The Lebanese Council of Ministers approved on April 30, 2020 the government’s financial recovery plan and later discussed it with heads of parliamentary blocs during a meeting that took place at the presidential headquarters in Baabda. The plan bears different titles - a program for financial recovery, reform or rescue plan, or more generally an economic plan. However, apart from the terminology and some differences in the numbers between the original version in English and the one translated to Arabic, the plan contains a book audit of the financial losses that Lebanon underwent in the past decades. In this context, this diagnosis is the first of its kind ever since the deterioration of the monetary and financial situation.
"The plan contains an audit of the financial losses that Lebanon underwent in the past decades. In this context, this diagnosis is the first of its kind ever since the deterioration of the monetary and financial situation."
The plan raises several questions regarding its many assumptions and the calculation of its values. It also generates valid concerns about its directions and goals. Therefore, we are presenting in this collective commentary, observations and suggestions by researchers, colleagues, and partners of the Issam Fares Institute for Public Policy and International Affairs (IFI) at the American University of Beirut (AUB), to address the essential aspects of the plan in the aim to contributing to a scientific and thoughful discussion on ways to approach the economic and financial crisis in Lebanon.
"The plan does not call for a celebration nor does it deserve to be considered monumental, as the country is heading towards bankruptcy and is likely going down a road that would lead to depriving it of its economic sovereignty."
In terms of form and overall framing, the plan adopts almost all the structural adjustments that international financial institutions have promoted even prior to the start of negotiations with their representatives. While some of these reforms are intuitively required, the plan does not call for a celebration nor does it deserve to be considered monumental, as the country is heading towards bankruptcy and is likely going down a road that would lead to depriving it of its economic sovereignty. Some figures raise questions about the firmness of the plan. For example, it is estimated that the cost of the Syrian exodus to Lebanon is equivalent to $25 billion, an uncertain number that combines the cost of the impact of the Syrian crisis on tourism and trade with the cost of hosting refugees. The plan lacks the needed participatory approach required now more than ever, as there were no serious consultation with representatives of the professional and economic groups and unions or with civil and political bodies, except formal meetings that appear to merely satisfy the donors rather than engaging in a credible discussion with citizens, one that is undergoing a crucial moment in the Lebanese history, especially in light of a massive popular revolution.
To read the full commentary
This commentary is written by:
Nasser Yassin, Jamal Saghir, Mohamed Faour, Lea Bou Khater, Vivian Akiki, Albert Kostanian, Khalil Gebara, Ali Ahmad, Adeeb Nehme, and Ziad Abdel Samad.
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