BEIRUT – A delegation from the International Monetary Fund led by Ernesto Ramirez-Rigo is expected to arrive in Beirut Monday evening for a multi-day visit. The visit is part of the official negotiations between Lebanon and the IMF for the purpose of unlocking a financial assistance program for the country to try to pull it out of its economic crisis.
Here’s what we know:
• The visit was confirmed to L'Orient-Le Jour by a source familiar with the matter, who could not however specify the duration of this visit. Discussions between the IMF delegation and the team of negotiators appointed by Lebanon, which are led by former IMF member Deputy Prime Minister Saade Chami, should focus on the measures that Lebanon must take in line with its economic and financial recovery plan, its 2022 draft budget and its electricity reform plan.
• Electricity reform is arguably the most urgent matter in the sense that it should be quickly approved and submitted to the World Bank, which should, in turn, approve a loan request made by Lebanon to finance two fuel deals: the American initiative, aimed at importing electricity from Jordan and Egyptian gas in order to improve the massive electricity cuts that Lebanon is suffering from. The total amount of financing required for these two deals is around $600 million.
• On the other hand, the 2022 draft budget, a key demand from the IMF, was approved by cabinet on Feb. 10. It is still awaiting discussion and a vote in Parliament.
• Lebanon has been sinking into a worsening crisis since October 2019, with a currency that has lost more than 90 percent of its value, a financial sector that has lost the confidence of depositors and increasingly dilapidated infrastructure. The country officially made a request to the IMF for the first time in 2020, after defaulting on its foreign Eurobonds payments. A first series of discussions launched in May was suspended in July due to the lack of consensus on the Lebanese side on the distribution of the losses of the banks and Lebanon’s central bank, headed by Riad Salameh. It was not until September 2021, with the formation of Najib Mikati's government, that the discussions restarted.
• A delegation from the American Treasury Department is also expected to arrive in Beirut, according to press information that L'Orient-Le Jour was able to confirm. It is headed by the Acting Assistant Secretary and Principal Deputy Secretary for the Office of Terrorist Financing and Financial Crimes Paul Ahern. The purpose of this visit was not clearly explained by the sources contacted.