IMF and World Bank Condition Aid to Lebanon on Normalization and Disarmament

The IMF and World Bank are reportedly linking aid for Lebanon to the normalization of relations with Israel and Hezbollah’s disarmament. The World Bank plans to approve $1 billion for reconstruction, contingent upon Lebanon enacting necessary reforms. Additionally, substantial aid from the EU is on hold due to Lebanon’s need to restructure its banking system, and Hezbollah has already invested significant resources into recovery efforts.

The International Monetary Fund (IMF) and the World Bank are reportedly linking aid for Lebanon’s reconstruction to the normalization of relations with Israel and the disarmament of Hezbollah. According to Al Akhbar, IMF chief Kristalina Georgieva informed the acting governor of Lebanon’s central bank, Wassim Mansouri, that accessing international funds will depend on specific actions within a designated timeframe.

The report indicates that these requirements align with anticipated political pressures regarding ‘normalization’ and ‘disarmament’. This follows speculation by US Special Envoy to the Middle East, Steve Witkoff, suggesting that Lebanon and Syria may be included in normalization agreements previously arranged by former President Donald Trump with certain Arab nations.

A month ago, Lebanese Finance Minister Yassin Jaber announced that the World Bank is preparing a $1 billion preliminary plan for reconstruction following a violent Israeli offensive. The World Bank is set to approve this funding on March 25, contingent upon Lebanon implementing necessary financial and political reforms.

Additionally, the European Union has conditioned its financial assistance on the urgent need to restructure Lebanon’s banking system, which has delayed the release of €500 million in aid critical to managing refugee flows into Europe as part of a 2024 agreement. Estimates suggest that Lebanon requires approximately $6-7 billion for essential infrastructure rebuilding and debris clearance.

Hezbollah has committed substantial resources towards recovery efforts, contributing an estimated $650 million dedicated to housing rehabilitation in southern Beirut and surrounding areas. Despite ongoing tensions and ceasefire violations from Israel, residents in southern Lebanese villages have begun to return to their homes.

Following the outbreak of conflict in Gaza on October 7, 2023, Hezbollah established support operations for Palestinians and conducted retaliatory strikes against Israeli positions. Ultimately, Israel agreed to a ceasefire with Hezbollah on November 27, 2024, after suffering significant battlefield losses and failing to achieve its objectives despite extensive fatalities in Lebanon.

In summary, the IMF and World Bank are conditioning aid to Lebanon on essential reforms and political alignments, particularly regarding relations with Israel and the status of Hezbollah. Upcoming meetings and decisions by these financial institutions will crucially impact Lebanon’s ability to rebuild after recent conflicts, while Hezbollah continues to support recovery operations in affected areas. The broader geopolitical dynamics surrounding normalization agreements also play a significant role in Lebanon’s future.

Original Source: www.presstv.ir