Lebanon's debt of 25 billion would be considered 'small change' in the wealthier nations but IMF says that Lebanon must do more severe 'structural adjustments' and privatization has not gone far enough, continuing its 'one size fits all' approach to economics.

Lebanese deficit plan fails The Middle Eastern Times

"Lebanese Prime Minister Rafik Hariri's plans to rescue the country from its crippling deficit received a serious blow when the International Monetary Fund warned that the government's much-touted privatization drive and soon-to-be implemented value-added tax simply weren't enough.

The final draft of the report, prepared by an IMF team assigned to Lebanon, regretted "the lack of a more up-front adjustment effort. We urge the authorities to consider an immediate tightening of fiscal policy."

According to the Central Bank, the public debt reached $25.9 billion at the end of August 2001. The IMF projected the 2001 budget to be "roughly the same as 2000" – which ended at more than 56 percent of GDP. The government, however, projected the deficit at the end of the year to be approximately 50.8 percent.

More than $500 million in VAT is expected to be generated each year. Some economists, however, have warned that such revenues are completely unrealistic as long as the country continues to slide into recession.

Finance Minister Fouad Siniora has fiercely defended VAT, stressing that it is vital to reduce debt servicing.

Under pressure from both the IMF and the World Bank, the government has been seeking new ways to boost the confidence of international markets in the country.

some bankers feel that the government may not be able to borrow more money because the debt servicing will exceed the entire revenues of the state.

The IMF did, however, praise the banking sector, which was able to sustain good profits despite the recession."



I have received what I consider a myopic response to this article alluding to 'money shortages' so I thought I would append a quick comment ... when I post something like this I assume that people understand certain back ground facts but in the case that you do not I clarify the underlying assumptions.

Remember a few years ago when northern economies were 'restructuring' due to the lack of money ... budgets were cut and services curtailed ... trillions are spent each year around the globe on war hawking ... and as for the rest well according to the statistics during the 'Reagan revolution' the amount of money concentrated in the hands of American capitalists soared from 22 to 42 per cent (just the kind of imbalance of capital that led to the depression) .... led to the depression)Shortage propaganda is used to evade the real issues ... I find it is always typical of what you might call 'right wing' apologists to ignore the ovviousand always maintain that giant blind spot when discussing 'fiscal responsibility'and so on ... remember 'do not touch the olive and the wine' (keep your eyes averted and your hands off of that great 'sacred golden cow' right ... Certainly the IMF and World Bank do ... as I said such deliberate myopia is characteristic of that approach and I find it prevalalent in 'right wing apologetics' ... for example you will never hear the IMF suggests much higher taxes on the wealthy or 'redistribution' of wealth to address the problems of extreme poverty and extreme wealth that exist in these poorer countriesthey won't cough up the 25 billion, but rather the hospitals will be closed and so on (this is what is known in the jargon as 'structural adjustment') ... discussing this issue while maintaining that myopia and that persistent blind spot is characteristic and something that needs to be addressed ... led to the depressi on)