April 6, 2018

As Prepared for Delivery

Thank you Minister, and thank you to the French government for hosting this conference.

I have a simple message. The proposed Capital Investment Plan, or “CIP” is worth supporting, but to make it succeed all of us must do our part.

Lebanon deserves and needs strong support from donors. Allow me to highlight two important reasons:

First, Lebanon deserves support because of its generous hosting of many refugees from Syria. It is providing an international public good at great cost to itself.

Second, Lebanon needs support because its economic position is very vulnerable. This is partly because of the effects of the Syrian crisis, and partly because of accumulated economic imbalances. For example, public debt is very high, at about 150 percent of GDP.

Therefore, it is important that Lebanon get as much support as possible in the form of grants or concessional loans. I very much welcome the attendance here of many donors. I urge you to show support with generous commitments.

This said, the Lebanese government must do its part too.

It needs to address economic risks. The most urgent task is to reduce the budget deficit and set public debt on a downward path. I warmly welcome the government’s commitment to reduce the deficit by five percentage points of GDP over the next five years.

I also welcome the commitments to reform electricity and to combat corruption. The next step will be to enact measures to achieve these goals.

The IMF has already given some advice on fiscal and structural issues, and we are ready to help further.

Lebanon must also spend the money it raises efficiently. Next month the IMF will conduct a Public Investment Management Assessment for Lebanon. This will identify gaps in the management of investment. It is very important that the government act to fill these gaps before it starts to scale up its investment program.

The CIP can help refugees and their Lebanese host communities by creating jobs. Moreover, and it can help everyone in Lebanon by improving roads, water and power. If coupled with budget measures and structural reforms, it can also reduce Lebanon’s budget deficit and raise growth. A lower deficit and higher growth will start to reduce the debt ratio. This will help Lebanon improve confidence and support economic stability.

Let me conclude by wishing the Lebanese authorities courage, wisdom and good luck as they take their plans forward. And once again, I would like to thank our hosts.