IMF sending $1bn loan to Lebanon but ‘funds might be wasted’

A general view shows the ravaged port of Lebanon’s capital Beirut, on September 14, 2021. (AFP)
Short Url
Updated 15 September 2021
Follow

IMF sending $1bn loan to Lebanon but ‘funds might be wasted’

  • Money will be deposited into Lebanon’s Central Bank and is supposed to be used to activate the national cash card scheme
  • Politicians warned against the possible misuse of IMF loan: ‘This is the first test for Mikati’s government and the funds must be spent carefully’

BEIRUT: Lebanon is suffering through a dire financial crisis and while an interest-free injection of funds from the International Monetary Fund will help, many are concerned with how the state will appropriate the money. 

The country’s finance ministry was informed by the IMF that Lebanon will receive approximately $1.1 billion in special drawing rights or SDRs, with $860 million marked for 2021 and $275 million for 2019. The money will be deposited into the accounts of Lebanon’s Central Bank (BDL).

The country is depending on this allocation to address the financial and economic crises that have ravaged Lebanon for the past two years. The money will also be used to activate the national cash card scheme, which will benefit 700,000 families in Lebanon amid the decision to completely lift subsidies on fuel. Funding the cash card will require $566 million annually.

SDRs are not controlled or conditioned and they are interest-free, financial expert Walid Abu Sleiman said. The funds are usually granted in a case of crisis as Sleiman said Lebanon was the recipient of these SDRs because of the coronavirus.

“The risky part is that the allocation will be handled by the state, represented by BDL, and the government could spend it in coordination with BDL, which means that these funds might be wasted,” Sleiman told Arab News.

He compared it to when Lebanon received a $225 million loan from EDL (Electricité du Liban) but the funds were spent in less than a month, which left the Lebanese with no access to electricity.

“The sum will be received by BDL, not the government,” Sleiman said. “It must be used in projects that bring revenues for the Lebanese people because this loan will be paid back from their money.”

Lebanon’s dollar reserves have almost dried up. BDL informed the ruling class in August that it was no longer capable of opening new credit lines to import or subsidize fuel.

The registration process for the cash card platform was supposed to kick off on Wednesday. However, Lebanon’s media outlets reported that “technical problems” might have hindered the launch of the platform and added that “funding for the card is not guaranteed to be provided from the IMF loan.”

It was an all-too-common response to yet another financial blunder in the cash-strapped country. On Wednesday, politicians warned against the possible misuse of IMF’s allocation.

“What is needed is a legal course for all the expenditures,” Hezbollah MP Hassan Fadlallah said. “It must also be subject to the government’s decisions in line with the controls defined by the laws in force.”

The new government, led by prime minister Najib Mikati, is still busy with the handover process from Hassan Diab’s government and forming a ministerial statement that the cabinet will announce on Thursday. Giving the new government a vote of confidence depends on this statement.

Meanwhile, the UN Office for the Coordination of Humanitarian Affairs said last week more than 80 percent of Lebanon’s population has slipped below the poverty line, a rate much higher than last year, which was estimated at 50 percent.

The Lebanese are struggling to make ends meet after the local currency lost more than 90 percent of its value on the black market. 

Regarding the need for a legal course to use IMF’s loan, Sleiman said: “There is no need for a legal course for issues like stabilizing the dollar exchange rate and subsidies. The parliament has already approved the cash card and allowed the cabinet to borrow more than $560 million, meaning that the government can benefit from the IMF loan knowing that the funds will not be controlled.”

But if the funds were used to build a power generating plant, for example, a legal course would be required, Sleiman said.

Economic expert Elie Yashoui said that IMF allocation has nothing to do with government formation.

“It is the first test for Mikati’s government and therefore, the funds must be spent carefully with a clear plan,” he said. 

“BDL should not consider that the allocation belongs to it. The allocation belongs to the Lebanese state, and the government must include it in the treasury and the budget of 2022. The sum should not be spent to finance the cash card or to import or subsidize any item.”

Lebanon’s Kataeb Party warned against “the possible misuse of the loan by the current political class through new projects or electoral aid distributed through suspected projects and cards under the pretext of aid.”

The party said the structure of Mikati’s government “is incapable of making any reforms that can pull Lebanon out of its crises, as long as it is controlled by the same ruling class and as long as its priority is not the Lebanese people. The road map that guarantees the restoration of institutions starts with negotiations with the IMF.”


