## Managing Director Kristalina Georgieva's Remarks at the International Conference in Support of the Population of Lebanon

_IMF News, August 4, 2021_

## Source details

**Canonical URL:** [Managing Director Kristalina Georgieva's Remarks at the International Conference in Support of the Population of Lebanon](https://www.imf.org/en/news/articles/2021/08/04/sp080421-md-remarks-lebanon-conference)

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## Bibliographic details
- Published: August 4, 2021

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### Context and current situation
- Since the Beirut explosion in August (last year), parts of the city have been rebuilt, but hoped-for political, social, and economic reform has not materialized.
- Living conditions in Lebanon have dramatically deteriorated.
- The economy:
  - "has already shrunk by nearly one-third since 2017"
  - "is expected to contract further in 2021–22"
  - "unemployment is through the roof"
- The COVID-19 pandemic "continues to take its heavy toll."

### Urgency to act and IMF stance
- The IMF emphasizes both the urgency of immediate action and the need for longer-term transformational reform.
- Recent SDR development:
  - IMF Board of Governors approved a new SDR allocation of "$650 billion" (vote on "August 2").
  - Lebanon would receive "about $860 million of SDRs" from this allocation.
  - Purpose: to strengthen Lebanon’s depleted reserves and help address urgent needs of the Lebanese people.

### Guidance on SDR use and accountability
- SDRs must be "used responsibly and wisely."
- Decisions on SDR deployment are sovereign, but should aim for maximum benefit to the country and its people.
- Call to action: international and domestic partners should "work with us to help ensure transparency and accountability of the deployment of Lebanon’s new SDRs allocation."
- The Lebanese people "have the right to know what are these SDRs going to do for them."

### Structural reforms and areas of action (IMF priorities)
- The IMF identifies concrete areas to tackle Lebanon’s deeper, systemic problems:
  - Strengthen governance and tackle corruption.
  - Improve performance of state functions, with emphasis on management of state-owned enterprises and the energy sector.
  - "Complete an audit of the central bank and the electricity provider."
  - Implement a fiscal strategy:
    - Combine "deep debt restructuring" and reforms to restore credibility.
    - "Pay attention to social spending as part of this strategy."
  - Pursue a comprehensive restructuring of the financial sector:
    - "Recognize upfront the losses at private banks and the central bank"
    - Do so in a manner that "protects smaller depositors."
  - Establish a credible monetary and exchange rate system, "supported by unification of exchange rates."

### Constraints to IMF engagement
- IMF availability to assist has been ongoing over the past year, but:
  - Engagement "is severely constrained by the absence of an effective government."
  - Urgent appeal to Lebanon’s political leaders to form "a new government that has the will and the mandate to implement reforms."

### Closing message
- The IMF "stand[s] by" the people of Lebanon and looks forward to a government stepping forward so the IMF and partners "can join forces to pull Lebanon out of the tragedy of these last years, together."

*Managing Director Kristalina Georgieva — Remarks at the International Conference in Support of the Population of Lebanon, August 4, 2021.*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [Lebanon and the IMF](http://www.imf.org/external/country/LBN/index.htm)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/08/04/sp080421-md-remarks-lebanon-conference_