Lebanon's IMF fund depletion: A looming crisis for the Caretaker Government

Lebanon Economy
2023-09-17 | 01:36
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Lebanon's IMF fund depletion: A looming crisis for the Caretaker Government
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Lebanon's IMF fund depletion: A looming crisis for the Caretaker Government

Facing a new crisis, the caretaker government in Lebanon, led by Prime Minister Najib Mikati, is grappling with the depletion of funds from the International Monetary Fund (IMF) that were disbursed by the Cabinet. 

This article was originally published in, translated from the Arab outlet of Asharq Al-Awsat. 

This comes after the acting Banque du Liban (BDL) Governor, Wassim Mansouri, refused to transfer the funds to cover the government's essential expenses unless there is a legal basis for it.

MP Mark Daou posed a question to the government through the General Secretariat of the Lebanese Parliament regarding this matter, stating that the government "spent a sum of $1.139 billion, which Lebanon received from the IMF in September 2021." 

Meanwhile, experts warned that the state "will become incapable of paying public sector salaries and will be faced with two options: either confronting the people on the streets or complying with the IMF's conditions and start implementing reforms."

The Lebanese Ministry of Finance justified the disbursement of IMF funds by citing the state's urgent needs. 

A source at the Ministry of Finance told Asharq Al-Awsat that "all the funds disbursed by the Ministry from the Special Drawing Rights are documented, and they have been provided to support cancer drugs, intractable and chronic diseases, kidney dialysis, wheat procurement, Électricité du Liban, fuel procurement, and the repayment of loans to the World Bank, among others." 

They mentioned that "the remaining amount is approximately $70 million."

On the other hand, the head of the Finance and Budget Committee, MP Ibrahim Kanaan, considered that "the government and its head spent this money contrary to the applicable financial laws and contrary to the commitment they made to the Parliament." 

This was seen by financial and economic expert Sami Nader as "the disbursement of Special Drawing Rights funds undermines the credibility of the state in the eyes of the 'outside.'"
 

Lebanon News

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International Monetary Fund

Wassim Mansouri

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