French roadmap sets blistering pace for Lebanon to change course

Beirut- A French roadmap for Lebanon’s next government calls for the immediate resumption of talks with the International Monetary Fund to fix the shattered economy and swift moves to fight graft and introduce other reforms that have been delayed for years.

The draft program was reviewed by Reuters on Wednesday, a day after French President Emmanuel Macron on a visit to Beirut delivered a stark message to Lebanon’s leaders: deliver on reforms by the end of October or face sanctions. 

Macron, whose pressure prompted Lebanon’s bickering leaders to agree on a new prime minister, has spearheaded international efforts to set Lebanon on a new course after decades of corrupt rule led to its deepest crisis since the 1975-1990 civil war. 

Lebanon’s banks are paralyzed, its currency has crashed and sectarian tensions are rising. On top of that, a huge port blast last month smashed a swathe of Beirut, killing more than 190 people and causing damage estimated at up to $25 billion. 

Reuters obtained the draft, which lays down detailed demands in line with Macron’s call for “credible commitments”, from two Lebanese officials. It was also reported by Lebanese media. 

The French presidency and Foreign Ministry did not immediately respond to a request for comment. 

Within 15 days of taking office, Lebanon’s new government should have set out a timeframe for IMF talks, the draft says. 

Within a month, it must implement an IMF-approved capital control law, start auditing the central bank and launch reforms to the electricity sector, which still cannot provide the nation of about 6 million people with 24-hour power. 

Also within a month, it should scrap current plans to build a controversial power station in Selaata, north of Beirut, and set up a national anti-corruption authority. 

Mustapha Adib, the former ambassador to Germany, was designated prime minister hours before Macron arrived. Before taking up the post, he must secure approval for his cabinet, which usually takes months. Macron set a two-week deadline. 

“The challenges are overwhelming and cannot bear delay,” Adib said after meeting politicians on Wednesday. 

‘SET OF SPOILS’ 

Lebanon’s talks with the IMF were launched in May but stalled in July as the government argued with the political parties and banks about the scale of losses in the banking system, which had largely funded a mountain of public debt. 

Mohanad Hage Ali of the Carnegie Middle East Center said the reforms would be a challenge for the political elite as it would make it tough to finance their networks of influence. 

“It shifts politics from the old regime, which looks at public services as a set of spoils, into a new economy in which the old practices cannot go on,” he said. 

But a senior political source said parties were making some concessions, partly due to French pressure. “It is ambitious but with (Macron) coaching Lebanon, it might work,” the source said. 

While Macron has led international diplomacy on Lebanon, other powers still have considerable sway, such as Iran via its ally the heavily armed Muslim Shi’ite party Hezbollah. 

Saudi Arabia, Iran’s regional rival, has exercised influence over Lebanon’s Sunnis and the United States, which lists Hezbollah as a terrorist group, is a major donor. 

Hezbollah official Mahmoud Qamati told Hezbollah’s al-Manar TV he saw regional and international cooperation over Lebanon. “Therefore this is an opportunity for this government to solve some of the crises at least, if not all of them,” he said

The Lebanese Forces, a Christian party staunchly opposed to Hezbollah, said expert ministers in the new government must act independently without having to consult a political master, unlike the previous cabinet now acting as caretaker. 

Gebran Bassil, head of the biggest Christian party, the Hezbollah-allied Free Patriotic Movement (FPM), said “if this government does not succeed it means we are going towards a bigger catastrophe”. 

REUTERS

the Road Map ( translated from Arabic)

Here is the text of the French road map for Lebanon that was issued by the French embassy in Beirut and distributed during the Pine Palace meeting, on Tuesday, between French President Emmanuel Macron and representatives of political parties and parliamentary blocs, a draft of the ministerial statement of the next government, under the title “A draft program for the new government.” Here it reads:

First – the Covid-19 pandemic and the humanitarian situation
The Lebanese government will make fighting this pandemic a priority:
1- Prepare and publish a pandemic control plan that includes support for the most vulnerable people.
2- Enhancing social protection for the benefit of the people.

