Loans: Lebanon

Treasury written question – answered on 7th July 2020.

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Photo of John Howell John Howell Conservative, Henley

To ask the Chancellor of the Exchequer, what steps he has taken to advocate that any International Monetary Fund loan package to Lebanon includes conditions on political restructuring to restrict Hezbollah’s state capture abilities and prevent its control of government spending.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

For all IMF programmes, the UK uses its seat at the IMF’s Board to engage in the process of programme design and stipulation of conditions on lending. We utilise the expertise of our embassy network to ensure that programme conditions reflect the domestic political situation while remaining consistent with the IMF’s mandate.

IMF programmes in general are subject to strict policies of oversight and monitoring, underpinned by well-established mechanisms.

Under its Articles of Agreement, the IMF must establish adequate safeguards for the use of its resources. IMF lending requires safeguards covering key areas of governance and control to help mitigate the risks of misuse of Fund resources and misreporting of data. These safeguards may include limits on how much can be borrowed, conditions on the loans, measures to deal with misreporting or arrears, and safeguard assessments of central banks. The UK also uses its seat at the Board to help shape these policies and ensure that they are applied across all the IMF’s lending arrangements.

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