IMF Talks Collapse in Lebanon. Why That’s a Good Thing for Lebanon

Talks between IMF officials and politicians broke down recently when it transpired that the latter wanted a ‘brown envelope’ in any aid deal. Don’t blame the politicians though. It’s all they know and it was, after all, the UN who showed them the way. But can the UN in Lebanon actually feed the Lebanese?

It was probably the worst kept secret in Lebanon during most of 2018 and 2019. But the Ministry of Environment had been earmarked for a staggering 5bn dollars of aid, as part of the so-called 11bn dollar ‘Cedar’ aid package negotiated provisionally in Paris. Yet officials in this ministry were rubbing their hands in glee as they were not jubilant over the aid allocation being used legitimately, but were bragging as to how much of this sum was going to be embezzled to a certain political party.

This is Lebanon.

And this is the crux of the problem that any international donor faces when talking about aid in any context: massive, off-the-scale corruption which forgot the wisdom or merit decades ago of merely skimming 10 of 15% off the top in preference for at least half of what’s on offer.

Which is why recent news that IMF talks had broken down in Lebanon is the best piece of news this troubled country has had since October of last year when the country’s economy went into freefall following protests, initially sparked by a government initiative to tax WhatsApp calls.

The last thing Lebanon needs right now is aid which comes in the form of cash. In any formula. All it would do would simply enfeeble any opposition to the present puppet government led by the all-time diabolical muppet PM who surely won’t last the year in office. All any aid deal would do would be to support the mindset of the super-rich who believe that time is on their side in a long drawn-out war against the madding crowd of street parties, or rather street protests which are both dwindling anyway and were never really serious in their objectives. An aid package from the IMF or even the EU would simply be the pat on the back that the elite would welcome as most of it would end up in their pockets, while most Lebanese wonder how they are even going to be able to afford bread.

Recently, when IMF talks with the political elite broke down, no one was surprised to the gall of the politicians who, more or less, said that they wanted some benefits in the package towards themselves, a get-out-of-jail-card while rejecting a mega audit of the central bank and floatation of the local currency. Regulation of the ‘black hole’ of Lebanon’s crumbling electricity provider EDL, which constantly makes the news with its hilarious corruption scandals, is also held up as a good starting point. EDL loses around 2bn dollars a year, simply due to deliberate mismanagement – so as to allow corrupt government ministers to cash in on ‘emergency’ schemes while paying off their friends who run the neighbourhood generator racket.

Corruption comes in many forms other than cash. A local gangster who allows a generator operator to set up shop is worth thousands in an envelope every month compared to the one who gets blocked. And this scam has got so out of control that there are some generator operators who, given the permission by a political figure to set up in a given neighbourhood, actually take electricity from one neighbourhood (which is connected) and sell it on to the adjacent one which is in a blackout without even the generator turning.

And so it’s hardly surprising that Lebanon’s politicians more or less asked the IMF for a brown envelope themselves.

Lebanon faces really very tough times ahead. A brain drain in the next few months is inevitable as the local currency is expected to continue sliding as this battle between the elite and humble people looks set to be drawn out for months and perhaps years.

But if the EU and the IMF can’t do anything in Lebanon, then who can? How is it that the whole world just sits still and watches the suicide rates climb, people’s fridges empty and hospitals shut down due to no diesel in their generators?

Lebanon’s capital appears to be overburdened with too many UN agencies. Can’t the UN at least provide food aid? Or is that linked to a massive bung as well? In one sense, you can almost understand the culture that prevails with those in power to factor in kickbacks and assurances for themselves to not only stay in power but to continue with their unique management of the economy. Just take one look at how the UN operates there with its Syrian refugee program. An investigation I carried out myself in 2015, revealed that up to 70% of all aid coming into the entire program was swallowed up with operating costs [read salaries for UN workers and running costs for the NGOs which administer the programs]. That’s before anyone gets their sweaty hands on any of the cash before it reaches the mouths of starving refugees.

And this is the example that the international community serenades to the Porsche Cayenne gangsters who run Lebanon?

One of the arguments against the president’s son-in-law’s rant recently about kicking the Syrians and Palestinian refugees out of Lebanon is that the hard currency which flows into Lebanon from the UN is one of its last remaining lifelines in terms of buying power for essential commodities.

Think about that for a second. The elite actually regard the refugees as essential aid-bait for dollars needed to buy oil, flour and other such goods. It’s a game they play via pay-per-view journalists in their pocket in Beirut. Announce that refugees will soon be kicked out in a bid to stir the EU and its member states to come up with more money. In reality though the game’s up. EU apaches in Brussels know only too well that in reality the Syria refugees are paying into the system, as their slave labour makes the farms work and their pennies paid for water and electricity actually adds up to quite a tidy sum. And the neo-fascists like Bassil know that the donors know. But they try. It’s a win-won for his own racist white supremacist supporters who dream of the day when he is the President although it’s hard to imagine anyone remaining in Lebanon when that day comes. Bassil is an extreme leader brought in when Lebanon is pushed to an extreme, similar to the Boris vote in the UK which was entirely about getting on with Brexit.

Yet increasingly it appears that the real power in Lebanon – Hezbollah – is reluctant to let Bassil take the reins. And it’s not just because he sucked up to the Americans recently but its more about his lack of political clout where it matters. More likely when push comes to shove after the U.S. elections, we will see Frangieh enter the Presidential limelight as a more pliable Hezbollah-aligned President which might unite the Christians, if there are any left in Lebanon by 2022.

In reality, people aren’t waiting for an IMF deal. This is considered a cash cow only for the elite as no Lebanese person, regardless of which political party he or she follows, sees such an aid plan as beneficial. The Lebanese are not stupid. They know that the cash will only make the elite dig in for longer. It’s a waiting game. And in many respects people are waiting for a miracle in something which might jolt the present stalemate off its rails, like perhaps earlier presidential elections if President Aoun would stand down due to failing health. People starving to death and an economy in freefall is not exactly a shining eulogy for a political legacy and his family might be urging him now to consider how the history books will recall his period on office. But the last thing Lebanon needs in the short term is money. It would be like using gasoline to put out a fire. What it needs is food aid. But where is the UN?

By Martin Jay
Source: Strategic Culture

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