Lebanon News

ISGL tells Lebanon to enact swift reforms or face collapse

Le Drian closes the Lebanon International Support Group meeting in Paris.

BEIRUT: Lebanon must form a credible government that can carry out swift reforms if it wants to receive international support and avoid a “chaotic unwinding of its economy and increased instability. ”The stern warning came in a final communiqué issued after an international conference in support of Lebanon hosted by France Wednesday that was aimed to push Beirut to quickly form a government that could improve the worsening economic and financial situation in the protest-hit country. 

France, the U.S., Russia and other countries made aid to Lebanon conditional on the formation of a new reform-minded government.

The one-day meeting in Paris, co-chaired by France and the United Nations, was attended by representatives of the International Support Group for Lebanon. The ISGL brings together the United Nations, the governments of China, France, Germany, Italy, Russia, the U.K. and the U.S., along with the European Union and the Arab League. 

The communiqué urged the new government to satisfy the demands of thousands of Lebanese who have taken to the streets since Oct. 17 in an unprecedented popular uprising against the ruling political elite.

Noting that Lebanon has been left without a government for more than six weeks since Saad Hariri resigned as prime minister on Oct. 29 under pressure of the nationwide street protests, the statement said: “The Group considers that preserving Lebanon’s stability, unity, security, sovereignty, political independence and territorial integrity requires the urgent formation of an effective and credible government capable to meet the aspirations expressed by all the Lebanese that will have the capacity and credibility to deliver the necessary substantive policy package of economic reforms, and that will be committed to dissociate the country from regional tensions and crisis. It is urgent for the new government to be in place as quickly as possible.”U.S. Secretary of State Mike Pompeo said the United States stands ready to assist the Lebanese people in light of the economic and political situation.

“We know that the financial situation there is very serious, that their Central Bank is under real pressure, that the Lebanese people are challenged and don’t have access to their accounts,” Pompeo said, referring to the current banking measures in Lebanon that limit cash withdrawals.

“We do stand ready to do the things that the world can do to assist the Lebanese people of getting their economy and government right and I am very hopeful that the Lebanese people would be successful in that,” Pompeo said during a press briefing in Washington.

The Trump administration has been intensifying sanctions on Hezbollah, targeting their institutions, local banks affiliated with them, as well as their MPs.

“But the responsibility lies on the Lebanese people to demand sovereignty and prosperity and freedom from outside entities,” Pompeo said. “We have designated terrorist organizations like Hezbollah and I know the people of Lebanon understand the risk that this presents to their freedom and their capacity to deliver for themselves.”

The ISGL noted that Lebanon faces “a deep economic and social crisis which has placed the country at risk of a chaotic unwinding of its economy and of increased instability.”

“In order to halt the sharp deterioration in the economy and financial sector, to restore confidence in the economy and to address, in a sustainable manner, the social and economic challenges, there is an urgent need for the adoption of a substantial, credible and comprehensive policy package of economic reforms to restore fiscal balance and financial stability and address long-lasting structural deficiencies in the Lebanese economy,” the ISGL said in the statement. “A sustainable financing model is needed to reduce the economy’s vulnerability and reliance on external funding. These measures are of utmost importance to bring answers to the aspirations expressed by the Lebanese people.”

The ISGL urged the Lebanese authorities to adopt a “reliable 2020 budget” in the first weeks after the formation of a new government and fight more rigorously against corruption and tax evasion.

Speaking at the end of the meeting, French Minister Jean-Yves Le Drian said the only possible criteria for aid was the effectiveness of the government in implementing the reforms awaited by the population.

“This is the only way that the participants around this table and beyond can mobilize to give Lebanon the support it needs,” he said. “These reforms are indispensable and essential to allow the mobilization of the international community in support of Lebanon.”

Reuters quoted a diplomatic source as saying that the ISGL was intent on holding back all financial help until a credible government was in place, adding that there would be “no blank check or bailout.”

Thanking participants in the ISGL meeting, Hariri emphasized that a solution to the economic and political crisis was through the formation of a government of experts and a rescue plan implemented with the support of Lebanon’s friends.

In a statement released by his media office, Hariri said that he took due note of the final statement issued by the ISGL, adding that he believed getting out of the crisis required: “Accelerating the formation of a government of technocrats that constitutes a homogeneous and credible working group qualified to provide answers that meet the aspirations of the Lebanese after Oct. 17; preparing a rescue plan at the economic, social, monetary, financial and production levels; and implementing this plan with the full support of the brothers and friends of Lebanon in the international community, the international financial institutions and Arab funds.”

In their statement, the ISGL said that within the first six months after the formation of the government, ambitious structural measures to ensure a sustainable economic model should be put in place. “The Group reaffirms that the conclusions of the CEDRE Conference, agreed upon by the Lebanese authorities on April 6, 2018, are still valid. In this regard, the Lebanese authority should accelerate implementation of existing projects and commit to prioritize the different projects of the Capital Investment Plan in line with people’s needs and expectations and set up an inter-ministerial committee to oversee their timely implementation,” the statement said.

The ISGL reaffirmed its willingness to support “a Lebanon committed to reforms in the implementation of such a comprehensive set of actions, including through technical assistance to a new government, and to ensure Lebanon’s access to basic goods and trade facilities, as currently provided for by trade facilitation programs, to preserve the livelihood of the population and economic resilience.”

 
A version of this article appeared in the print edition of The Daily Star on December 12, 2019, on page 1.

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