On March 23, 2023, Ernesto Rego Ramirez, head of International Monetary Fund’s mission to Lebanon, warned that Lebanon is at a perilous crossroads due to a rapidly deteriorating economy and urged the immediate implementation of reforms. This declaration was made during a press conference following the periodic review of economic progress in Lebanon, during which meetings were held with officials and entities. Ramirez cautioned that a lack of action would result in an endless crisis, leading to increased poverty and unemployment, with many people unable to access their funds in banks. Although preliminary agreements had been reached between the IMF and the Lebanese government, Ramirez expressed dissatisfaction with the slow progress in implementing financial reforms in Lebanon. He urged leaders to take swift action to avoid doubling the costs to the Lebanese people. Ramirez also called on the Lebanese government to ‘stop borrowing from the Central Bank’ and emphasized the importance of addressing financial sector losses as agreed upon in the initial agreement. Since 2019, Lebanon has been undergoing an unprecedented economic crisis which the World Bank deemed one of the worst in 150 years. Economists believe that choosing a president and forming a government to implement significant administrative and structural reforms, with the backing of the IMF and donor nations, would lead to Lebanon’s recovery.
BEIRUT, March 23, 2023 (Xinhua) — The head of the International Monetary Fund’s mission to Lebanon, Ernesto Rego Ramirez, warned today (Thursday) that “Lebanon is at a very dangerous moment at a crossroads” in light of an accelerating economic collapse, calling for accelerated reforms.
This came in a press conference at the end of the Fund’s mission visit to Lebanon, during which it held meetings with a number of officials and entities within the framework of the periodic review of economic developments in Lebanon and the preparation of an evaluation report on them.
Ramirez warned that “the existing stalemate and failure to take the required measures would plunge the country into an endless crisis.”
“We see a high rate of poverty and unemployment in Lebanon, and many cannot access their money in banks,” he added.
He explained that “nearly a year has passed since the Fund reached a preliminary agreement with the Lebanese government,” noting that “the Lebanese have made progress, but unfortunately progress is very slow, given the complexity of the situation.”
He added, “The country is in a major crisis, and the Fund was expecting more in terms of approving and implementing legislation related to financial reforms in Lebanon.”
He pointed out that “delaying reforms will double the cost to the Lebanese people, and we urge the government to expedite their implementation.”
Lebanon had reached an initial agreement with the International Monetary Fund to fund $3 billion to be spent over 4 years, on the condition that appropriate legislation be adopted regarding capital control and reform of the banking sector, but disputes in the country still prevent the adoption of the required reforms.
Ramirez indicated that “there are no new estimates of losses in the Lebanese financial sector,” and called on the Lebanese government to “stop borrowing from the Central Bank,” stressing that “everyone will have to bear the losses of the financial crisis.”
He stressed that “tackling the losses is a necessary matter,” stressing that the initial agreement signed by the government with the fund urges it to accelerate the implementation of reforms in order to obtain a rescue package.
Since 2019, Lebanon has been suffering from a severe economic and financial crisis, which the World Bank ranked among the worst in the world in 150 years.
Economists believe that electing a president for the country and forming a government capable of implementing administrative and financial structural reforms would put Lebanon on the road to recovery, with the support of the International Monetary Fund and donor countries.
In conclusion, the warning from the head of the International Monetary Fund’s mission to Lebanon, Ernesto Rego Ramirez, is a clear sign that the economic situation in the country is critical. Despite progress being made, the complexity of the situation has slowed reform implementation, and the stalemate might lead to further economic collapse. The people of Lebanon are suffering from high levels of poverty and unemployment, and access to their own money in banks has become increasingly difficult. It is crucial for the government to expedite the implementation of financial reforms in order to obtain a rescue package from the International Monetary Fund. The road to recovery for Lebanon lies in the creation of a new government capable of implementing administrative and financial structural reforms with the support of the international community.