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)
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Updated 15 September 2021
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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.”


Russian-made plane engine catches fire after landing in Turkiye’s Antalya

Rusian Sukhoi Superjet 100 airliner takes off in Zhukovsky, Moscow. (AFP)
Updated 15 sec ago
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Russian-made plane engine catches fire after landing in Turkiye’s Antalya

  • All 89 passengers and six crew were safely evacuated from the Sukhoi Superjet 100 passenger plane that had come from the Russian Black Sea resort of Sochi, the ministry said

ISTANBUL: The engine of a Russian-made passenger plane caught fire after landing at southern Turkiye’s Antalya Airport on Sunday, the Turkish transport ministry said in a statement.
The ministry said landings at the airport were suspended until 0300 local time (0000 GMT) while authorities towed the plane from the runway.
All 89 passengers and six crew were safely evacuated from the Sukhoi Superjet 100 passenger plane that had come from the Russian Black Sea resort of Sochi, the ministry said.
A video shared on social media by Airport Haber news website showed emergency units responding at the site of the fire, with flames and smoke coming out of the aircraft’s engine.
Videos shared by the transport ministry following the incident showed the aircraft with fire extinguishing foam underneath as firefighters continue to spray the left-side engine to cool it down.
According to the Antalya Airport website, an Azimuth Airlines plane from Sochi landed at 1825 GMT.

 


War-hit Lebanon suspends in-person classes in Beirut area til end of December

Smoke billows over Beirut’s southern suburbs after an Israeli strike, seen from Baabda.
Updated 1 min 23 sec ago
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War-hit Lebanon suspends in-person classes in Beirut area til end of December

  • Education minister announced “the suspension of in-person teaching” in schools, technical institutes and private higher education institutions in Beirut
  • Suspension of in-person teaching also applies to parts of neighboring Metn, Baabda and Shouf districts starting Monday

BEIRUT: Lebanon has suspended in-person classes in the Beirut area until the end of December, the education ministry announced Sunday, citing safety concerns after a series of Israeli air strikes this week.
Education Minister Abbas Halabi announced in a statement “the suspension of in-person teaching” in schools, technical institutes and private higher education institutions in Beirut and parts of the neighboring Metn, Baabda and Shouf districts starting Monday “for the safety of students, educational institutions and parents, in light of the current dangerous conditions.”
Earlier on Sunday, Lebanese state media reported two Israeli strikes on Beirut’s southern suburbs, 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.


Legal threats close in on Israel’s Netanyahu, could impact ongoing wars   

Updated 15 min 51 sec ago
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Legal threats close in on Israel’s Netanyahu, could impact ongoing wars   

  • The trial opened in 2020 and Netanyahu is finally scheduled to take the stand next month after the court rejected his latest request to delay testimony on the grounds that he had been too busy overseeing the war to prepare his defense

JERUSALEM: Prime Minister Benjamin Netanyahu faces 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, analysts and officials say. The International Criminal Court (ICC) 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.
Netanyahu has denounced the court’s decision as antisemitic and denied charges that he and Gallant targeted Gazan civilians and deliberately starved them.
“Israelis get really annoyed if they think the world is against them and rally around their leader, even if he has faced a lot of criticism,” said Yonatan Freeman, an international relations expert at the Hebrew University of Jerusalem.
“So anyone expecting that the ICC ruling will end this government, and what they see as a flawed (war) policy, is going to get the opposite,” he added.
A senior diplomat said one initial consequence was that Israel might be less likely to reach a rapid ceasefire with Hezbollah in Lebanon or secure a deal to bring back hostages still held by Hamas in Gaza.
“This terrible decision has ... badly harmed the chances of a deal in Lebanon and future negotiations on the issue of the hostages,” said Ofir Akunis, Israel’s consul general in New York.
“Terrible damage has been done because these organizations like Hezbollah and Hamas ... have received backing from the ICC and thus they are likely to make the price higher because they have the support of the ICC,” he told Reuters.
While Hamas welcomed the ICC decision, there has been no indication that either it or Hezbollah see this as a chance to put pressure on Israel, which has inflicted huge losses on both groups over the past year, as well as on civilian populations.

