Lebanon ‘s New Finance Minister Meets with IMF Officials

(Source: AFP)

Beirut: The new finance minister of debt-laden Lebanon met with an official from the International Monetary Fund today. He said it was a “courtesy visit” and not a rescue operation.

Ghazi Wazni’s meeting with IMF Deputy Executive Director Sami Geadah came when Lebanon was grappling with its worst economic crisis since the 1975-1990 civil war.

The meeting served to “congratulate Lebanon on forming a new government,” Wazni later said on Twitter.

He had told AFP earlier that it was “a courtesy visit … to meet the IMF team”.

“The discussions will not focus on an economic rescue plan that is being prepared (separately) within the government,” he added.

There follows a meeting yesterday between Wazni and a World Bank delegation led by its regional director Saroj Kumar Jha.

Wazni took over as Minister of Finance on Tuesday with the formation of a long-awaited cabinet that faces major economic and political challenges.

The previous government resigned on October 29, two weeks after the start of a nationwide protest movement demanding the removal of politicians who were believed to be incompetent and corrupt.

Wazni comes in at a time when the falling Lebanon pound has lost over a third of its value against the dollar in the parallel market.

Lebanese banks are tightening restrictions on dollar transactions in the face of the liquidity crisis.

The economic downturn has raised questions as to whether Lebanon will turn to the IMF for a bailout – an option the government has not yet commented on, but some officials consider it inevitable.

Last month, former Prime Minister Saad Hariri discussed with the heads of the IMF and the World Bank about a possible economic bailout, which further fueled speculation about a bailout.

If Lebanon turns to the IMF, it may need to increase its VAT, cut subsidies to the state electricity company, tackle rampant corruption, and implement a number of structural reforms, as provided in previous IMF recommendations.