Lebanese civic organization approaches IMF with principles needed for recovery

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Kulluna Irada, a Lebanese civic organization for political reform, released an open letter on Wednesday outlining 10 principles to the IMF, raising concerns about upcoming financing talks with the Lebanese government.

He addressed the principles on which these discussions must be based in order to respond to the needs and demands of the population.

The letter began with: “The Lebanese are suffering from a socio-economic catastrophe of almost unprecedented global scale and severity. We hold the ruling class – a coalition of sectarian leaders backed by a militia, with a complicit financial sector leadership – accountable.

The organization spoke of the crisis, describing it as resulting from nepotism and corruption, adding that the consequences are “mass unemployment, poverty and brain drain”.

The 10 principles set for future discussions, as the letter states, “carry great responsibility for the IMF, whose intervention in the Lebanese crisis will go down in the annals of history, and should in no way contribute to further reinforce an odious debt and the perpetuation of an illegitimate regime, especially in the run-up to the next legislative elections.

The 10 principles are:

1- “A holistic and sustainable framework supported by an adequate governance structure: The authorities’ approach to the crisis relied on ad hoc short-term measures that proved ineffective and unfair.

2- “The Central Bank restructuring process must be entrusted to a new management, committed to good governance and transparency and capable of restoring confidence and credibility at the top of the banking system.

3- “The restructuring of the public debt and that of the banking system and the Central Bank are essential for stabilization and long-term recovery.

4- “Wholesale Banking Reform and Independent Task Forces. This includes abolishing bank secrecy, resizing the sector and providing incentives to banks to support long-term growth. The restructuring process should be entrusted to an independent authority.

5- “The fair distribution of financial losses is a priority. Any bailout plan is unacceptable, and the allocation of financial losses should follow a “cascading loss allocation” starting with equity, in line with best practice. »

6- “Properties, public enterprises and gold are strategic resources that must be used to ensure social protection and economic recovery. That said, gold assets, technically on the Central Bank’s balance sheet, could be partially allocated to protecting the savings of certain categories of small depositors as part of an overall plan.

7- “Protection of small depositors and pension funds: The allocation of losses must be progressive to protect small depositors. Deposits corresponding to pension funds (unions, professional orders, CNSS, etc.) must be protected and treated as first-class creditors.

8- “A forensic audit must be carried out on the accounts of all shareholders, members of the boards of directors, members of the general management of financial institutions and the Central Bank, to determine whether undue or excessive profits have been made, or if the transfers took place after October 2019.”

9- “A budgetary policy that favors growth and social protection: based on universal access to health care and education. Key infrastructure to support economic growth: electricity, telecommunications and public transport, a transformed civil service made efficient and transparent, and security forces capable of national defense.

10- “Priorities for tax reform should be set to reverse the severe social haemorrhage, ensure a fair distribution of losses and secure a sustainable economic recovery.”

Needless to point out that civic organizations and the Lebanese people are well aware of the solutions to be implemented to save the country from its continued collapse. The problem is not the lack of solutions but the reluctance of those in power to implement them.

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