Lebanese Economy Minister Says Slowdown Turns Country into “Failed State” | News from the world


The economic crisis in Lebanon has turned the country into a “failed state” but “there is light at the end of the tunnel”, according to the country’s Minister of Economy.

Speaking to Sky News, Raoul Nehme said he was 100% convinced that an international rescue plan would soon be agreed.

“We are living in a storm, a crisis which, in my opinion, is invisible to the world,” said Mr. Nehme.

“We are probably already above the 50% poverty line. Above the 50% poverty line, we have to do a lot to help people survive. “

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Asked if it is fair to describe the country as a failed state, he said: “Of course, it is a bankrupt state in the sense that the economic crisis is such that everything has collapsed at the bottom. Now the government is doing, in my opinion, whatever is necessary to come out of this crisis. ”

Nehme was appointed five months ago to a government of technocrats brought in to try to turn the economy around.

Raoul Nehme said he was convinced an international bailout would be agreed soon.

He spoke candidly about the failures of past administrations.

“We have been paying the price for mismanagement of the economy and the fiscal side of budget imbalances and the balance of payments for 30 years. And we are paying it today… many well-off people are now on the brink of poverty. ”

In recent months, Sky News has reported on the extent economic breakdown.

Families from all walks of life have seen their economies disappear, jobs lost and homes taken from them.

Electricity in the capital, Beirut, has been reduced to just two or three hours every 24 hours.

The head of the country’s largest public hospital warned of a power shortage and a reduction in medicine imports due to the massive inflation rate.

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Responding to the lack of electricity, the minister said it was a supply problem rather than a funding problem.

“It’s terrible, not only terrible, it’s absolutely incredible – it’s the supply chain that has broken down,” said Nehme.

The government has been in talks with the International Monetary Fund (IMF) for several months, but no bailout has yet been agreed.

IMF officials have said that financial assistance can only come when tax reforms are put in place.

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But even before that, Lebanese politicians seem unable to agree on the bailout mechanism and the size of the deficit.

The government plan presented to the IMF estimated losses in the financial sector at around 241 trillion Lebanese pounds. Converted, this represents between 50 and 55 billion pounds sterling, three times the country’s economic production (GDP) for this year.

However, some Lebanese politicians and bank bosses said this overestimated the size of the financial hole, leaving IMF chiefs exasperated. Mr Nehme admitted that it was up to Lebanese politicians to unite around a plan.

“Look, I think the IMF has made it clear that our numbers as a government are the right ones.

“I think that in the end, they (the Lebanese parliament) will have to accept it because the first: it’s the right numbers and number two: we have no choice but to go to the IMF . “

The economic crisis in Lebanon transformed the country into a
Government must control “a very difficult social situation,” says Nehme
Mr Nehme, right, spoke to Sky News's Mark Stone, left
Mr Nehme, right, spoke to Sky News’s Mark Stone, left

The odds of a bailout were, he said, “100%… that doesn’t mean accepting all IMF terms. But the IMF is the solution. ”

Some political figures, including Hassan Nasrallah, leader of the Iranian-backed Hezbollah movement, have suggested that the country “look east” to China and Iran for financial aid.

But the economy minister said no one would invest in Lebanon until a framework was in place through the IMF.

“I don’t think at first that China will give dollars without the IMF. No investor will put $ 1 if he is not sure how to get it back. Once the IMF is over and the reforms are over, my answer is: yes “I don’t think Iran in the current geopolitical situation is the solution,” he said.

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Mr Nehme said he appreciated the support already received from the EU and the UK.

“We are going to come to a situation where, for example, we need massive investments in electricity, transport, telecommunications, etc., and I hope the UK will be behind us,” he said. -he declares.

“The current situation is extremely critical. I think that the support of Europe and America and other countries, donor countries, potentially, is necessary today to help us with the social situation … we have to control a very difficult social situation. .

“It will be painful, it will take a long time, but it will happen. I am very confident that at the end of the tunnel the light is there. “


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