Latest news with #LebanonReforms
The National
08-07-2025
- Business
- The National
Despite US pressure on Lebanon to disarm Hezbollah, Tehran alone has the leverage to make it happen
The US ambassador to Turkey and envoy to Syria, Tom Barrack, returned to Beirut on Monday to hear what the Lebanese had to say about a proposal he had presented two weeks ago. Not long after his arrival, he declared he was 'satisfied and grateful for the Lebanese response … We are developing a plan to move forward, and I feel very hopeful'. Mr Barrack has taken over the Lebanon file momentarily following the departure of the previous envoy Morgan Ortagus. On June 19, he brought with him a plan outlining Hezbollah's disarmament, which would lead to Israel's withdrawal from hills it occupies in southern Lebanon. The proposal also covers economic and financial reform. In the proposal, Lebanon and Israel would also move towards demarcation of their border, removing any excuse for continued resistance against Israel. The Israelis would release their Lebanese prisoners as well. In parallel, Lebanon had to implement reforms that ended the cash economy, restructured the banking sector and closed Hezbollah's de-facto bank Al Qard Al Hassan as well as the money exchanges that help the party finance itself. Lebanon and Syria would also be asked to improve ties and control their common border, which they would demarcate. This would clarify to whom the Israeli-occupied Shebaa Farms belong, and if the sides agreed that they are Syrian, as the UN has said, it would end Hezbollah's justification for liberating the farms. Mr Barrack also made it clear the demands were part of a broader package – one with Arab backing. If Lebanon failed to implement Hezbollah's disarmament, it would not benefit from outside investment or aid to rebuild the country after the war last year. The Lebanese reply will now be used by Mr Barrack to help lay the groundwork for progress on the Lebanese-Israeli front, because the US feels that the mechanism put in place to consolidate the ceasefire negotiated last November is no longer working. In public, Hezbollah has maintained a hard line, describing calls for its disarmament as an Israeli demand, backed by Washington, and insisting the future of its weapons had to be decided by the Lebanese. Its secretary general, Naim Qassem, stated last week: 'We will address and agree internally to […] matters such as weapons and other issues.' 'Our weapons,' he added, 'are there to confront Israel, and we will not surrender our right.' On Sunday, Mr Qassem said the party was ready for one of two choices: peace and the building of a state or confrontation. 'But,' he said, 'we will not surrender, nor will be compromise on our rights and dignity.' Upon returning to Beirut, Mr Barrack sounded conciliatory when he said that there was 'no deadline' for Hezbollah's disarmament. The US proposal put the Lebanese on the spot. While President Joseph Aoun and Prime Minister Nawaf Salam seek a monopoly of the state over weapons – they have made this a stated goal of the Cabinet – they have moved slowly on disarming Hezbollah to avoid a potentially risky confrontation with the party. However, under US pressure they explicitly mentioned in their reply to Mr Barrack that the state alone must hold weapons, to which Hezbollah had to agree. A major part of the problem is that, ultimately, any decision on Hezbollah's weapons will be taken in Tehran, given that the party's senior leadership was largely eliminated last year and Iran now has more central say in its affairs. Unconfirmed news reports have indicated that Mr Aoun recently brought up Hezbollah's disarmament with a leading party official, and proposed that the state confiscate its rockets, but this was met with a refusal. Publicly, at least, Hezbollah has sought to portray itself as flexible on its weapons. Not that it has had much choice. The party is isolated nationally and has no serious hopes of reviving a military strategy against Israel at present while remaining vulnerable to Israeli attacks. And it wants to avoid tensions with the Lebanese state. There have been unconfirmed reports, notably a July 4 story published by the news agency Reuters, that Hezbollah is discussing internally reducing its role as an armed group, even if this falls short of complete disarmament. At the same time, the party does not want to be seen as surrendering its weapons under outside, especially US and Israeli, duress. Yet this potentially poses problems for Hezbollah. Lebanon's President and government have staked their credibility on giving the state a monopoly over weapons, and the party's reluctance to go along with this, or its desire to impose conditions on its disarmament, may well strain its ties with the state. If the Americans and Israelis believe that the Lebanese state and Hezbollah are manoeuvring to buy time, it is a near certainty that Israel will escalate its military operations in Lebanon to impose its preferred outcome. The probability would rise if the fighting in Gaza is soon brought to an end. It also seems highly unlikely the US would support renewing the mandate of UN peacekeepers in the country in such a case, while a further lack of progress would mean no aid for reconstruction, let alone foreign investment in the country. Mr Barrack's initiative opens the door to a new phase, one in which Lebanon will soon have to offer a timetable for disarming Hezbollah. Mr Aoun and Mr Salam appear to agree in principle to do so, while Iran and the party are not there. Under these circumstances, the President and Prime Minister may sense, against their deeper preferences, that the only leverage that might change Hezbollah's mind is that provided by their sworn enemy.
