Economic recovery plan approved by the outgoing Lebanese government

Saturday, May 21, 2022
author picture Liam Lambert
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Lebanon's Economic Meltdown

Despite the government's latest efforts to pull Lebanon out of its three-year financial meltdown‚ the country faces many challenges ahead. In April‚ Prime Minister Gassan Diab unveiled a plan to restore Economic stability and fill Lebanon's $72 billion financial hole. Yet‚ the plan was quickly rejected by powerful political parties and commercial banks. The banks have been major lenders to the government for decades‚ financing its wasteful dispensations. As a result‚ the IMF was skeptical of the plan‚ and two of its senior representatives resigned after the government refused to enact the measures.

BEIRUT (AP)‚ -- The country's information minister announced that the outgoing government of Lebanon approved a plan to pull the Mideast nation from its Economic crisis. This development occurred during the last Cabinet meeting before becoming a caretaker government after last weekend's parliamentary election. This plan represents a start on a long and difficult road that will ultimately lead to the liberation of Lebanon from the most severe Economic crisis it has ever experienced. This crisis that erupted in October 2019 and sparked nationwide protests is due to decades of corruption‚ mismanagement‚ and other factors. The plan still needs to be approved by Parliament. It includes restructuring of the country's banking sector‚ as well amending long-standing banking secrecy law. International Monetary Fund is keen to see a comprehensive Economic recovery plan. Last month‚ the government of Lebanon reached a tentative deal with IMF to develop comprehensive Economic policies. This could help the nation get some relief from the current crisis. International community and IMF have demanded that Lebanon undertake wide-ranging financial and Economic reforms to allow for billions of dollars in loans and investment. Ziad Makary‚ Information Minister‚ said that Prime Minister Najib Mikati approved the plan. However‚ there were objections from Ministers who are close to Iran-backed Hezbollah and Amal. A faction headed by Nabih Berri‚ Parliament Speaker‚ was against the plan. Mikati stated to reporters that while the plan was designed to protect small depositors‚ it will also help large depositors. IMF representatives will negotiate ways for protecting them. Although he did not give any figures‚ he previously stated that small depositors were those who have $100‚000 or less. Mikati stated that the country faces many challenges and called for strong leadership and collaboration from all parties. He added that every day we don't implement the Economic recovery plan fully will be more expensive. In March 2020‚ Lebanon defaulted on its huge debt. It was worth approximately $90 billion‚ or 170% percent of the country's GDP. This made it the largest sovereign nation in the world. Three-quarters (75%) of six million Syrian refugees have been pushed into poverty by the Economic crash. More than 90% percent of the value has been lost by the Lebanese Pound. Friday's approval by the Mikatis government also allowed for $35 million per month in funding to purchase medicines for patients with cancer and chronic conditions for the next four-months. Also‚ the Cabinet approved an increase in telecom prices that will begin in July. On Sunday‚ Lebanese voters elected a new parliament. Hezbollah lost majority of the 128-member legislative body. In the next few weeks‚ the new parliament will meet to elect its speaker. The President Michel Aoun will likely call for consultations to meet with new legislators‚ who then name a prime minister. It is unlikely that the process will be simple‚ as there are deep divisions within the legislature between the Hezbollah alliance and pro-Western groups‚ independents‚ and Hezbollah. Ned Price‚ spokesperson for the U.S. State Department‚ stated that Washington has urged those in power and political leaders to listen to the Lebanese call to change‚ as well as to act quickly and seriously to save the economy. Price stated that the U.S. urges the formation of a new government quickly‚ and is committed to the hard work needed to rebuild the faith of the Lebanese population.