IN THE DOCK The ICC warrants highlight the disconnect between the way the war is viewed here and how it is seen by many abroad, with Israelis focused on their own losses and convinced the nation’s army has sought to minimize civilian casualties.
Michael Oren, a former Israeli ambassador to the United States, said the ICC move would likely harden resolve and give the war cabinet license to hit Gaza and Lebanon harder still.
“There’s a strong strand of Israeli feeling that runs deep, which says ‘if we’re being condemned for what we are doing, we might just as well go full gas’,” he told Reuters.
While Netanyahu has received wide support at home over the ICC action, the same is not true of the domestic graft case, where he is accused of bribery, breach of trust and fraud.
The trial opened in 2020 and Netanyahu is finally scheduled to take the stand next month after the court rejected his latest request to delay testimony on the grounds that he had been too busy overseeing the war to prepare his defense.
He was due to give evidence last year but the date was put back because of the war. His critics have accused him of prolonging the Gaza conflict to delay judgment day and remain in power, which he denies. Always a divisive figure in Israel, public trust in Netanyahu fell sharply in the wake of the Oct. 7, 2023 Hamas assault on southern Israel that caught his government off guard, cost around 1,200 lives.
Israel’s subsequent campaign has killed more than 44,000 people and displaced nearly all Gaza’s population at least once, triggering a humanitarian catastrophe, according to Gaza officials.
The prime minister has refused advice from the state attorney general to set up an independent commission into what went wrong and Israel’s subsequent conduct of the war.
He is instead looking to establish an inquiry made up only of politicians, which critics say would not provide the sort of accountability demanded by the ICC.
Popular Israeli daily Yedioth Ahronoth said the failure to order an independent investigation had prodded the ICC into action. “Netanyahu preferred to take the risk of arrest warrants, just as long as he did not have to form such a commission,” it wrote on Friday.

ARREST THREAT The prime minister faces a difficult future living under the shadow of an ICC warrant, joining the ranks of only a few leaders to have suffered similar humiliation, including Libya’s Muammar Qaddafi and Serbia’s Slobodan Milosevic.
It also means he risks arrest if he travels to any of the court’s 124 signatory states, including most of Europe.
One place he can safely visit is the United States, which is not a member of the ICC, and Israeli leaders hope US President-elect Donald Trump will bring pressure to bear by imposing sanctions on ICC officials.
Mike Waltz, Trump’s nominee for national security adviser, has already promised tough action: “You can expect a strong response to the antisemitic bias of the ICC & UN come January,” he wrote on X on Friday. In the meantime, Israeli officials are talking to their counterparts in Western capitals, urging them to ignore the arrest warrants, as Hungary has already promised to do.
However, the charges are not going to disappear soon, if at all, meaning fellow leaders will be increasingly reluctant to have relations with Netanyahu, said Yuval Shany, a senior fellow at the Israel Democracy Institute.
“In a very direct sense, there is going to be more isolation for the Israeli state going forward,” he told Reuters.

 


Hezbollah says destroyed 6 Israeli tanks in Lebanon’s south

Israeli army tanks maneuver in a staging area in northern Israel near the Israel-Lebanon border, Tuesday, Oct. 1, 2024. (AP)
Updated 28 min 23 sec ago
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Hezbollah says destroyed 6 Israeli tanks in Lebanon’s south

  • In the area of Bayada, a village on the Mediterranean coast less than 10 kilometers (six miles) from the border, the NNA reported that “a convoy of 30 Israeli military vehicles” was retreating inland after Hezbollah had destroyed their tanks