Second – Consequences of the 4th August explosion and the reconstruction of Beirut
The Lebanese government will work on the following levels:
International humanitarian assistance:
Facilitating the process of putting the aid provided by the international community into practice in an expeditious, transparent and effective manner, bearing in mind that the United Nations coordinates this aid, according to the conclusions of the Beirut and Lebanese Support Conference on the ninth of August. This is done in full cooperation with the United Nations, in particular, by sharing information and assessing needs.

Governance of International Aid:
Specific governance will be put in place, in order for international assistance provided at the humanitarian level, in the context of the Beirut bomb response, as well as those designated to support structural reforms, to be delivered to the people in a transparent and traceable manner under the auspices of the United Nations.
The beginning of the reconstruction based on the recommendations of the report prepared by the World Bank in cooperation with the European Union and the United Nations (Rapid Damage and Needs Assessment in Beirut).

Port rehabilitation of Beirut:
Rapidly launching the solicitation of offers according to impartial procedures.
Impartial investigation: Conducting an impartial and independent investigation that enables the full truth to be established regarding the causes of the explosion, with the support of Lebanon’s international partners in the fields of cooperation and expertise, within reasonable time limits.

Third – reforms
The government will hold a regular exchange of views with civil society regarding its program and the reforms it contains.
Immediate resumption of negotiations with the International Monetary Fund.
Rapid approval of the preventive measures requested by the International Monetary Fund, including the law relating to Capital Control and auditing the accounts of the Banque du Liban (by immediately initiating the bank audit that was assigned to Oliver and Belief).
To this end, a timetable for work in negotiations with the International Monetary Fund will be approved and published within a period of fifteen days (see below).

1- Electricity sector
Measures to be taken immediately (within a month’s time limit).

• Appointing officials in the authority regulating the electricity sector within the framework of Law 462/2002 without amendments, while providing this authority with the actual capabilities to practice its work.
  Launching tenders for proposals regarding gas-generating plants, which are considered a priority to reduce the use of generators.
  The abandonment of the Salata factory project in its current form.

Measures to be taken in a very short period (within three months):
Announcing a timetable for raising tariffs in a gradual manner, provided that this affects firstly the most financially wealthy consumers.

2- Regulating the transfer of capital
Measures to be taken immediately (within one month)
Parliament should finalize and approve a draft law on Capital Control, provided that it be implemented immediately and over a period of four years, and that it has the approval of the various departments of the International Monetary Fund.

3- Governance, judicial and financial organization
Measures to be taken immediately (within one month)

• Holding a second meeting of the local follow-up group for the CEDRE conference and launching a website dedicated to following up the conference in all its parts (components of projects, financing and reforms), according to the terms of reference for the follow-up of CEDRE.
• The actual launch of a full audit of the BDL accounts.
  Carrying out judicial appointments (Supreme Judicial Council judges), financial (members of the Financial Markets Supervision Authority) and sectoral (bodies regulating the sectors of electricity, telecommunications and civil aviation), in accordance with transparent criteria based on competence.
  Parliament approves proposing a law on the independence of the judiciary.
  The launch of a study on public administration by an independent international institution (the World Bank or the Organization for Economic Cooperation and Development) with a specialized office.

4- Combating corruption and smuggling
Measures to be taken immediately (within one month)
Appointing members of the National Anti-Corruption Commission and granting it the necessary capabilities to carry out the tasks entrusted to it and the actual launch of its work.
Launching the process of acceding to the 1997 OECD Treaty on Combating Corruption in the World.
Immediate application of customs reforms.

Measures to be taken in the very short term (within three months)

• Establish control gates and strengthen supervision in the ports of Beirut and Tripoli and Beirut airport, as well as at other crossing points at the borders and reduce transactions, according to the deadlines followed in the administration.

5- Public procurement reform
Measures to be taken immediately (within one month)
Parliament will prepare, approve and implement a bill on public procurement reform.

• The government will grant the Higher Council for Privatization and Public Private Partnership (HC4P) the human and financial capabilities necessary to carry out its tasks.

6- Public finance
Preparing and voting on a corrective finance bill that explicitly clarifies the status of accounts for the year 2020 within a month.
Prepare and approve a harmonized budget for the year 2021 (before the end of 2020).

Fourth – Elections
The government will be keen to organize new legislative elections within a maximum period of one year.
The electoral law will be reformed with the full inclusion of civil society, allowing Parliament to be more representative of the aspirations of civil society.