AWC has two members in Lebanon and works also with non-member organizations.
AWC monitors the policies and activities of the following International Financial Institutions (IFSs) in Lebanon:
International Monetary Fund (IMF)
Lebanon joined the IMF in 1947. The Lebanese government has yet to take a loan from the IMF.
Since 2006, the IMF has been assessing the Lebanese economy periodically. This assessment is known as Article IV Consultation in reference to the article number 4 in the IMF’s Articles of Agreement that established the IMF’ surveillance role.
World Bank Group (WBG)
Lebanon joined the WBG in 1947. Throughout the years the bank invested in 87 projects in the Lebanon public sector. As of September 2020, the Bank has 10 active WB projects, with a total price tag of US$ 1.4 billion And 10 projects in the pipeline (under preparation).
The International Finance Corporation, -the arm of the World Bank Group that invests in private sector- has an active portfolio of US$208 million in Lebanon as of July 2020.
The World Bank Group prepares a Country Partnership Framework (CPF) for each country it is active in. The CPF outlines the Bank‘s strategy in this specific country over a three to five year period. As of January 2021, the current CPF for Lebanon covers the period of 2017 through 2022.
The European Investment Bank (EIB)
EIB started its operations in Lebanon in 1978. Since then, EIB invested 2.39 billion Euros in 47 projects in Lebanon.
The European Bank for Reconstruction and Development (EBRD):
Lebanon’s relationship with the EBRD has been recent. The first project financed by the EBRD in the country was in 2017. Since then, and until December 2020, the EBRD invested 742 million Euros in 10 projects in both the public and private sectors
The EBRD develops a Country Strategy for each country it works in that outlines its strategy framework in the country for a certain period. The Country Strategy for Lebanon is currently still being reviewed.
Main issues that AWC focus on in Lebanon
Lebanon is facing a major financial crisis. The crisis started in 2019 when US imposed sanctions on the Lebanese Hezbollah and Syria, heavily devaluating the Lebanese pound due to acute USD shortages within the country. The subsequent Covid-19 pandemic and the lockdown to prevent its spread, only exacerbated the crisis. The GDP of Lebanon fell from $55 billion in 2018 to $44 billion in 2019.
This has plunged the country into debt, as the debt to GDP ratio stands now at 170%, compared to 144% before. A long history of reliance on debt and corruption has spiraled into the Lebanese government taking loans to service existing debt. This has made Lebanon the 3rd most indebted country in the world after Greece and Japan. In March 2020, Lebanon has defaulted for the first time in its history on a $1.2 billion Eurobond.
Up until the crisis, IFIs such as the IMF and the WB supported the Lebanese economic model based on rent based income, crony political elites and no productive sectors development, as the IMF repeatedly praised it in its Article IV consultations and the WB building a sizeable portfolio. Now, the IMF is in talks with the Lebanese government for a bailout program, conditioned on reforming the Lebanese monetary and financial policies.
AWC continues to monitor and analyze IFIs work in Lebanon
AWC activities in Lebanon
AWC partnered with “Lebanese Union of Persons with Physical Disabilities” to monitor and analyze the impacts of the World Bank’s Lebanon Health Resilience Project. This program aims to assist the Lebanese government to keep up with the increasing demand towards the country’s health sector that has been caused by the emergency of the displacement of Syrian refugees as well as facilitate access to help Lebanon face the Covid-19 challenges. The program has been active since 2017.