresses losses in the sector, an externally assisted bank-by-bank evaluation, the reform of the country’s bank secrecy law, the completion of an audit of the Central Bank’s foreign asset position for transparency purposes, and the implementation of a medium-term fiscal and debt restructuring strategy.
Lebanese Members of Parliament Ibrahim Kanaan and George Adwan, both of whom are affiliated to major banking and politico-financial interests in Lebanon were at the forefront of obstructing the IMF deal.
The conditions of the Fund included long-awaited and absent monitoring and accountability mechanisms in Lebanon’s non-transparent banking sector, which would impact actors potentially affiliated to Kanaan and Adwan.
Different Approach?
Today, it remains to be seen whether the Fund and the new government will undertake a different approach moving forward. This includes the conditions of the agreement, which will likely take into account the harm and destruction caused by Israeli attacks, as well as the amount of support and other details.
Among the major factors that dictate the talks between Lebanon and the IMF is the direction of new Finance Minister Yassine Jaber and the government overall.
Many had raised concerns about Jaber’s affiliation, being a previous MP affiliated with Amal, the party’s allies and the traditional ruling class.
As such, it remains to be seen whether the country’s public financial management will follow the old model, or whether the reformist agenda under which the new government ushered in its mandate will see some light in the upcoming years.