Israel names Netanyahu ally as US ambassador

Israeli PM Benjamin Netanyahu. (File/AFP)
Updated 6 min 55 sec ago
Follow

Israel names Netanyahu ally as US ambassador

  • A former adviser to Netanyahu, Leiter, 65, is originally from the United States and currently lives in a settlement in the occupied West Bank

JERUSALEM: The Israeli government said Sunday it had approved the nomination of Yechiel Leiter, an ally of Prime Minister Benjamin Netanyahu, as the country’s ambassador to the United States.
The announcement comes after US President-elect Donald Trump named hard-line conservative Mike Huckabee as his choice for US ambassador to Israel under his incoming administration.
“The government has unanimously approved the appointment of Dr. Yechiel Leiter as ambassador to the United States,” the foreign ministry said in a statement.
A former adviser to Netanyahu, Leiter, 65, is originally from the United States and currently lives in a settlement in the occupied West Bank.
Close to the US Republican Party, Leiter used to be one of the leaders of the Yesha Council, an umbrella group representing Israeli settlers in the West Bank in the 1990s.
He is also a member of Netanyahu’s Likud party and currently works as a strategic adviser to Israeli think tanks.
His son, Moshe Leiter, was killed in combat in November 2023 in the Gaza Strip, where war erupted between Israel and Palestinian militant group Hamas after its attack on southern Israel in October last year.
Yechiel Leiter will take on the ambassador role after Trump’s inauguration next year, succeeding Mike Herzog, President Isaac Herzog’s brother, who was appointed in 2021.
Leiter is a fierce critic of US President Joe Biden, slamming “American pressure” during the war in Gaza in an interview with private Israeli channel Tov in January.
Israel welcomed Huckabee’s nomination this month, as he is a stalwart supporter of the country’s government.
In 2017, he was present in Maale Adumim for the expansion of one of Israel’s largest settlements in the West Bank.


Israel’s PM condemns settler violence on soldiers in West Bank

Updated 11 sec ago
Follow

Israel’s PM condemns settler violence on soldiers in West Bank

  • The International Criminal Court stunned Israel on Thursday by issuing arrest warrants for Netanyahu and his former defense chief Yoav Gallant for alleged war crimes and crimes against humanity in the 13-month-old Gaza conflict

JERUSALEM: Prime Minister Benjamin Netanyahu condemned on Sunday Jewish settlers who attacked senior Israeli military officers including Maj. Gen. Avi Bluth, the head of the army’s Central Command in the occupied West Bank.
The Israeli army said that a group of settlers trailed Bluth and other officers in the West Bank city of Hebron on Friday, blocked their exit and hurled abuse at them. It added that five rioters had been arrested.
“All violence directed against Israeli military officers and soldiers must be dealt with to the fullest extent of the law,” the prime minister’s office said in a statement.
Some of the crowd yelled “traitor” at Bluth, who had visited Hebron to attend an annual religious event in the city.

BACKGROUND

On Saturday, dozens of settlers hurled stones at Israeli troops near the West Bank settlement of Itamar, police said.

On Saturday, dozens of settlers, some of them masked, hurled stones at Israeli troops and border police near the West Bank settlement of Itamar, police said.
There has been a general surge in violence across the West Bank since the Oct. 7, 2023 attack by Hamas militants on southern Israel.
Palestinians have been repeatedly targeted by settlers, who want Israel to annex the West Bank. The Israeli military is meant to protect the local Palestinians, but Bluth acknowledged in August that the army had failed to safeguard civilians when settlers went on the rampage in one town. Palestinians say they are often left to the mercy of the settlers, with soldiers doing little or nothing to rein them in.
Some settler youth groups reject the jurisdiction of the Israeli military in areas that they see as under their control and have attacked Israeli forces.
Settler leaders have said violence has no place in their movement and have called for offenders to be prosecuted.
Most countries deem Jewish settlements built on land Israel captured in a 1967 war to be illegal. Israel disputes this and cites historical and biblical ties to the land. Palestinians want the West Bank as part of a future independent state.
Separately, analysts and officials have said Israeli Prime Minister Benjamin Netanyahu is facing legal perils at home and abroad that point to a turbulent future for the Israeli leader and could influence the wars in Gaza and Lebanon.
The International Criminal Court stunned Israel on Thursday by issuing arrest warrants for Netanyahu and his former defense chief Yoav Gallant for alleged war crimes and crimes against humanity in the 13-month-old Gaza conflict.
The bombshell came less than two weeks before Netanyahu is due to testify in a corruption trial that has dogged him for years and could end his political career if he is found guilty. He has denied any wrongdoing.

While the domestic bribery trial has polarized public opinion, the prime minister has received widespread support from

across the political spectrum following the ICC move, giving him a boost in troubled times.

 


Saudi companies exhibiting at ArabPlast in Dubai to showcase petrochemical innovations

Updated 24 November 2024
Follow

Saudi companies exhibiting at ArabPlast in Dubai to showcase petrochemical innovations

  • ArabPlast will feature a diverse range of products, technologies and solutions that shape the future of plastics and petrochemicals in the region

LONDON: Saudi petrochemical firms will showcase their products and innovative solutions at the 17th ArabPlast, hosted by the Dubai World Trade Center, the Emirates News Agency — WAM —reported. 

ArabPlast, an international trade show that takes place from Jan. 7-9, is an important event in the calendar of companies working in the plastics, recycling, petrochemicals, packaging and rubber industries.  

In 2025, ArabPlast will host 12 national pavilions and 750 exhibitors from a total of 35 countries, including companies from Saudi Arabia, Austria, China, Egypt, Germany, Italy, India, Switzerland, Jordan, UAE and the rest of the GCC countries.  

