Lebanon News

Successful talks with IMF key to Lebanon’s rescue: Mikati

Mikati speaks to journalists after a meeting with Berri in Beirut, Sept. 28, 2021. (The Daily Star/Lebanese Parliament, HO)

BEIRUT: Prime Minister Najib Mikati said Tuesday he was working to ensure the success of negotiations with the International Monetary Fund as an essential move to rescue Lebanon from an unprecedented economic meltdown.

He also affirmed the government’s commitment to hold next year’s parliamentary elections on time, dispelling fears of any postponement or an extension of Parliament’s term as had happened in the past.

Mikati, speaking to reporters after a meeting with Parliament Speaker Nabih Berri to brief him on the outcome of his talks with French President Emmanuel Macron in Paris last week, promised to launch a workshop to endorse all draft reform laws in Parliament, a key demand of international donors.

Mikati said his meeting with Berri touched on Parliament’s planned legislative sessions to approve a slew of draft laws to be sent by the government, in addition to bills and proposals already on the legislative body’s agenda as part of the required reforms, including the capital control law.

“Today, we have draft laws that will be sent to Parliament, some of them are already there, such as the capital control law. There are promises that there will be a complete workshop to endorse all reform laws,” Mikati told reporters after meeting Berri at the latter’s Ain al-Tineh residence.

Since his designation to form a new government last month, Mikati, a billionaire tycoon backed by France and some regional powers, has underlined the need for resuming stalled talks with the IMF on a bailout package to save Lebanon from its worst economic and financial crunch since the 1975-90 Civil War.

Mikati denied reports of a row with President Michel Aoun over the makeup of a ministerial team to be tasked with negotiations with the IMF.

“The pattern of my work is always decided according to the desired goal. Our goal is to ensure the success of the [IMF] negotiations and rescue Lebanon regardless of who will conduct these negotiations,” Mikati said. “In the end, I am the prime minister and matters will end up with me and nothing will be approved without my agreement. I will pursue the issue and what matters is how things will end.”

Mikati’s Cabinet of 24 specialists, which is set to meet at 4 p.m. Wednesday at Baabda Palace for the first time since gaining a vote of confidence from Parliament, might decide to set up a ministerial team to be charged with negotiating with the IMF on a financial rescue program to rescue the country from an economic depression, described by the World Bank as one of the world’s worst since the 1850s, posing the gravest threat to the country’s stability since the Civil War. The team will be made up of the ministers of finance, economy, energy and social affairs, in addition to the deputy premier, a representative of the Central Bank governorate, and a number of economic and financial experts.

Mikati, who visited France and Britain last week on his first foreign trip as Lebanon’s prime minister, said after he wraps up his tour of some foreign countries, he will travel to Arab countries in a bid to rally support for Lebanon.

Because of US sanctions on Syria, Mikati said he will not visit the neighboring country, which had dominated Lebanon for nearly three decades before it was forced by international and local pressures to withdraw its army from the country in April 2005, two months after the assassination of former Prime Minister Rafik Hariri.

“I cannot subject Lebanon to any sanctions. If relations with Syria will expose Lebanon to risks, I will not accept this,” he said.

Mikati assured the Lebanese that parliamentary elections, set by May 2022, would be held on time. “There is no sign elections will be canceled. We are an executive authority and it is our duty to hold parliamentary elections on time according to laws in effect. We have an honest and definite intention to hold parliamentary elections. I don’t think there is any intention to postpone these elections,” he said.

In a TV interview Monday night, Mikati said the elections would be held on March 27, 2022, instead of May 8, 2022.

Mikati ruled out the possibility of the government selling or privatizing state assets to cope with Lebanon’s soaring public debt, estimated at more than $90 billion. “At present, there is no discussion of privatization because the conditions in the country are weak. If we open the privatization door, the price will be low. Therefore, we will allow privatization only after the nation has regained its recovery,” he said.

The European Union Ambassador to Lebanon Ralph Tarraf called Tuesday after a meeting with Mikati for the launch of economic reforms and restarting talks with the IMF.

“Constructive and action-oriented meeting with PM Najib Mikati today. We agreed on the urgency of initiating economic & governance reforms, engaging with the IMF, and preparing for the 2022 elections. I reiterated to the PM the EU’s commitment to continue to support Lebanon,” Tarraf tweeted.

Mikati said during the Monday night interview that after his government had gained Parliament’s confidence, he was working to win the people’s confidence. “This is very important,” he said.

Noting that none of his 24-member Cabinet had a membership card of a political party, Mikati said: “We are a working team to rescue the country ... I am trying to rescue the country and avert the collision. The country was left for 13 months without a government.”

He refused to give details of the government’s financial recovery plan that will be discussed with the IMF.

Instead, Mikati said he will meet with the advisory firm Lazard soon to see how a financial recovery plan it drafted for Lebanon could be developed into a "more realistic" vision for getting the country out of its crisis.

Lebanon would be very lucky if it was able to reach a framework for an agreement with the IMF by the end of the year, Mikati said.

In the most detailed comments yet on his approach for trying to reverse Lebanon's devastating financial meltdown, Mikati also promised a fair distribution of the losses in the financial system and to protect the rights of small depositors.

Lazard helped the previous Lebanese government draw up a financial rescue plan that identified losses of $90 billion. But the plan was shot down by objections from the banks, which said it made them foot too much of the bill for the collapse, in addition to opposition from the Central Bank and the ruling political elite that got Lebanon into its crisis.

"I will not announce anything except if the whole financial recovery plan is complete," Mikati told LBCI. "We have the financial recovery plan, I have asked the company that set it to come to Lebanon and they will come and I will have a meeting with them in the coming days ... to see how we can update this plan.”

With elections due next spring, Mikati is in a race against time to conclude an IMF deal. "We will be very lucky if we finish before new year," Mikati said.

“The aim of the government is take the stamp from the International Monetary Fund, which will open many doors to us,” he added.

Mikati also implicitly criticized Hezbollah, which has two ministers in the Cabinet, for bringing an Iranian fuel shipment to Lebanon through illegal border crossings, an act viewed as a violation of the country’s sovereignty.

“I am sad over the use of illegal crossings to violate Lebanon’s sovereignty. We are in an independent nation enjoying sovereignty with an Arab identity,” he said. “I will not allow Lebanon to be a platform against our Arab brothers in any form. Lebanon must distance itself from [inter-Arab] differences and build good relations with the international community and Arab countries.”

The Iran-backed Hezbollah has been criticized by its Lebanese opponents for its participation in the war in Syria and for frequently launching vehement media attacks against Saudi Arabia over the kingdom’s war against Iran-backed Houthi rebels in Yemen.

On whether he will travel to Saudi Arabia, which so far has not commented on the new government more than two weeks after its formation, Mikati said: “So far, there is no scheduled visit to the Kingdom of Saudi Arabia.”

 

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