Macron’s draft roadmap for Lebanon is wildly ambitious and full of gaps, experts warn.
During his second visit to Lebanon since the Beirut explosion, French President Emmanuel Macron unveiled a draft roadmap for Lebanon’s next government. The roadmap, seen by Reuters, forms a year-long timeline starting from mid-September when politicians have agreed to form a new government.
If Lebanon is not on course to implement these economic and political reforms within three months, Macron has threatened sanctions against Lebanon. He also suggested that the international community would not release funding worth around $11 billion in soft loans and grants.
But the roadmap veers from being wildly ambitious to neglecting key issues that affect the Lebanese.
Here are some of the problems with the plan, according to experts:
The first item on France’s list of reforms is to adopt and publish an agenda for resuming talks with the International Monetary Fund (IMF). With Lebanon’s’ economy in free fall, most observers agree that an IMF loan is the only solution to stabilize Lebanon’s disastrous local currency.
Lebanon requested a $10 billion bailout in April, to help it recapitalize its insolvent banking sector, continue to import essential items in foreign currency, and make sovereign debt repayments.
But talks with the IMF broke down earlier this year, and show no sign of improving; last week, the third Lebanon IMF negotiator quit his post.
Given the current state of talks, Lebanese economist Mohammad Faour believes that agreeing on an agenda with the IMF will take much longer than two weeks.
“Even if they do pull off a government in 15 days they would only have under two weeks to resume talks. Their negotiating team has resigned and they are yet to agree on the losses and how to distribute them,” he told Al Arabiya English.
A number of items need to be clarified before meaningful talks can be resumed, Faour explained. These include appointing a new negotiating team, resuming talks with local banks and getting Banque du Liban (BDL) to agree on its full losses and net reserves.
With zero change in leadership at the BDL, there is no reason to believe that a breakthrough in negotiations is just round the corner, according to Lebanese organizer, researcher and podcaster Nizar Hassan.
“The battle over financial sector restructuring and the distribution of the crisis’ costs is the most sensitive one. The financial oligarchs sabotaged the negotiations before through the parliament committee and the propaganda about the numbers,” Hassan told Al Arabiya English.
Further down the line, the roadmap calls for other economic and fiscal reforms including a capital control law approved by the IMF and by the end of the year, a published budget for 2021.
The capital control law should not take longer than a month to implement, according to Faour.
But a budget by December 31 may be more of a challenge. In the past, budgets have known to be passed over a year late. The roadmap referenced by Reuters also does not include target for the 2021 budget deficit – which lawmakers ambitiously hoped would be around seven percent of gross domestic product (GDP) this year.
Other gaps in the roadmap are even more glaring, Hassan observed. The roadmap does not include any push for social redistribution, combating poverty or helping the unemployed – important considerations in a country with over half of the population in poverty.
Neither does the roadmap include mention of a new election law, despite calling for new elections –many activists view a new election law crucial to transitioning away from a sectarian state toward a more secular system.
As a result of these large areas of oversight, Hassan believes that France has fashioned a roadmap which will allow the current ruling class to cling onto power, while also gaining international funding.
“Because it is not very daring, they can do it. It is a lifeline for the political class. They can do it and remain in power: you do these reforms and we give you money. This is the opposite of what we need today,” he continued.
“They are likely to think of this as a mere box-ticking exercise,” added Faour, referring in particular to appointing members to the newly-formed the national anti-corruption authority.
“The reality is that these measures have not been implemented in the way they’re meant to be implemented,” he said.
Recent experience is not encouraging. It took almost a decade for the Lebanese Parliament to pass the Anti-Corruption Law in April this year.
It is unlikely that simply appointing members to the long-awaited National Anti-Corruption Commission will be sufficient to tackle Lebanon’s endemic corruption and lack of transparency.