LBCI
02-06-2025
- Business
- LBCI
IMF reviews Lebanon's economic plan: Finance Minister vows no more off-budget spending
Report by Lara El Hachem, English adaptation by Yasmine Jaroudi The International Monetary Fund (IMF) presented its fiscal vision for Lebanon during a technical meeting with Lebanese officials, focusing on key reforms, including bank restructuring, public debt management, revenue generation, customs modernization, and sector-specific growth over the next three to five years. The meeting, led by IMF mission chief Ernesto Rigo, was preceded by bilateral discussions with Finance Minister Yassine Jaber. Following the talks, Jaber reaffirmed Lebanon's commitment to enforcing laws related to revenue collection, tax and customs evasion, and spending discipline and pledged to achieve a primary fiscal surplus. He also emphasized that the government will no longer finance any sector outside the approved state budget, including the power sector. One key topic was the recent move to increase taxes on fuel to fund salary hikes for military personnel. The IMF welcomed the measure as an example of responsible budgeting, emphasizing the need for any new spending to be offset by new revenue and implemented strictly within the framework of the state budget. The IMF also called for a comprehensive financial audit of all state-owned entities, including Électricité du Liban (EDL), the Casino du Liban, the port authority, Ogero, and the regional water establishments. LBCI has learned that the Finance Ministry's reform efforts are currently centered on ensuring that all taxpayers are registered with the tax administration and are held accountable for dues. In a step toward this goal, the minister sent a letter to the Interior Ministry urging municipalities to share information on businesses subject to income tax. The ministry is also preparing to implement an e-invoicing system to combat customs evasion, which has often occurred through the use of falsified paper invoices. Combined with efforts to tighten control over both legal and illegal border crossings, the reforms, if effectively executed, are expected to generate up to 30% of Lebanon's total tax revenues. The IMF delegation is expected to return by the end of summer to assess Lebanon's progress and conduct a full review of the reform implementation.
LBCI
02-06-2025
- Business
- LBCI
Lebanon and IMF continue negotiations at Finance Ministry
Negotiations between Lebanon's Finance Ministry and the International Monetary Fund (IMF) resumed Monday afternoon in Beirut, focusing on the country's Medium-Term Fiscal Framework (MTFF) and the guiding principles for financial policy in the coming phase. The discussions, which built on last week's meetings, centered on strategies aimed at restoring financial stability and encouraging sustainable growth. According to preliminary data compiled by the IMF delegation through meetings with Lebanese financial and economic institutions, potential solutions to the country's crisis remain viable, especially if the government continues implementing reforms. The MTFF being developed is intended to be both realistic and flexible, reflecting Lebanon's economic challenges while promoting fiscal transparency, discipline, and long-term structural reforms. Key components include prioritizing effective public spending tools in alignment with the country's development and social needs. Attending the meeting were Finance Minister Yassine Jaber, Economy Minister Amer Bisat, Director of Public Finance Georges Maarawi, Banque du Liban (BDL) Vice Governor Salim Chahine, and economic and financial advisors from the presidency, the Prime Minister's Office, and the Ministry of Finance. Representing the IMF was mission chief Ernesto Rigo and a team of specialized experts. Jaber and Rigo held a separate working session to assess progress since last Friday's talks and to prepare for the broader afternoon meeting. In a separate development, Minister Jaber, along with Maarawi and advisor Claudine Karaki, met with a delegation from the European Union that included representatives from the European Commission, the European Investment Bank, and the European Investment Fund. Discussions focused on advancing joint efforts in economic reform, infrastructure modernization, and digital transformation. The talks also emphasized the importance of private sector support and investment incentives, as well as the EU's interest in monitoring Lebanon's progress toward an IMF-backed reform agenda.
