IMF: Crisis-Ridden Lebanon Needs to Form New Govt., Launch Reforms

“The change of direction cannot be done on a piecemeal basis. It requires a comprehensive approach,” said Director of the IMF’s West Asia and Central Asia Department, Jihad Azour, on Sunday.

He stressed that the long-awaited reforms should focus on the financial sector, public finance, governance, corruption, and loss-making utilities that have contributed to a surge in debt.

The crisis in the small Mediterranean country, which has been without a government for months, commenced before the COVID-19 pandemic and accelerated after a massive stockpile of ammonium nitrate, stored unsafely for years, exploded in Beirut’s port in August last year, devastating the port and killing more than 200 people.

Prime Minister-designate Saad Hariri has so far failed to form a government. The previous government resigned after the colossal explosion last year.

Lebanon is experiencing its worst economic crisis in decades, compounded by the COVID-19 pandemic, with prices skyrocketing and more than half of the population living below the poverty line.

Lebanon’s economy shrank by 25 percent last year, the IMF said in a report week.

“In (the) absence of a new government that can lead this transformation, it’s very difficult to expect that the situation will in itself improve,” Azour added.

He joined other officials calling for an end to wrangling over the cabinet, as Lebanon’s politicians, since late 2019, have failed to reach an agreement on a rescue plan to unlock foreign cash which Lebanon desperately needs.