While Lebanon tries to work out its problem with its financial loss figures, delaying talks with the International Monetary Fund (IMF), the economy continues to slide downward with no clear solution in sight.
But the solution that seemed highly unlikely in the recent weeks may be closer than expected. As sources told Reuters, Lebanon’s financial adviser, the asset management company Lazard, is set to visit the country soon.
The company, which has a history of advising countries such as Argentina out of their severe financial crises, had helped Lebanon create its current rescue plan earlier this year.
But after the IMF approved of the government plan’s estimates of Lebanon’s financial losses, a parliamentary committee backed by the country’s major political parties disagreed with the government’s approach and presented much lower estimates for these losses.
This disagreement inhibited progress with the IMF, at one point prompting it to warn Lebanese officials against lowering Lebanon’s losses and advise them to rally behind the government’s plan.
Since then, Lebanon-IMF negotiations have been relatively stagnant.
With Lazard’s expected visit, reportedly around next week, the government plan is expected to be adjusted to reach an understanding between Lebanon and the IMF.
“Lazard will come possibly next week to see if they can adjust the government plan and work on a compromise acceptable to the IMF. They will do any adjustment based on the government plan,” a source told Reuters.
This unexpected turn of events may provide the needed catalyst to finally push the negotiations to a fruitful place and Lebanon closer to unlocking the IMF’s bailout, which is crucial for Lebanon’s economic restructuring.
The longer this is delayed by Lebanese officials, however, the more abundant will poverty, hunger, and crime become, and the harder it will be to solve Lebanon’s compounding problems.
