Time is running out: the cabinet wants to adopt the economic recovery plan for the elections to the House of Representatives

The government of Nagib Mikati, which met for less than two hours in the Council of Ministers in the Grand Serail on Thursday to discuss a 21-item agenda, said it plans to finalize and approve its economic recovery plan ahead of May 15 parliamentary elections. that “time is running out”, as Lebanon has continued to flounder in a serious crisis since 2019.

With regard to the import of electricity from Jordan via Syria and that of wheat, mainly from Ukraine, the cabinet has not made any concrete progress despite the urgency.

In recent days, the main features of the economic recovery plan, which is part of a provisional agreement with the International Monetary Fund (IMF), have been leaked to the press and have attracted much criticism.

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“The economic recovery plan is expected to be adopted before the parliamentary elections as time is running out,” Information Minister Ziad Makari said in response to reporters as he left the meeting.

Capital Controls

This recovery plan should be part of the government’s recent preliminary deal with the IMF in a bid to reach a deal on $3 billion in financial support over four years, subject to serious reforms. The plan highlights the need for Parliament to pass a law restructuring the sector, another introducing formal capital controls and a third amending banking secrecy legislation.

“Linking capital control to the protection of (bank) deposits is a mistake. Capital control should have been introduced at the start of the financial crisis,” the prime minister said at the start of the meeting. “In order to present an economic recovery plan, we need to take this step (the introduction of formal capital controls) so that the money stays in Lebanon,” the head of government said.

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He then recalled that the IMF is “calling for a vote on a budget and the establishment of capital controls and (elimination) of banking secrecy, as well as the restructuring of banks”. “We cannot achieve recovery without taking these measures in full transparency,” warned Nagib Mikati. Finally, he recalled that the recovery plan “has not been approved by the Council of Ministers”. “We have been clear on this point and we are waiting for ministers’ comments and opinions on the document. We sent the text to Parliament yesterday so that MPs can only consult it and formulate their comments,” said Mr Mikati .

Parliamentary committees met yesterday to discuss the Capital Controls Bill in a stormy session, alongside angry demonstrations in the street near the House seat. The head of Parliament convened these committees next Tuesday for another meeting on the issue.

Maize

As for wheat, Lebanon is deeply concerned about its supply of this vital commodity, in the context of the Russian invasion of Ukraine, Beirut imports about 60% of its wheat needs from Kiev. These concerns have panicked many consumers in recent weeks who have rushed to bakeries, which are out of stock. At its last meeting, the cabinet decided to allocate $15 million from its IMF Special Drawing Rights (SDRs) for wheat imports.

“I have requested an additional $21 million so that we can guarantee the necessary quantities of wheat for the next seven to eight months, but it has not been approved,” said Economy Minister Amine Salam, in response to a question from the journalist of our English language publication L’Orient Today, Kabalan Farah, on site. The minister wanted to be reassuring, but assured that the authorities “do not intend to lift subsidies on bread”.

Import of electricity

Another pressing issue is the import of electricity from Jordan, through Syria, as part of a US initiative, with Washington agreeing to make an exception to sanctions Lebanon could have imposed for collaborating with the regime. Bashar’s Syria al-Assad. This deal is to be financed by the World Bank, but this aspect is still not settled, as Lebanon is plunged into darkness for long hours every day.

Before the session, Energy Minister Walid Fayad told the press: “The agreement has been reached and we have done our duty, but there is a delay in funding. But this funding has not been rejected as stated.” citing some media reports that the World Bank refused to fund the deal. Mr Fayad believed that “the ball is in the court of the US government and the World Bank”. The energy minister insisted he had not been officially notified of the delay in funding, while revealing that a meeting held last Friday did not deliver the “positive results expected”. “They (the World Bank) continue to study ‘the political relevance of the project’,” concluded Mr Fayad, without specifying what he means by this.

The Minister of Information, for his part, has not provided any information on this, as the government is unlikely to have made any progress on this point.

Finally, Health Minister Firas Abiad indicated that £14 billion from the budget’s reserves has been transferred to the Ministry for the benefit of government hospitals, the sector which has been experiencing a serious crisis, especially since the start of the coronavirus pandemic in 2020 .

The government of Nagib Mikati, which met for less than two hours in the Council of Ministers in the Grand Serail on Thursday to discuss a 21-item agenda, said it plans to finalize and approve its recovery plan ahead of the May 15 parliamentary election. “time is running out” as Lebanon continues to find itself in a serious crisis since…

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