The International Monetary Fund offered to provide assistance to Syrian refugees in Lebanon during Finance Minister Mohammad Safadi’s visit to Washington last week, a source told The Daily Star Thursday.
“But the minister insisted that any form of financial assistance from the IMF should go through the NGOs and other organizations which are helping the displaced people. The minister did not want this money to be channeled to the Cabinet directly,” the source said on condition of anonymity.
IMF Managing Director Christine Lagarde met Safadi separately in Washington and discussed the government’s efforts to reduce the budget deficit and put in place fiscal reforms.
“The IMF asked about the conditions of the Syrian refugees and expressed readiness to offer all types of help to ease the pressure on the Lebanese government, ” the source said.
The Lebanese government said it urgently needed $273 million to shelter the Syrian refugees , stressing that the state of the Treasury did now allow Lebanon to offer more help.
Saudi Arabia, Kuwait and the United Arab Emirates have pledged more than $1 billion to aid Syrian refugees in Lebanon, Jordan and Iraq.
The IMF, according to the source, supported Safadi’s attempts to reduce spending and increase revenues.
The IMF did not encourage the government to increase spending, but it also did not explicitly say that the Finance Ministry should raise taxes to finance the controversial salary scale.
“They [the IMF] did not go into details nor did they make any projections on Lebanon’s GDP or even disclose their own index and charts about Lebanon. They just listened carefully to Safadi’s explanation about the state of the Treasury,” the source said.
But the source said that Lagarde encouraged Safadi to push for reforms and take measures to tighten spending.
The IMF has not yet released the fourth chapter on Lebanon which details its fiscal and economic situation.
“The IMF was supposed to release this report four or five months ago. There was an IMF team in Lebanon but they left quickly after the assassination of Brig. Gen. Wissam al-Hasan,” another source said.
Safadi also met senior officials at the World Bank and urged them to finance two projects in north Lebanon.
“The World Bank was interested in funding a project to contain the pollution in Awali river and to finance a new highway connecting Beirut and Tripoli,” the source said.
The minister has not yet presented the 2013 draft budget amid expectations that this bill will not include any tax.
“This is an austerity draft budget; it will only mention current spending and projected revenues,” the source said.
Some observers believe the new draft budget will not pass in Parliament.