Lebanon's Finance Minister Ghazi Wazni said on Friday that talks with the International Monetary Fund are on hold until economic reforms begin and an agreement on the Lebanese side on a common approach for calculating losses, Reuters reported Wazni as telling the local al-Joumhuria. The state official said he will remain in contact with the IMF until negotiations resume.
“What is being worked on today is defining the losses and their size in all sectors,” Wazni said. “We must come up with a unified approach agreed upon with all political forces and in coordination between the government and parliament.”
“...We must agree as soon as possible.”
Lebanon entered into talks with the IMF in May as part of a last-ditch effort to save its fast-sinking economy and has not seen a crisis of this scale since the end of its 15-year civil war in 1990. But talks have been rocky as there have been disagreements over the size of losses, with the government, central bank, commercial banks, and Members of Parliament unable to come to a decision.
A parliamentary fact-finding committee said on Wednesday losses in the system were between a quarter and half the amount set out in a government recovery plan that was submitted to the IMF.
The IMF has said the government’s numbers appear to be about the right order of magnitude.
The economy has rapidly deteriorated since mid-2019, and now inflation has seen the value of the local currency plummet and the purchasing power of Lebanese sink. Unemployment and hunger are on the rise as poverty rates grow steadily.
The country has for years failed to make reforms that were required for donors to receive international aid. This time, foreign governments, including the US, and lending agencies have warned that there will be no aid unless reforms are made across a number of sectors.
Recently, the secretary general of the Finance Minister Alain Bifani who was on the team negotiating with the IMF resigned, saying he was protesting the way leaders were handling the crisis. Before that, another member of the negotiation team, Henri Chaoul, resigned saying he saw no real will to reform. In an interview with Al Arabiya English, Chaoul said “Literally no one is doing their job.”
The deterioration of the economy has accelerated this week, with the value of the lira hitting new lows and power cuts increasing in the country that has for years failed to provide 24-hour electricity to its citizens.