Omar al-Rassi, "Akhbar al-Yawm" agency
Will the IMF respond?
Former minister Raed Khoury emphasizes that "the rights of depositors are sacred in any plan to address the financial economic crisis in Lebanon,", so he called on the International Monetary Fund to consider dealing with Lebanon "OUT of the BOX", proposing a plan based on involving the private sector in state assets.
Khoury, who is returning from a visit to the United States of America, where he met with officials of the US administration and executives of the IMF and the World Bank who are following the Lebanese file, explained the details of his presentation via the "Akhbar Al-Yawm" agency.
First of all, Khoury points out that the IMF expressed its dissatisfaction with the lack of commitment of the authority in Lebanon to implement its demands, as the fund feels that the preliminary agreement signed last April is like a "process to buy time", as it has requested several laws, and so far only one or two laws have been approved, and no progress has been made.
Revealing that the IMF is not thinking of sending a delegation to Lebanon before next March if the desired progress is achieved, Khoury stresses that without an agreement with the IMF, the country cannot return to the global financial map.
Here Khoury explains that when any country defaults on debt payments or goes bankrupt, all the countries of the world entrust the IMF to negotiate with this country to develop a financial program until its situation is straightened out. After that, the fund puts its signature, which enables that country to open up to other countries for loans, aid or investments...Therefore, Lebanon has no choice but this path.
Speaking about the discussion he had with IMF executives during his visit to Washington, Khoury said: the IMF considers Lebanon to be a unique case that is not similar to the cases of other countries whose crises it has dealt with, so "I told them that Lebanon cannot be dealt with in the same way as the IMF deals with other countries".
It is known that the IMF requested the write-off of deposits exceeding one hundred thousand dollars (this cannot pass, whether at the level of citizens or deputies) and at the same time refuses to sell state assets, so it was Khoury's invitation to think outside the box, by "creation of VALUE", that is, the creation of non-existent value.
In this context, Khoury explains: if the assets of the state, for example, are estimated at twenty billion dollars, because they are in the hands of the state, then as soon as the private sector enters transparently, its value will increase to 60 billion. He said: I am not betting here on the plans of the state, but on the IMF imposing this requirement within its program for the Lebanese state, which pushes it towards implementation.
Considering that the IMF program in its current form will not be in the interest of Lebanon, Khoury points out that the involvement of the private sector in state property, especially through management, will be positive, as the higher the value of assets, the higher the return, provided that part of it goes to a fund allocated to repay depositors ' funds, stressing that if the private sector enters any state facility and restores confidence in it, the value of this facility will double, and it is known that in the world of Finance and business there is a big difference between the failed management and the successful management of any sector.
He adds: If the state gets 60% of the facilities worth 60 billion, isn't that better than owning those facilities worth no more than 20 billion? Thus, the State wins and the Depositor benefits, and creates a movement in the country that leads to attracting investment and creating jobs, and then growth is achieved, and the tax on this movement is poured into the state treasury, which benefits twice: from the increase in the value of assets and from taxes.
He continues: If this project makes a profit, the state can cede part of the shares to the private sector, and if the desired profit is not achieved, everything remains for the state.
Khoury believes that a step of this kind satisfies the IMF, based on the fact that the value of the state's assets has increased, even if its share has decreased, and this opens up new prospects for future generations, especially in terms of providing jobs and providing basic services that are currently missing, this will lead to a WIN-WIN SITUATION.
Based on this proposal, what was the IMF's answer? Khoury answers: it does not work this way, and the Lebanese themselves should implement such a proposal.
Here, he suggested that the fund's officials cooperate with INVESTMENT BANK, as this type of bank is capable of innovation and creating opportunities. Especially since even if the losses are distributed, it will not solve the problem if there is no vision and plans for advancement.
He concludes: the system was based on fixing the exchange rate and attracting investments in the form of deposits, but after what we have come to is there an alternative system? The main problem with the IMF is that it calls for raising taxes, but the economy should grow in size. He concludes: the IMF does not go towards the DIMENSION of the economy, but rather to the DIMENSION of the BUDGET, i.e. a limited view of addressing crises.