Lebanese Caretaker Prime Minister Najib Mikati stated yesterday that the country’s inability to pass a number of essential economic laws to help the nation heal the economic harms the country’s long-term economic integrity.
The Lebanon‘s currency has lost over ninety percent of its value since the onset of the financial crisis four years ago. The condition has also paralyzed the banking sector and frozen depositors’ funds. The damage in the financial industry are estimated by authorities to be around $70 billion.
Najib Mikati said that in order to pass long-delayed measures to reorganize the financial system and reform banks in one fell swoop, lawmakers should call a special meeting.
Four years have gone, according to the caretaker PM, without a single proposed financial reform act turning into a law. “All these need solutions immediately – if they are not resolved and the parliament does not convene and make it all some kind of one package to be decided on, there won’t be economic stability in the country,” Mikati stressed in the parliament.
According to Mikati, if nothing is done, the country would move “from one crisis to another.”
After long years of wasteful expenditure and nepotism among the ruling class, the crisis finally broke out. A part of the corruptions took place by people that ran banks that made substantial debts.
The ramifications will be extremely harmful on the economy of the nation if “we continue to put off adopting the legislation.” According to a recent IMF report, if current trends continue, public debt may exceed 547% of GDP by 2027.
Lebanon and the IMF inked a staff-level deal in 2022, but Lebanon hasn’t fulfilled the requirements to get a complete program. That is considered as essential for rehabilitation from one of the worst financial crises in history.
Mikati and a Hope for Resolution
According to Mikati, the debt-ridden nation was committed to to the IMF deal and the financial changes required to assist secure the vital funding from donors required for rehabilitation.
According to MP the chair of the parliamentary work and energy committee, several members who turned down the legislative session had concerns about the Sovereign Wealth Fund Bill’s possible inclusion of loopholes and bias.
Sajih Atiyeh stated that the measure has not yet been discussed in subcommittee.
Meanwhile, another member of parliament claimed that the new capital control law roughly “safeguards the interests of banks.”
Salim Al-Sayegh, a third member of the Lebanese parliament, said: “In the absence of a president, the legislative session disrupts the balance of powers, and we seek a dialogue led by the president.”
A group of customers protested the attempt to adopt capital control laws and tried to prevent MPs from entering the building by blocking the entrance.
The 2023 budget for was approved by the interim administration on this week. The requests from several ministers to change their allocations have caused the budget deficit to increase from 18.5 percent to almost 24 percent.
As a result of a power outage on Thursday, Mikati orally promised a significant power supplier that it “will receive $7 million of its dues monthly, in exchange for the immediate operation of the power plants.”
When asked where the money to pay Primesouth came from, Mikati responded, “the emerging crisis is being resolved.”