And in the visit that the Fund's delegation will make to Lebanon next month, it is expected that the Lebanese side, specifically the private sector, will present the possibility of establishing a fund whose revenues contribute to returning deposits to their owners, which former Economy Minister Raed Khoury previously proposed.
However, in light of Lebanese officials' failure to implement IMF reform conditions and the extent to which IMF can respond to the demand to involve the state in the losses and the benefits that will accrue from it, Nidaa Al-Watan discussed with Minister Khoury the issue.
What will the mission of IMF delegation be?
Khoury explained that IMF delegation would discuss with Lebanese officials the reasons that prevented them from meeting the required reforms throughout the past ten months.
According to Khoury, the delegation will also see if Lebanon will implement the necessary reforms or decide to withdraw its involvement in the Lebanese file if the delegation believes there is no chance for improvement.
Khoury stressed that Lebanon's issue is not limited to IMF, as the country suffers from complete paralysis, the parliament cannot legislate laws because of a lack of quorum every time it convenes, and the cabinet does not meet due to the presidential vacuum, which has brought Lebanon to the stage of complete stagnation or the so-called "deadlock."
"This reality can only be broken by electing a president and reaching an IMF agreement because it is a necessary step to be able to stand on our feet," Khoury said.
"Western countries charge the Fund with addressing the problem of countries that are unable to pay their debts, such as Lebanon, which suffers from financial and economic crises," Khoury indicated, saying IMF is a necessary step to allow the country to reopen to foreign investments for the public or private sectors, regardless of the political forces' opinion.
Is it possible to amend the terms of the Staff-Level Agreement signed with IMF in April 2022?
The IMF administration is not "strict" in its dealings with Lebanon and in the text of the conditions, Khoury explained.
He added that in a meeting with IMF officials, he asked whether IMF had ever faced a country like Lebanon, and the answer was no, in terms of what the state and Banque du Liban (BDL) are suffering from running out of money, and even the banks.
"IMF cannot use the same solutions adopted in any other country, and the solutions offered to Lebanon must be outside the usually approved ones," he underlined.
"In the banking restructuring and financial regulation laws, there is an item for writing off deposits, at least for those that exceed $100,000, as for those that are less, part of them will be paid in Lebanese pounds according to the black-market exchange rate, and thus their return will be entirely in cash dollars."
According to Khoury, the solution starts from this point.
What are the possible remedies to follow through the use of state property?
Khoury pointed out that there is a solution that benefits all parties.
He said, "if we put ourselves in place of IMF, the depositor, banks, and politicians, we can adopt a solution that has been applied in most countries:
For instance, Dubai in the 80s was a worthless desert, and the state held the majority of the land that belonged to it. So, it decided to provide the grounds to private sector investors for free to develop and build them.
Therefore, it attracted investments from abroad and granted investors many lands.
The result was an increase of 200 or 300 times in the lands value that are still owned by the state after the rise in the value of real estate due to the involvement of the private sector in the economy.
Thus, the state became more prosperous, and instead of owning 100 percent of a project, it now owned 50 percent of hundreds of projects, which made it profitable.
What about public utilities?
Khoury underlined that Beirut Port is a large facility owned by the state and located in Lebanon's most expensive area.
He said the ports of Tripoli or Sidon could be developed instead of Beirut Port, which can attract private sector investors in the port lands to build hotels or residential centers.
Additionally, Khoury explained that there is a possibility to expand the area by 500,000 square meters, saying if the value of a square meter of land was $5,000, equivalent to $10 billion for the entire port area, then after developing and pumping investments, the value of the land may become, after 5 or 10 years, about $50 billion.
Therefore, the state and the depositors will win in the end, and the IMF will be "relaxed" because it no longer fears that the state will sell its property and renounce its guarantee of the loans. Moreover, the outcome will be reflected in economic growth and an increase in the gross domestic product's value.