Monday, September 28, 2020

IMF urges Lebanon to break reform ‘impasse’

International Business

FILE PHOTO: The logo of the International Monetary Fund (IMF), is seen during a news conference in Santiago, Chile, July 23, 2019. REUTERS/Rodrigo Garrido

BEIRUT: The International Monetary Fund urged Lebanese officials to break an “impasse” and move ahead with reforms after a massive Beirut blast devastated the capital and cost the crisis-hit country billions in damages.

“It is essential to overcome the impasse in the discussions on critical reforms,” said the world body, which has been in talks with the Lebanese government since May over the country’s financial crisis.

The talks have since hit a wall, with the IMF urging authorities “to put in place a meaningful programme to turn around the economy” following last week’s explosion, which it called a “disaster.”

The blast killed more than a 150 people, wounded at least 5,000 others, and left 300,000 homeless, with damage costs estimated to exceed $3bn.

It came as the country was already knee-deep in its worst economic crisis since the 1975-1990 civil war, with runaway inflation and bank capital controls fuelling poverty, despair and angry street protests.

After Lebanon defaulted on its sovereign debt for the first time in March, the government pledged reforms, and in May started talks with the IMF towards unlocking billions of dollars in aid.

Lebanon is seeking more than $20bn in external funding, including an $11bn aid package pledged during a Paris conference in April 2018.

After 17 meetings, negotiations with the IMF have been on hold since July, as Lebanese officials failed to agree on reform measures or the scale of the country’s financial losses.

Deadlock is common in multi-confessional Lebanon, where politicians have for decades been accused of cronyism, conflict of interest and corruption.