BEIRUT, Lebanon: Hezbollah said its fighters destroyed six Israeli army tanks in Lebanon’s southern border area on Sunday, most of them near a coastal village where the group and state media reported fierce battles.
The official National News Agency (NNA) said intense ground fighting was underway in several parts of south Lebanon, about two months since limited exchanges of fire escalated into a full-blown war.
In the area of Bayada, a village on the Mediterranean coast less than 10 kilometers (six miles) from the border, the NNA reported that “a convoy of 30 Israeli military vehicles” was retreating inland after Hezbollah had destroyed their tanks.
A Hezbollah statement said fighters from the group “destroyed” five Israeli tanks on the eastern outskirts of Bayada, including one that had “attempted to advance to withdraw one of the destroyed tanks.”
In a separate statement, Hezbollah said it knocked out a sixth Merkava tank in the Deir Mimas area overlooking Israel’s far north, and where the Lebanese group claimed rocket fire at Israeli soldiers on Sunday.
George Nakad, mayor of Deir Mimas, was quoted by the NNA as saying that Israeli forces had “set up a checkpoint” on a road between his village and a neighboring one.
Further east, Hezbollah said its fighters launched four rocket salvos at Israeli troops east of Khiam, a border town that has seen intensifying battles in recent weeks.
Khiam has symbolic significance, as it had hosted a notorious prison run by the South Lebanon Army, an Israeli proxy militia, during Israel’s 22-year occupation of south Lebanon that ended in 2000.
The NNA reported “an accelerated Israeli ground operation in Khiam” after a “difficult” night of fighting.
Israeli tanks have been operating east of Khiam for more than three weeks, with the NNA reporting on Tuesday that the tanks had moved north of the town.
On Sunday it also reported clashes in other areas of the border strip including Bayada, and said that an Israeli strike had cut traffic between the town of Marjayoun and the major southern city of Nabatiyeh.
On Saturday, the NNA had said Israeli troops tried to penetrate the Bayada area, near Tyre city, in order to encircle the town of Naqura where UN peacekeepers are based.
On September 23, Israel launched an intense air campaign in Lebanon, mainly targeting Hezbollah bastions in the south and east and in south Beirut, later sending ground troops across the border.
It followed nearly a year of limited cross-border exchanges initiated by Hezbollah in support of Palestinian ally Hamas after its October 7, 2023 attack on Israel sparked the Gaza war.
The conflict has killed at least 3,754 people in Lebanon since October 2023, according to the health ministry, most of them since September.
On the Israeli side, authorities say at least 82 soldiers and 47 civilians have been killed.

 


UN envoy concerned over expansion of conflict

United Nations Special Envoy for Syria Geir Pedersen talks to reporters in the Syrian capital Damascus, on May 22, 2022. (AFP)
Updated 24 November 2024
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UN envoy concerned over expansion of conflict

  • The Israeli military has intensified its strikes on targets in Syria since its conflict with Hezbollah in neighboring Lebanon escalated into full-scale war in late September after almost a year of cross-border hostilities

DAMSCUS: The UN special envoy for Syria said on Sunday that it was “extremely critical” to end the fighting in Lebanon and Gaza to avoid the country being pulled into a regional war.
“We need now to make sure that we have immediately a ceasefire in Gaza, that we have a ceasefire in Lebanon, and that we avoid Syria being dragged even further into the conflict,” said Geir Pedersen ahead of a meeting with the Syrian foreign minister in Damascus. “We agree that it is extremely critical that we de-escalate so that Syria is not further dragged into this,” he said.
Since Syria’s civil war erupted in 2011, Israel has carried out hundreds of strikes in the country, mainly targeting the army and Iran-backed groups.
The Israeli military has intensified its strikes on targets in Syria since its conflict with Hezbollah in neighboring Lebanon escalated into full-scale war in late September after almost a year of cross-border hostilities.
The Syrian Observatory for Human Rights war monitor said Israeli strikes on the city of Palmyra earlier in the week killed 105 people, the vast majority of them pro-Iran fighters, in the deadliest such attack on radical groups to date.
Israel rarely comments on individual strikes in Syria but has repeatedly said it will not allow Iran to expand its presence in the country.