Lebanon's Minister of Economy Hopes for IMF Talks Progress Despite Instability
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The Lebanese Minister of Economy, Amin Salam, says opinions are "much closer" on the distribution of losses as Lebanon looks for over $2 billion in IMF funding.
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Lebanon's Central Bank
According to a Lebanese minister, Lebanon's new administration hopes to begin formal negotiations for an IMF accord by the end of this year or early next. The minister does not expect funds to be dispersed before the upcoming March elections.
In an interview with Reuters, Amin Salam, Lebanon's Minister of Economy, stated that the country has wasted valuable time dealing with the economic crisis as a result of the cabinet's paralysis over disputes regarding the investigation into the Beirut port explosion.
Lebanon is in the midst of one of the world's worst economic downturns, and an IMF deal is largely regarded by many in the country as one of the few ways available to obtain aid.
Salam stated that data critical to advance on the IMF track, such as Lebanon's assessment of financial sector losses, would be provided to the Fund as soon as next week.
No deal is expected before the upcoming March elections
"Opinions are much closer and the picture is much clearer," he said to Reuters, adding that while stating that there was no agreement on how the losses should be allocated yet. He refused to furnish data, claiming that it was up to the finance ministry and the central bank to do so.
The minister did say, however, that he did not anticipate the administration to reach a comprehensive IMF deal before the March 27 parliamentary elections, and that no money would be dispersed before the vote consequently, after which a new cabinet would be established.
Last year, IMF talks broke down because the banks, central bank, and the government in Lebanon couldn't agree with the previous administration on the magnitude of massive losses, estimated at around $90 billion at the time, and how losses should be distributed.
A difficult path ahead
The Lebanese government was already on a rocky route to preparing for an IMF settlement, which was made more difficult by rising tensions prompted by a political conflict over the investigation of the Beirut port bomb.
Still, the Minister of Economy told Reuters that the government has "high hopes" that it would be able to secure an IMF memorandum of understanding, which will include a financial recovery plan, late this year or early next year, paving the way for negotiations.
According to Salam, Lebanon hopes to get at least $2 billion from the IMF in a deal that will allow it to access other international aid.
