IMF Expert Exposes Corruption, Lack of Performance in Lebanon

  • Economics

A leaked recording of an expert at the International Monetary Fund (IMF) exposed the level of corruption and lack of performance of the current Lebanese government and political establishment, as the specialist is heard depicting the degrading situation in the country.

Below is the exact, unedited transcript of what the IMF expert says in the recording:

"I travel very frequently on behalf of the IMF to many countries.

I was the auditor for Paris 2 and Paris 3, so I’m quite familiar with the framework and the conditionality that was put on with regards to Paris 2 and 3 without going into details.

The panel has asked us to trust it, and I’m finding it very hard today to provide you with the blind trust that we gave you in Paris 1, 2 and 3, and I am finding the fact that we're calling this CEDRE initiative as if we're saying that we failed the first three times and, hence, we're going for something new.

This is the first time in French history where the French government actually creates a donation platform, an international donation platform, that is happening several weeks before an election. It has never happened before. So the question that we have is: Is there a political imperative behind this? Is this an indirect sustenance to the existing government today?

We have provided with the IMF every single year since 1999 a full report to the government stating exactly what the administrative reforms that we recommend and that should be implemented and should happen in the country should you want as Lebanese to decrease your debt ratio relative to other countries.

You have a cancer; there is no other way of describing the current situation in Lebanon. That cancer is a lack of governance which has resulted in unequalled and unparalleled corruption.

I have worked in Tanzania, Botswana, Nigeria, and Cote d'Ivoire as I worked in approximately 25 African countries. The only country that comes close to what is happening in Lebanon is Botswana and to a lesser degree Zimbabwe.

There is no reason, given the intellectual capacity and the educational level that we have in Lebanon today, that the fundamental questions regarding utilities such as electricity, pollution, education cannot happen.

If we look at the airport and the tax evasion, all of these issues are conducive to bringing in by simple reformation or, in many cases, simple application of existing laws can bring in to the Lebanese economy approximately 6 to 8 billion dollars a year. That’s a fantastic number.

Instead of begging the French to give us this money, why isn’t the administrative reform done internally?

I can't understand why Lebanon, a country that has the economy of a city of a size of Miami, has 30 ministers. By the way, the Russian government, which has 13 time zones, only has 9 ministers.

So I understand that the consensual aspect makes it very difficult to come to coherent decisions.

Today, my recommendation, and I think that it is the recommendation of the World Bank in the current report which you just mentioned and which I have read, I don’t think Lebanon should be asking others for help. I genuinely think Lebanon should be asking itself what can we do for ourselves.

The current debt ratio, and I’m sure that everyone here who have children without a haircut, our great grandchildren will still be paying their debt. And that if we assume that the economy will grow at 8 to 10% per annum for the rest of the history of Lebanon, which is an impossibility.

So the concept of corruption is the fundamental issue that we seem to be teetering above and the International community has treated Lebanon very much like an alcoholic who has promised that tomorrow he's going to change.

And there has no indication, medically speaking, that within the very near future there can be, given the current political structure, any form of change and it is very unfortunate that I should come to this conclusion:

I genuinely think that the model provided to Greece although we will never have that type of a model because frankly who cares?

The mode that is provided to ex-Yugoslavia and the model that was provided to Nigeria is perhaps the closest international verification model with regards to auditing and spending which could provide Lebanon with an escape gate."