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Lebanon progress in implementing reforms remains very slow - IMF

September 21, 2022 at 11:33 pm

People gather in front of the Palace of Justice (Palais De Justice) to protest, as they demand the release of those who stormed the banks on Friday in an attempt to retrieve their savings frozen in the banking system in Beirut, Lebanon on September 19, 2022. [Hussam Shbaro – Anadolu Agency]

Lebanon’s progress in implementing reforms required to unlock relief funds from the International Monetary Fund (IMF) remains very slow, the IMF said in a statement on Wednesday, Reuters reports.

Lebanon agreed with the IMF on a list of 10 reforms to get access to $3 billion to ease its financial meltdown, which has left eight in 10 people poor, and is considered one of the worst globally since the Industrial Revolution.

“Despite the urgency for action to address Lebanon’s deep economic and social crisis, progress in implementing the reforms agreed under the April (staff-level agreement) remains very slow,” the IMF said at the end of its delegation’s visit to Beirut.

It was the IMF’s first public assessment of how Lebanon was faring on its reform checklist, which includes laws on capital reforms, banking secrecy and a 2022 budget.

Parliament’s general assembly met to discuss the budget last week but the session fell apart due to the lack of a quorum, after lawmakers walked out. Discussions will resume on 26 September.

READ: Lebanon bid for IMF deal hits snags

It is still debating a capital controls law and an amended banking secrecy law that it passed in July has been sent back to lawmakers to revise.

The IMF statement also said the country’s financial recovery plan should respect the internationally recognised hierarchy of claims, in which the state and depositors receive more protection than the private sector.

The IMF said Lebanon’s small depositors must be fully protected and recourse to public resources should be limited.

Lebanon’s cabinet passed a financial recovery roadmap in May, but it is facing serious objections from banks and the private sector.

After meeting the IMF delegation on Wednesday, Lebanon’s President, Michel Aoun, said that “domestic actors” had slowed progress towards reform.