A French envoy sent on behalf of foreign donors who pledged $11 billion in financing to Lebanon last year said on Tuesday the offers still stand, but Beirut must make progress with reforms and agreed infrastructure projects.
Chief among these expectations was for Beirut to approve the state’s 2020 budget this year. The 2019 budget was only approved half way through this year and Lebanon, until 2017, had spent 12 years without a budget.
“It is necessary for the proper functioning of the Lebanese economy to show that decisions are being taken, as this reassures the international community, Lebanese citizens and markets,” French diplomat Pierre Duquesne said after meeting Finance Minister Ali Hassan Khalil. “It is necessary to meet deadlines when making budgetary projections.”
Foreign governments and donor institutions last year pledged $11 billion in financing to Lebanon for a 12-year infrastructure investment program at the so-called Cedre conference in Paris, on condition that it carries out reforms.
On Monday Lebanese politicians declared a “state of economic emergency”, with Prime Minister Saad al-Hariri saying the government would take emergency measures to speed up economic reforms, including holding more meetings.
Fitch downgraded Lebanon’s credit rating to CCC on debt-servicing concerns 10 days ago.
With one of the world’s highest debt burdens, low growth and crumbling infrastructure, Lebanon’s economy is struggling and authorities are seeking to implement reforms to ward off a crisis.
Alongside reforms, Duquesne stressed that Lebanon itself needs to make progress on the agreed infrastructure projects.
“This is not the role of the international community. It will not do this in lieu of the Lebanese authorities.”
“I have learned that some projects have started and are making progress. So…, the international community is ready to help Lebanon,” he said.