Mon. Oct 18th, 2021

The new government of Lebanon held its first meeting with a call by the president to resume talks with the International Monetary Fund to begin the recovery from one of the worst economic crises in the world in more than a century.

Lebanon’s new prime minister, Najib Mikati, who took office last week and vowed to revive IMF talks to unlock aid, said Monday there is no time to lose and no easy path to one. Of the worst economic collapses in history.

The new government, formed after more than a year of political stalemate, replaced a caretaker administration that ceased after last year’s big explosion in Beirut.

Mikati told the cabinet that it would require will, determination and a plan to achieve the hope of the people.

‘It’s true that we do not have a magic wand. The situation is very difficult, “reads the statement made by the billionaire.

The most urgent mission of the 24-member cabinet in the coming weeks will be to improve conditions in the country of six million, including one million Syrian refugees.

Lebanese people hope that the new administration will finally find a way out of a crisis that has plunged the currency by about 90 percent since late 2019 and forced three-quarters of the population into poverty.

Mikati promised to work hard to solve a shortage of fuel and medicine, the stock of which dried up as the country’s foreign exchange reserves depended on imports.

The government will have to manage public anger and tension resulting from the lifting of fuel subsidies by the end of the month.

Western governments, including the United States and France, have welcomed the creation of the cabinet, while urging them to carry out swift reforms that international lenders have demanded before loans can flow.

“We need the help of the IMF, the World Bank, regional and international funds,” President Michel Aoun, who approved the new government after months of negotiations, told the cabinet. “What is needed are urgent, decisive steps to start reforms.”

Mikati has previously said that resuming IMF talks will be a priority. On Friday, he said that divided politics should be put on one side and that he could not go to the IMF talks if he faced opposition at home.

As a boost to the government, the finance ministry said Lebanon would receive a total of $ 1.135 billion in IMF special drawing rights (SDRs), more than the $ 860 million expected as part of a general allocation of the IMF.

In addition to the $ 860 million from 2021, the amount includes $ 275 million from 2009, the ministry said, adding that the amount will be deposited with the central bank on September 16.

According to the report by Zeina Khodr of Al Jazeera of Beirut, Lebanon, as a shareholder in the IMF, has special drawing rights. Lebanon, which has withdrawn more than $ 1 billion, is “definitely a lifeline”, but the question is how the government will spend it.

“Will it continue to subsidize goods, a policy that has been criticized for leading to smuggling and importers collecting fuel and creating a black market?” Khodr said.

‘Or will it use this money to support half a million families, vulnerable families who need $ 100 in cash every month?

“The economy has collapsed. More than 80 percent of the population is poor. The currency collapsed. There are many challenges ahead. But the $ 1 billion – of course it will help – but it’s a short-term solution. What this government needs is a sustainable path to recovery, ‘Khodr said.

Information Minister George Kordahi told reporters after the meeting that Prime Minister Najib Mikati plans to hold intense cabinet meetings to work on improving issues that ‘have direct consequences for the citizen’.

Kordahi quoted Mikati as saying at the meeting that “people are looking for action and are no longer worried about talks and promises.”

The IMF talks broke down last year with politicians and banks disputing the extent of huge losses disputed by a government financial recovery plan endorsed by the Fund. Aoun urged the government to include the financial recovery plan in its policy program, as well as reforms outlined by a French plan last year.

The previous government has failed to implement structural reforms that donors have been urging for years, including measures to address corruption and waste at the root of the crisis.

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