Frustration at International Aid Conference
On Wednesday a virtual international aid conference was held to support Lebanon in the midst of its economic and political crises. French President Macron expressed frustration at the delay in the country’s government formation and subsequent reforms. He announced that he will return to Lebanon in December to “pressure the political class” and that “politicians must form a government to conduct reforms or else there will not be international aid.” [The 961]
ANALYSIS
President Macron will arrive to Beirut for one last attempt to encourage the formation of an independent government committed to carrying out needed fiscal, monetary, and socio-economic reforms. Meeting with UN and international donors December 2, a group led by France agreed to set up a new fund to support the immediate needs of the Lebanese people through funding civil society organizations. If the Lebanese government does not respond positively to Macron’s visit, it will surely collapse as it will have depleted its remaining capital reserves by then. The international community should re-channel billions of dollars in CEDRE and multilateral commitments into a fund that will deliver programs directly to the people of Lebanon, without the participation of the current government. Now is the time to save the people of Lebanon.”
-ATFL President Edward M. Gabriel
World Bank Releases Report Depression in Lebanon
The World Bank released its Fall 2020 report on Lebanon’s economy titled, “The Deliberate Depression.” The report warns of a deliberate depression in Lebanon with severe repercussions for the country’s human capital, stability, and prosperity. It projects a major deceleration in Lebanon’s real GDP growth from a -6.7 percent contraction in 2019 to a -19.2 percent contraction in 2020. The report presents a comprehensive reform agenda meant to address root causes of Lebanon’s economic crisis. [World Bank]
ANALYSIS
“The title of the report, “The Deliberate Depression,” says it all. What is going on in Lebanon could have been avoided had there been political will to enact reforms needed to right the economy, avoid the disastrous decline in the country’s finances, and enable the people of Lebanon to have the services and transparent rule of law required to live without the onus of corruption and poor governance that has brought the country to its failed state. Only the people and the refugees are bearing the burden of the leadership’s moral deficiencies.”
–ATFL Policy Director Jean AbiNader
Parliament Votes for Audit on All State Bodies
On Friday Lebanon’s Parliament unanimously voted to audit all state bodies including financial institutions, ministries and independent funds. The vote came after the central bank refused to provide necessary information to international auditor Alvarez & Marsal, which pulled out of the audit in early November. The bank cites banking secrecy laws in its justification for blocking information to A&M. The IMF and international donors demand a full central bank audit in order for Lebanon to access billions of dollars of aid. [Al Jazeera]
ANALYSIS
President Michel Aoun and key members of Parliament are calling for the need to re-engage in a deliberate and thorough forensic audit of the Central Bank and all state institutions. These are not idle statements. President Macron and UN Secretary General António Guterres have restated the need for cleaning up the financial system in Lebanon beginning with the deep-seated corruption and lack of robust and independent regulatory regimes. Will the arrest of former high-ranking military officials for corruption be the beginning of a house-cleaning or will the oligarchy continue to avoid responsibility for Lebanon’s demise?”
-ATFL Policy Director Jean AbiNader
Disclaimer: The views and opinions expressed are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.