Statement by IMF First Deputy Managing Director John Lipsky on LebanonPress Release No. 07/9
January 23, 2007
John Lipsky, First Deputy Managing Director of the International Monetary Fund (IMF) made the following statement today:
"The Lebanese authorities early last year prepared an ambitious and comprehensive economic reform program. The program's goals were to improve Lebanon's economic performance and reduce its substantial debt burden. Last summer's conflict, however, disrupted progress on reform, while increasing economic and financial fragilities.
Following the Lebanese authorities' recent adoption of the reform program, a donor conference has been convened for January 25 in Paris to mobilize financial support from the international community for Lebanon's reconstruction and reform efforts. The Lebanese authorities have also requested assistance in implementing their reform program through the IMF's Emergency Post-Conflict Assistance (EPCA). The EPCA is designed to help countries in post-conflict situations restore macroeconomic stability and the basis for sustainable, high-quality growth.
In an informal meeting on January 22, the IMF's Executive Directors were informed of the request by the Lebanese authorities, and expressed strong support for it. Based on this, we will work with the Lebanese authorities on an EPCA, with a view to presenting their request for Executive Board approval shortly.
In light of Lebanon's very high debt burden, it is essential that the authorities' program be supported by a strong donor financial package involving grants to be used for debt reduction, so as to put the country's debt-to-GDP ratio on a clear downward path toward sustainability," Mr. Lipsky said.