The Lebanese pound has been tumbling on the black market as the country faces its worst economic crisis since the 1975-1990 civil war
Beirut (AFP) - A senior member of Lebanon’s finance ministry who is part of a government team negotiating with the International Monetary Fund resigned Monday over the mishandling of the country’s economic crisis.
The move comes as talks stall between Lebanon and the International Monetary Fund to lift the nation out of its worst economic crisis since the 1975-1990 civil war.
Alain Bifani is the second member of the government’s negotiating team with the IMF to quit this month over the handling of the crisis by Lebanese officials.
Speaking at a new conference, Bifani, who held the post of director general at the finance ministry for two decades, said he quit because he refuses “to be a partner or spectator to the country’s collapse”.
He accused “political and financial” powers in the country of hampering a major reform plan adopted by the government this year, one he helped formulate and which serves as a basis for IMF talks.
He said those responsible for dragging the country into its current slump refuse to contribute to financial recovery, choosing instead to protect their personal interests.
“They want the people to pay with the collapse of the Lebanese pound, open-ended controls on bank deposits and horrifying inflation” he told reporters.
Lebanon is in the grips of its worst economic crisis since the 1975-1990 civil war with more than half of the population living in poverty.
The Lebanese pound officially remains pegged at around 1,507 pounds to the dollar, but the black market rate reached a new record of 8,000 Monday morning, according to several specialised websites.
Banks have gradually restricted dollar transfers abroad and withdrawals since last year, effectively trapping dollar savings in accounts unless their owners want to convert them into pounds.
The IMF since May has been in talks with Lebanon which is looking to secure $20 billion in external funding to exit its crisis.
“We claim that we want an IMF program, but we are doing everything possible to thwart reforms,” Bifani said.
“If we continue in this way, unfolding events will bury the reform plan.”
- ‘Loss for Lebanon’-
Lebanon's economic meltdown has sparked unprecedented anti-government protests since October
Earlier this month Henri Chaoul, an advisor to the finance ministry in talks with the IMF, also stepped down saying there was “no genuine will to implement either reforms or a restructuring of the banking sector, including the central bank”.
UN envoy to Lebanon Jan Kubis called Bifani’s resignation “a loss for Lebanon during the rapidly deepening overall crisis.”
The IMF’s managing director Kristalina Georgieva on Friday said talks with Lebanon have been “difficult”.
“The core of the issue has been whether there can be unity of purpose in the country that can then carry forward a set of very tough, but necessary measures,” she said.
Lebanese authorities have struggled to stem the Lebanese pound’s collapse and Friday the central bank launched an online platform in an apparent bid to oversee money changing operations at an official rate.
On Monday, Lebanese banks sought to encourage depositors to withdraw trapped dollar savings in Lebanese pounds by increasing their exchange rate.
Several banks said they had increased their buying rate from 3,000 to 3,850 pounds to the greenback.
Economist Jad Chaaban said banks adopting the new exchange rate was part of a “strategy of converting more deposits to the Lebanese pound” as foreign currency becomes scarce.
Lebanon, which has a sovereign debt equivalent to 170 percent of its GDP, defaulted on its debt in March for the first time in its history.
The economic crunch has sparked unprecedented protests since October and is plunging entire segments of the population into poverty.