Press Release No. <a name="P16_75"></a>04/98

The International Monetary Fund (IMF) and the Lebanese Ministry of Finance issued the following statement today in Beirut:

"The Lebanese Ministry of Finance and the International Monetary Fund organized on May 18-19, 2004 in Beirut a two-day conference on fiscal reforms in the Arab countries and the Near East. The conference was attended by Finance Ministers and other policy makers from 17 countries as well as by high-level representatives of regional and international organizations including the World Bank and the Arab Monetary Fund, as well as UNDP and the Islamic Development Bank. The conference allowed the participants to engage in a dialogue on common fiscal policy challenges, reform experiences and implementation issues. The aim of this conference was to explore key issues in fiscal policy reforms and enhance policy coordination within the region and with international institutions.

"The region represents a group of economically diverse countries with vastly different resource endowments. Despite these disparities, many countries in the region face similar economic challenges; foremost among them is achieving higher and sustainable growth and generating employment opportunities for fast growing populations. Participants agreed that reforming the public sector, improving governance, and increasing disclosure were key to achieving these objectives. Most of the countries have undertaken significant economic and fiscal reforms in the recent years, although much remains to be done.

"The two-day conference, which included keynote lectures highlighting common challenges, country presentations, and open discussions, was useful in identifying reform priorities and impediments. Participants discussed ongoing and proposed tax reforms, such as tariff reforms and the adoption and reform of VAT; improvements in the tax and customs administration; redefining the role and boundaries of the State and reviewing expenditure policies; reforming the budget and expenditure management process in a well-sequenced manner; the scope for performance budgeting; improving fiscal transparency; and ensuring debt sustainability based on a sound debt management framework.

"There was a consensus among participants that the conference was very useful in providing new insights about fiscal reforms and sharing policy experiences and lessons among countries. Participants agreed on the importance of follow-up and continued regional cooperation on issues of fiscal reform.

"The discussions during the conference will also serve as an input to the defining the specific activities of the Middle East Technical Assistance Center (METAC), whose establishment was announced by Mr. Agustín Carstens, the IMF Deputy Managing Director, on May 17. METAC will be based in Beirut and should begin functioning in the coming months."