They will showcase “a diverse range of products, technologies and solutions that shape the future of plastics, petrochemicals and rubber sectors in the region,” WAM reported. 

Nidal Mohammed Kadar, director of ArabPlast, said that the event would also feature the “latest developments in robotics and artificial intelligence technologies in the field of recycling,” which will contribute to sustainability. 

Sadiq Al-Lawati, executive director of Polymers Marketing at OQ Oman, said that ArabPlast will focus on “sustainable, environmentally friendly solutions” as the global demand for plastic increases in industrial sectors, such as construction, food and beverage, aviation, automotive, health care and sports. 

Alongside the exhibitions, hundreds of professionals and decision-makers will discuss the latest solutions and challenges that the plastic and petrochemical industries are facing in the Arab region.  


Two Israeli strikes hit south Beirut: Lebanon state media

Smoke rises from the site of an Israeli airstrike that targeted an area in Beirut’s southern suburbs on November 24, 2024. (AFP)
Updated 24 November 2024
Follow

Two Israeli strikes hit south Beirut: Lebanon state media

  • “Israeli warplanes launched two violent strikes on Beirut’s southern suburbs in the Kafaat area,” official National News Agency said
  • The raids “caused massive destruction over a large geographical area” of the Kafaat district, NNA said

BEIRUT: Lebanese state media reported two Israeli strikes on Beirut’s southern suburbs on Sunday, about an hour after the Israeli military posted evacuation calls online for parts of the Hezbollah bastion.
“Israeli warplanes launched two violent strikes on Beirut’s southern suburbs in the Kafaat area,” the official National News Agency said.
The southern Beirut area has been repeatedly struck since September 23 when Israel intensified its air campaign also targeting Hezbollah bastions in Lebanon’s east and south. It later sent in ground troops to southern Lebanon.
AFPTV footage showed grey smoke billowing over south Beirut.
The raids “caused massive destruction over a large geographical area” of the Kafaat district, NNA said.
Earlier Sunday, Israeli military spokesman Avichay Adraee warned on social media platform X that the military would strike “Hezbollah facilities and interests” in the Hadath and Burj Al-Barajneh districts, also sharing maps of the areas to be evacuated.
Full-on war erupted following nearly a year of limited exchanges of fire initiated by Iran-backed Hezbollah in support of its ally Hamas, after the Palestinian group’s October 7, 2023 attack sparked the Gaza war.


Israel records 160 launches fom Lebanon as Hezbollah targets Tel Aviv, south

Israeli security forces and people inspect a damaged house at a site hit by rockets fired from Lebanon in Rinatya village.
Updated 24 November 2024
Follow

Israel records 160 launches fom Lebanon as Hezbollah targets Tel Aviv, south

  • Medical agencies reported that at least 11 people were wounded, including a man in a “moderate to serious” condition

JERUSALEM: Israel’s army said Hezbollah fired around 160 projectiles into its territory from Lebanon on Sunday, with the group saying its attacks had targeted the Tel Aviv area and Israel’s south.
The Iran-backed group said in a statement that it had “launched, for the first time, an aerial attack using a swarm of attack drones on the Ashdod naval base” in southern Israel.
Later, it said it fired “a barrage of advanced missiles and a swarm of attack drones” at a “military target” in Tel Aviv, and had also launched a volley of missiles at the Glilot army intelligence base in the city’s suburbs.
The Israeli military did not comment on the specific attack claims when contacted by AFP.

But it said earlier that air raid sirens had sounded in several locations in central and northern Israel, including in the greater Tel Aviv suburbs.
It later reported that “approximately 160 projectiles that were fired by the Hezbollah terrorist organization have crossed from Lebanon into Israel.”
Some of the projectiles were shot down.
Medical agencies reported that at least 11 people were wounded, including a man in a “moderate to serious” condition.
AFP images from Petah Tikva, near Tel Aviv, showed several damaged and burned-out cars, and a house pockmarked by shrapnel.
The wave of projectiles follows at least four deadly Israeli strikes in central Beirut in the past week, including one that killed Hezbollah spokesman Mohammed Afif.
In a speech on Wednesday, Hezbollah chief Naim Qassem had said the response to the recent strikes on the capital “must be expected on central Tel Aviv.”
The Lebanese army, meanwhile, said that a soldier was killed on Sunday and 18 others injured, “including some with severe wounds, as a result of an Israeli attack targeting a Lebanese army center in Amriyeh.”
Though the Lebanese army is not a party to the war between Israel and Hezbollah, Israeli strikes have killed 19 Lebanese soldiers in the last two months, authorities have said.
Since September 23, Israel has intensified its Lebanon air campaign, later sending in ground troops after nearly a year of limited exchanges of fire initiated by Hezbollah in support of its ally Hamas after the Palestinian group’s October 7, 2023 attack, which sparked the Gaza war.
Lebanon’s health ministry says at least 3,670 people have been killed in the country since October 2023, most of them since September this year.