Via IMF (Den Internationale Valutafond)

Statement by IMF Managing Director Kristalina Georgieva on the International Conference on Support to Beirut and the Lebanese People







August 9, 2020















AS PREPARED FOR DELIVERY

Washington, DC:
Ms. Kristalina Georgieva, Managing Director of the International Monetary
Fund (IMF), made the following statement today at the end of the high-level
International Conference on Support to Beirut and the Lebanese
People
” after the August 4 explosion:

“I would like to thank French President Emmanuel Macron for bringing us
together just days after the devastating explosion in Beirut and express
heartfelt solidarity with the Lebanese people. It is a terrible tragedy,
coming at a terrible time. Lebanon has been struggling with profound
economic and social challenges, aggravated by a pandemic, but even more so
by the shortage of political will to adopt and implement meaningful reforms
the people of Lebanon have been calling for. This is the moment for
Lebanese policymakers to unite and address the severe economic and social
crisis. It is also a moment for the international community to stand by the
country and its people – with urgent humanitarian assistance, and support
for reforms to pull Lebanon from the brink of economic collapse.

“Over the last months we have been engaged intensely with the Lebanese
authorities, as well as with civil society and the international community,
on a reform package aimed at addressing the deepening crisis, strengthening
governance and accountability, and restoring confidence in the economy.
Unfortunately these discussions have yet to yield results.

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“We are ready to redouble our efforts. But we need unity of purpose in
Lebanon—we need all institutions to come together determined to carry out
much needed reforms.

“First, to restore the solvency of public finances and the soundness of the
financial system.

Current and future generations of Lebanese must not be saddled with more
debts than they can ever repay. This is why the IMF requires debt
sustainability as a condition for lending. And the financial system must be
solvent—those who benefitted from past excessive returns need to share the
burden of bank recapitalization, to protect the life savings of the vast
majority of ordinary Lebanese depositors.

“Second, to put in place temporary safeguards to avoid continued capital
outflows

that would further undermine the financial system while reforms are taking
hold. This includes adopting legislation to formalize
capital controls in the banking system and eliminate the current multiple
exchange rate system to help protect Lebanon’s international reserves while
reducing rent-seeking and corruption.

“Third, upfront steps to reduce the protracted losses in many state-owned
enterprises.

There must be more predictability, transparency, and accountability—with
comprehensive audits of key institutions, including the central bank.

“Finally, an expanded social safety net has to be in place to protect the most
vulnerable people.

They must not be asked to bear the brunt of this crisis.

“Commitment to these reforms will unlock billions of dollars for the benefit
of the Lebanese people. This is the moment for the country’s policymakers
to act decisively. We stand ready to help.”

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