The International Monetary Fund is said to have placed conditions on Prime Minister-designate Najib Mikati, who would seek to release part of the international aid as soon as his government is formed.
For Lebanon, it would be a question of obtaining between 3 to 4 billion dollars, far from the 10 billion dollars hoped for previously and that on condition of putting in place a formal control of the capital, of restructuring the banking sector and the public accounts, of conduct the forensic audit of the accounts of the Bank of Lebanon and unify exchange rates. This last requirement could have serious repercussions on the local market, with a very sharp rise in prices and a significant deterioration in purchasing power. In the event of populist measures such as an increase in wages, something the Mikati II government had already decided between 2011 and 2014, an infernal and uncontrolled inflationary cycle could then be triggered with consequences for the security situation.
To this sum will be added the 860 million dollars already released for special drawing rights granted to Lebanon by the International Monetary Fund. If this sum is not accompanied by special conditions, the IMF would advise Lebanon so that the most vulnerable populations can especially benefit from it when 75% of the population is currently living below the poverty line.
In Lebanon itself, some sources close to the authorities indicate that this sum could rather be used to contain the deterioration of the parity of the Lebanese pound against the dollar, while the national currency has lost more than 90% of its value against the greenback.
This sum, if it is not directly used could thus support the rationing program for the most vulnerable people or be used to contain prices by continuing for a while, the subsidy program for electricity and generators via the purchase of fuel oil, medicines or even the purchase of flour.
Macroeconomic reforms and the approval of a 2021 budget will be among the top priorities, as will the establishment of a social safety net for the most vulnerable populations in the face of the economic crisis that the country of cedars has been going through since. May 2019.
However, a limiting factor, even if his government could be quickly composed, he will have only 10 months to act before the legislative elections scheduled for 2022, a time that could seem insufficient for certain major reforms demanded by the IMF or even reconstruction. certain infrastructures such as the port of Beirut.
Another Augean stable to urgently reform for international institutions, public administrations and in particular those of customs which are on the front of the stage after having accepted the unloading of the famous ammonium nitrate at the origin of the tragedy of the 4th president August 2020.
In addition, the international community wishes to put in place mechanisms to monitor and control not only the progress made on paper but also on the ground in order to ensure that the aid that will be provided to Lebanon will not be misused. However, certain political interests might view this requirement with a dim view.