Political reforms are the key to Lebanon's access to oil wealth

Political reforms are the key to Lebanon's access to oil wealth

Omar al-Rassi | Tuesday 19 March 2024

Omar al-Rassi, "Akhbar al-Yawm" agency

Economic source to "Akhbar al-Yawm": the conditions were issued in a European statement in 2020

Since the beginning of the financial crisis in Lebanon, the IMF's interest in it has existed without translation, as after about two years of talks, a preliminary agreement was reached between the two sides, in April 2022, on a rescue package worth 3 billion dollars, but obtaining it depends on financial restructuring and major anti-corruption reforms... And the matter stopped here because the reforms are still far from being achieved and are nothing more than a dead letter.

There have been reports in recent days that the IMF will move again towards Lebanon with American encouragement...

An economic source explains via the "Akhbar Al-Yawm" agency that the IMF was created mainly to help the finances of countries and their central banks so that the troubled economies are not reflected on the global financial system, but the size of the Lebanese economy is very small and does not pose a threat to the global financial system, unlike other countries such as Egypt, where the Gulf countries provided assistance in the form of investments worth 30 billion dollars, the size of the Egyptian economy is large, and it may pose a threat to the global system, in addition to the geopolitical considerations of Egypt.

Thus, the source points out that the IMF has never refused to help any country, and it must be noted that the IMF offered to help Lebanon, but it stipulated economic, administrative and political reforms.

In this context, the economic source recalls the meeting of European foreign ministers in September 2020 after the assignment of Ambassador Mustafa Adib to form the government, they issued a statement demanding a government capable of carrying out economic and financial reforms in Lebanon that put it on the right track, and stressed a government that isolates Lebanon from regional conflicts.

Thus, the source points out that this statement formed the conditions that Lebanon must abide by and achieve in its economic and political aspects, and this has not been achieved.

The source continues: therefore, Total (a large company), which has now "withdrawn" in one way or another from the exploration of Lebanese oil, cannot oppose the political desires of major countries such as the United States.

The economic source repeats: if Lebanon does not meet the European conditions, "it cannot have an oil wealth that generates billions of dollars a year and whose fate is unknown.

Here the source goes on to point out that in the contract signed by the Lebanese state for oil exploration and extraction, as soon as there is gas, ownership of it automatically passes to the company that sells it and gives the Lebanese state its share.

The source concludes: If some in Lebanon believe that without economic and political reforms and without meeting the political demands of the international community, any file, especially oil, can progress, they are mistaken.

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