Lebanon Rescue Talks With IMF Hit Rocks
BEIRUT (Dispatches) – As accelerating poverty fuels anger, despair and fear of a social explosion, efforts by Lebanon’s ruling elite to salvage the country from a financial meltdown with IMF help seem to be going in reverse.
A country known across the Middle East for its glamorous lifestyle and commercial savoir faire now projects images of people begging on the streets, scavenging in the garbage for something to eat or trading furniture for food.
Several current and former Lebanese officials, diplomats, international officials, economists and analysts agreed that talks with the IMF to rescue Lebanon from an economic crisis are going nowhere. Meanwhile, time is running out.
"This (IMF talks) is hitting the rocks” says Nasser Saidi, a former economy minister and central banker.
Two members of Lebanon’s negotiating team have quit in a month, both over what they described as attempts to massage huge financial losses set out in the government plan.
"They are not negotiating a (IMF) program”, says one senior source privy to the talks. "There’s no (Lebanese) consensus on the diagnosis so what can they possibly negotiate?”
Lebanon, with a population of 6 million, is fast running out of dollars. The state, its revenues collapsing, is printing local currency to pay public employees – an estimated 800,000-strong state payroll padded by politicians.
France’s foreign minister expressed alarm on Wednesday over the crisis in Lebanon and said social discontent could lead to an escalation in violence.
"The situation is alarming, with an economic, financial, social and humanitarian crisis now reinforced by the risks of the coronavirus,” Jean-Yves Le Drian told a parliamentary hearing.
"The worsening social crisis ... risks increasing the risk of violence,” he said.
He said the government had to implement reforms so that the international community could help Lebanon.
The government on Tuesday raised the price of a 900-gram loaf of partially subsidized bread to 2,000 pounds from its pre-October-crisis price of 1,500 pounds.
The pound, which is officially pegged at 1,500 to the dollar, has lost over 80 percent of its value since October and is now trading at nearly 9,000 to the dollar on the black market after sharp falls in recent days.
Since October Lebanon has been in a financial crisis that has seen businesses close and prices and unemployment soar.
A country known across the Middle East for its glamorous lifestyle and commercial savoir faire now projects images of people begging on the streets, scavenging in the garbage for something to eat or trading furniture for food.
Several current and former Lebanese officials, diplomats, international officials, economists and analysts agreed that talks with the IMF to rescue Lebanon from an economic crisis are going nowhere. Meanwhile, time is running out.
"This (IMF talks) is hitting the rocks” says Nasser Saidi, a former economy minister and central banker.
Two members of Lebanon’s negotiating team have quit in a month, both over what they described as attempts to massage huge financial losses set out in the government plan.
"They are not negotiating a (IMF) program”, says one senior source privy to the talks. "There’s no (Lebanese) consensus on the diagnosis so what can they possibly negotiate?”
Lebanon, with a population of 6 million, is fast running out of dollars. The state, its revenues collapsing, is printing local currency to pay public employees – an estimated 800,000-strong state payroll padded by politicians.
France’s foreign minister expressed alarm on Wednesday over the crisis in Lebanon and said social discontent could lead to an escalation in violence.
"The situation is alarming, with an economic, financial, social and humanitarian crisis now reinforced by the risks of the coronavirus,” Jean-Yves Le Drian told a parliamentary hearing.
"The worsening social crisis ... risks increasing the risk of violence,” he said.
He said the government had to implement reforms so that the international community could help Lebanon.
The government on Tuesday raised the price of a 900-gram loaf of partially subsidized bread to 2,000 pounds from its pre-October-crisis price of 1,500 pounds.
The pound, which is officially pegged at 1,500 to the dollar, has lost over 80 percent of its value since October and is now trading at nearly 9,000 to the dollar on the black market after sharp falls in recent days.
Since October Lebanon has been in a financial crisis that has seen businesses close and prices and unemployment soar.