Lebanon sees progress for IMF despite further turmoil, economy minister says

The new Lebanese government aims to start full negotiations on a deal with the IMF by the end of this year or the beginning of next year, but does not expect the funds to be dispersed before the elections of March, a minister said on Friday.
In an interview with Reuters, Economy Minister Amin Salam also said that Lebanon wasted precious time in dealing with the economic crisis due to a crisis linked to the investigation into the explosion in the port of Beirut which paralyzed the cabinet.
Lebanon is suffering from one of the world’s most severe economic depressions and a deal with the IMF is widely seen as the only way it can get help.
Salam said figures crucial to moving the IMF forward – including Lebanon’s estimate of losses in its financial system – would be sent to the Fund as early as next week.
While there was no agreement yet on how the losses should be distributed, “opinions are much closer and the picture is much clearer,” he said.
He declined to give figures he said it was up to the finance ministry and central bank to provide.
But he said he did not expect the government to strike a full deal with the IMF before parliamentary elections slated for March 27, saying no money should be dispersed before the vote, after which a new cabinet would be formed.
Talks with the IMF collapsed last year because banks, central bank and ruling politicians in Lebanon could not agree with the previous government on the scale of the huge losses, estimated at the time to be about $ 90 billion, and how it should be allocated.
An IMF program is widely seen as the only way for Lebanon to unlock the aid it desperately needs.
Prime Minister Najib Mikati took office in September, promising to remedy one of the world’s most severe depressions.
His government was already facing a difficult path to pave the way for a deal with the IMF before Lebanon sank into a new crisis, this time linked to the investigation into the port explosion that sparked a new political conflict. and deadly violence in the streets.
Cabinet has not met since October 12 due to the stalemate.
Still, Salam and other officials met with the Fund this week as technical discussions began.
The message from IMF officials was “we want to focus on what went wrong in the first phase and that is to define the losses and give an idea of ​​their distribution,” he said.
The government has “high hopes” that it will be able to secure a memorandum of understanding with the IMF, including the figures and the financial recovery plan, at the end of this year or the beginning of next year to pave the way for the future. negotiations.
Lebanon hopes to get at least $ 2 billion from the IMF as part of a deal that would unlock further foreign aid, he said.
But Salam added that while the current government should undertake as many reforms as possible, sign the memorandum of understanding and prepare for IMF negotiations, “the IMF is certainly not giving money until parliamentary elections.”
The crisis over the port explosion investigation escalated as Hezbollah and its ally Amal insisted on their demand to dismiss the lead investigator, whom they accuse of bias.
The dispute derailed the last cabinet session.
Mikati has suspended the convening of cabinet sessions pending the outcome of political contacts on the issue, after postponing a session last week over fears the feud could escalate.
“Without a doubt, the security events and circumstances surrounding the port and the investigation and Judge Bitar delayed us by two weeks,” Salam said.
“Every day that passes is precious,” he said. “We hope to be back on time by next week.”

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