BEIRUT ( Associated Press) – Lebanon’s outgoing government on Friday approved a recovery plan to lift the Middle East nation out of its economic downturn, the country’s information minister said.
The development came during the last official cabinet meeting before a caretaker government was formed after last weekend’s parliamentary elections.
The plan is the first step on a difficult and complicated road with the ultimate goal of getting Lebanon out of the worst economic crisis in its modern history. The crisis, which began in October 2019, leading to nationwide protests, is rooted in decades of corruption and mismanagement.
However, Parliament is yet to approve the plan, which includes restructuring the country’s tough banking sector and amending decades-old banking secrecy laws.
The economic recovery plan is a major demand of the International Monetary Fund. Lebanon’s government last month struck a tentative agreement with the IMF for macroeconomic policies that could eventually pave the way for some relief for the beleaguered nation.
The IMF and the international community are demanding that Lebanon implement comprehensive economic and financial reforms to issue billions of dollars in loans and investments.
Information Minister Ziad Makari said Prime Minister Najib Mikati’s government had approved the plan, although there were some objections from ministers close to the Iran-backed terrorist Hezbollah group and its ally Amal, the faction led by parliament speaker Nabih Berry.
Mikati told reporters that the plan aims to protect small depositors while ways to protect large depositors will be discussed with the IMF. He did not provide any figures, but has said in the past that small depositors are those with $100,000 or less.
“The challenges facing our country call for a stronger administration and cooperation between all parties,” Mikati said in a clear message to incoming cabinet and newly-elected lawmakers.
“If we don’t fully implement the economic recovery plan, there will be more spending every day,” he said.
Lebanon defaulted on paying off its massive debt in March 2020, which at the time amounted to about $90 billion or 170% of the country’s GDP, making it one of the highest in the world.
The economic downturn has plunged three-quarters of the 6 million people into poverty, including one million Syrian refugees. The Lebanese pound has lost over 90% of its value.
Mikati’s government on Friday also approved funding of $35 million a month to buy drugs for cancer patients and people with chronic diseases for the next four months. The cabinet has also approved a hike in telecom prices from July.
Lebanese voters on Sunday elected a new parliament, with Hezbollah and its allies losing a majority in the 128-member legislature.
A new parliament should be convened in the coming weeks to elect a speaker of parliament. President Michel Aoun is expected to convene consultations with new legislators, who will then name a new prime minister.
The process is unlikely to be easy, with deep divisions in the legislature between the Hezbollah-led coalition, pro-Western groups and independents.
US State Department spokesman Ned Price said Washington urged those elected and political leaders to “heed and act seriously on the Lebanese people’s call for change and to take the necessary action to save the economy.” “
Price said the US also urges the rapid formation of a new government, which is committed to doing the hard work necessary to restore the confidence of the Lebanese people and the international community.