No loans before applying these conditions

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Leah Al Azzi
The new government’s work program was drawn up by international bodies since last December, and it re-adhered to it on March 31. The program is called the “Reform, Recovery and Reconstruction” framework, and international institutions and Western countries require the implementation of its “reforms” before allowing any loans to be given to Lebanon, and that the local “civil society” monitors the implementation of the new program.

The European Union is considering sending a letter to the head of the caretaker government, Hassan Diab, “urging” him to activate the role of his government beyond the narrow scope of the caretaker government. The European Union proceeds, according to what is reported from members of its mission, that even if a new figure is assigned to form a government, the formation and development of an action plan to confront the collapse and start implementing it, a path that may take many months, and it is a “luxury” that Lebanon does not have in light of the crisis it is going through. out. The Union’s desire to bring the Council of Ministers out of the deadlock goes beyond the interest in taking immediate measures to mitigate the effects of the collapse on the population and improve economic indicators. Rather, its main objective is to re-establish official negotiations with the International Monetary Fund, in preparation for signing a program agreement with it. For Europeans, “the agreement with the IMF sends a message of confidence to the rest of the lenders – countries and institutions – to reinject hard currency into the country and activate development projects, specifically those agreed upon at the Paris 4 conference” (known as CEDRE, which was held in 2018 in France).
This argument contains a lot of “truth,” but it is not the only reason behind the enthusiasm for an agreement with the IMF, but rather because the latter will constitute the ministerial statement of any government formed. Whatever the identity of the new prime minister, the decision was taken not to release any loan to Lebanon unless it adheres to a series of “reforms” set by the “international community.”
Dollars are not free and will not be sent once a government is formed, even if it is an ally of Western parties and international institutions. What will complicate matters further is that the caretaker government headed by Hassan Diab has committed itself to the United Nations, the European Union and the World Bank to implement the provisions of the road map set by them, which was announced on December 20, 2020 in the name of “Reform, Recovery and Reconstruction”, under the title “Activating the results of the rapid assessment.” for damages, needs and other assessments, in response to the devastating explosion that occurred in the port of Beirut. It is noteworthy that Diab and a number of ministers in his government, in most cases, refused to hold meetings and take decisions, even if they were emergency, justifying the situation in the conduct of business, and their inability to inherit commitments to the new government. But when the international institutions summoned them to a meeting, they pledged to implement the results of it, and to present a report on the progress of implementing the steps at the next meeting.
The new government statement, or the framework promoted by the UN-EU-World Bank triumvirate, presents a set of specific and targeted “reforms”, and explicitly states that international support for Lebanon depends “on the government’s ability to make credible progress on reforms, and the government will need to implement Fundamental macroeconomic reforms.
The procedures to be applied are:
– progress in talks with the International Monetary Fund,
– debt and financial sector restructuring,
– Conducting a financial audit at the Banque du Liban,
– reforming the banking sector,
– Adoption of the Capital Controls Restrictions Law.
– unification of exchange rates,
Creating a reliable and sustainable path to the sustainability of public finances.
According to the published action plan, the implementation of the reforms is “a key factor for the public sector to obtain loans, whether on concessional or non- concessional terms, for reconstruction projects.”
On March 31, a virtual meeting was held that brought together international bodies, the Lebanese government, and representatives of the local “civil society,” without specifying who they are. The framework for “reform, recovery and reconstruction” was discussed. On June 7, the Kulluna Irada group announced its appointment, along with the Lebanese Transparency Association and the Maharat Foundation, to oversee the implementation and financing of the “Reform, Recovery and Reconstruction” framework.
The story does not stop at implementing reforms, but goes beyond them to “developing a new model of governance and turning the crisis into an opportunity to restore confidence in state institutions. This requires the government to take responsibility for recovery and reconstruction, while adopting a different approach by working with the international and civil society.” The latter is required to “assist in setting people’s needs, participate in policy-making, decision-making, and monitor implementation of reforms”.

In the paper issued by the two conferees after the first meeting, it is stated that with the aim of moving forward with the implementation of the recovery and reconstruction plan, “the Lebanese government affirmed its commitment to help and implement what is stated in the framework of “Reform, Recovery and Reconstruction – 3RF” within what the conduct of business allows it, especially from okay:
– Completing, within a reasonable time frame, a transparent investigation into the causes of the Beirut port explosion, with the support of Lebanon’s international “partners” in terms of cooperation and expertise,
implementation of macroeconomic reforms,
– Preparing and approving a budget for the year 2021 that includes a social protection program, establishing a unified register of social assistance programs, establishing a compensation mechanism and monitoring and evaluation systems,
Adopting a strategy for port sector reform and reconstruction, including customs. Establishing a clear institutional structure for the management of hazardous materials and waste.
For its part, the World Bank asked the government to “accelerate the approval of the trust fund allocated to Lebanon in order to collect financing resources from grants, and to enhance coordination of financing resources.” The fund was established by the World Bank in cooperation with the United Nations, the European Union and major “donors” to finance “the businesses affected by the explosion of the Port of Beirut and help the most needy population.”
In the long term, the Advisory Group requests the Lebanese government:
Ensure that insurance claims settlement is processed and solvency is monitored, while developing a policyholder protection plan
Protection of historic buildings and real estate.
As for the long-term, the most important conditions are:
Strengthening the independence of the judiciary, developing an anti-corruption strategy, completing appointments to the National Human Rights Commission and the National Anti-Corruption Commission, and strengthening the capabilities of the central inspection and the Audit Bureau,
– Adoption of the public procurement law, the adoption of the competition law, including reforms with regard to exclusive agencies, and the adoption of a strategy to restructure and develop the insurance sector,
– Adoption of a new law for the port sector, which includes the operations of the Ports and Customs Authority, and defines the roles of the government and the authority of ports and commercial operators,
Implementation of Law 462 without amendments regarding the establishment of an electricity regulatory authority and the appointment of employees.





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