Lebanon set to request technical assistance from IMF

Lebanese Prime Minister Hassan Diab presents his government's policy statement to parliament during a session for a vote of confidence in Beirut on Tuesday, Feb. 11. (Reuters)
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Updated 13 February 2020

Lebanon set to request technical assistance from IMF

  • Crises in the country necessitate harsh measures for Lebanese, says President Michel Aoun

BEIRUT: Senior Lebanese politicians are expected to refuse to pay an external debt on time and are seeking technical assistance from the International Monetary Fund (IMF).

Lebanese President Michel Aoun said: “The financial and economic crises that Lebanon suffers from can no longer be solved easily and have necessitated relatively harsh measures for the Lebanese, and the cost today is higher than before.”

On Wednesday, Aoun warned that “everyone who reached out to the treasury will be tried according to the law before a special court specializing in financial crimes against public money.”

The government of Prime Minister Hassan Diab, which won modest confidence in parliamentary votes on Tuesday night, faces its first financial obligation after 25 days, as Lebanon has to pay a domestic and external debt of $1.2 billion. The debt consists of treasury bonds issued by the Ministry of Finance in March 2010 for a period of 10 years, with an annual interest of 6.375 percent. The external debt is about $800 million, while the domestic debt is about $400 million.

A source close to Minister of Finance Ghazi Wazani told Arab News: “The government is moving toward developing a program to request technical assistance from the IMF and launch a negotiation process with creditors based on the advice of the IMF, with the aim of restructuring public debt in order to avoid seizure of the ministries by the IMF and interference in Lebanon’s economic policy.”

Marathon meetings are being held at the Ministry of Finance to prepare this plan before the end of February. The source said: “There are two tendencies in the state, a political tendency to postpone the payment of the debt and an economic tendency to pay the debt on time and negotiate over the coming months.”

An economist loyal to the political opposition in Lebanon told Arab News, on condition of anonymity, that “Lebanon can postpone the payment of its debt in one case when it has an integrated plan to present to the creditors and tell them ‘this is the solution.’ Restructuring of the debt is part of this solution. Going to the creditors without a plan is the easiest way to take Lebanon to a new crisis situation.”

The economist pointed out that “there are those who say that paying the debt will be from the accounts of the depositors in banks. If it is correct, what will happen? The government talked about an emergency plan. Is this the program that you will present to the IMF and creditors? Why was this plan not attached to the ministerial statement to gain confidence on the basis of it in parliament?”

The Association of Banks in Lebanon urged the government to pay the debt on time. The association said that Lebanon “has already pledged to fulfill its financial obligations.”

The association said in a statement that “failure to pay Lebanon’s external debts should be thought about very carefully. What is required is time, contacts, mechanisms that are in line with international standards and seeking the assistance of the competent international bodies. The remaining period until the debt is due is very short and does not allow time for preparation and dealing efficiently with this important national issue.”

Economist Jad Shaban, who is one of the activists in the civil movement, told Arab News:“The government must define its priorities. Is preserving Lebanon’s international reputation more important than ensuring the state’s finances? Lebanon has a very low credit rating and losses have become a reality, and the government must now prioritize its assets in dollars.”

Shaban added that the government “lacks popular legitimacy because it is a new facade of the existing authority.”

The International Support Group for Lebanon stressed Beirut must “implement concrete, credible and comprehensive reforms quickly and resolutely to stop and reverse the growing crises, and to meet the needs and demands of the Lebanese people.”


Syria Kurdish-led force launches new anti-Daesh campaign

Updated 05 June 2020

Syria Kurdish-led force launches new anti-Daesh campaign

  • Operations will focus on the vast east Syria desert near the border with Iraq

BEIRUT: US-backed Kurdish fighters in Syria announced Friday a fresh campaign to hunt down remnants of the Daesh group near the Iraqi border following a recent uptick in attacks.
The Syrian Democratic Forces, a Kurdish-led paramilitary alliance that has spearheaded the ground fight against Daesh in Syria since 2015, said that the new campaign is being carried out in coordination with the Iraqi army and the US-led coalition.
“This campaign will target ISIS’s hideouts and hotbeds,” it said, using a different acronym for the militant group.
It said operations will focus on the vast east Syria desert near the border with Iraq where Daesh has conducted a spate of attacks in recent months.
Since the loss of its last territory in Syria in March 2019, Daesh attacks have been restricted to the vast desert that stretches from the heavily populated Orontes valley in the west all the way to Iraqi border.
It regularly targets SDF forces and has vowed to seek revenge for the defeat of its so-called “caliphate”.
The SDF, with backing from its coalition allies, launched a campaign to hunt down sleeper cells after it forced Daesh militants out of their last Syrian redoubt in the desert hamlet of Baghouz in March 2019.
A raid in October by US special forces killed Abu Bakr al-Baghdadi, the leader of the militant group which once controlled large swathes of territory in both Iraq and Syria.
Last month, the United Nations accused the Daesh group and others in Syria of exploiting the COVID-19 pandemic to step up violence on civilians, describing the situation as a “ticking time-bomb”.
Across the border in Iraq, Daesh has exploited a coronavirus lockdown, coalition troop withdrawals and simmering political disputes to ramp up attacks.
Iraq declared Daesh defeated in late 2017 but sleeper cells have survived in remote northern and western areas, where security gaps mean the group wages occasional attacks.
They have spiked since early April as militants plant explosives, shoot up police patrols and launch mortar and rocket fire at villages.