Alain Bifani’s Speech at IMF Managing Director’s Meeting with Arab Governors in Lima

Madame Lagarde,

I would like to reiterate how important it is for countries like Lebanon and Jordan to receive timely and adequate support in view of the refugee crisis. We are in this regard very appreciative of what you said yesterday at the Deauville Partnership meeting with regards to the huge fiscal pressure faced by Lebanon as a result of neighboring countries’ crises.

I would also like to welcome the initiative of a regional tour that you, Mrs. Managing Director, the President of the World Bank, and the United Nations Secretary General are planning in the region. Your visit will give a great boost to our efforts in managing a refugee crisis of a magnitude that is unprecedented since World War II. We in Lebanon are doing that in a smooth way which provides stability and steadiness to the whole world.

Nevertheless, in 2015, Lebanon’s growth will be flat, debt to GDP – already very high – will rise even more, and the cumulative economic cost of the refugee crisis already amounts to 30% of GDP. Fiscal revenue will decrease for the first time in decades, and infrastructure and environment are quickly depleting. About 10% of the Lebanese population has fallen below poverty line, in addition to the existing 30%, and host communities are becoming increasingly desperate. Subsidies increased by 35% due to the increase of users, and on electricity only, they reach 4% of GDP. Other utilities are greatly suffering too. Our current account deficit has reached 25% of GDP.

Without timely and adequate support, Lebanon may enter a round of instability that would increase regional instability and unleash massive waves of refugees toward various other countries.

We need the Fund to help us assess the impact on a macro and fiscal level, as there is a going concern that should be addressed urgently. In terms of tools, it would be great to think along the lines of he successful initiative that you had during the Ebola crisis for instance, or any other appropriate way.

On a different note, we too welcome the Fund’s assessment of the negative implications of de-risking on banking institutions in our region, and we call on the Fund to address them carefully.

Finally, we acknowledge progress on diversity. However, more efforts are needed to improve the representation of staff from the MENA region at the IMF.

Thank you.

Speech at the IMF Managing Director