Lebanon needs an IMF bail-out“”minus the austerity

Lebanon needs an IMF bail-out“”minus the austerity

The clouds have been forming above Lebanon's financial sector for years, and now the storm has come with just one silver lining: most of the debt owed to creditors is held by Lebanese.. Accepting that external financial assistance is necessary to avoid social collapse and food shortages, careful attention must then be paid to the conditions imposed by the creditors.. A typical IMF plan that increases regressive taxes, enacts fires sales of the public sector, and cuts up the public sector without careful consideration of the social effects will be neither accepted nor useful.. The IMF estimates that improving collection in the current system could raise the tax-to-GDP ratio from around 13-16 percent to 34 percent, some $18.6 billion annually.. A country's bargaining power in debtor-creditor negotiations increases if it has secured other financial assistance in advance, and we need all the bargaining power we can get.. Time and again, the classic IMF package has proved ineffective in bringing financial stability to countries around the globe-quite the opposite ..