Century International/The Policy Initiative: “The Shadow Plan: How Lebanese Elites Are Sabotaging Their Country’s IMF Lifeline”

I have a new report out, this time a collaboration with Sami Zoughaib of Lebanese think tank The Policy Initiative on how Lebanon's IMF talks have gone so badly awry:

https://tcf.org/content/report/the-shadow-plan-how-lebanese-elites-are-sabotaging-their-countrys-imf-lifeline/

Sami and I started work on this report late last year. It's been clear since early in Lebanon's economic crisis that the country's only hope for real recovery was an IMF program. Yet there seemed to be very little reliable information on how the country's IMF talks were really going – how they worked, who was involved, and why they didn't actually seem to be leading anywhere useful. This all seems pretty important! For Lebanon, the stakes of reaching an IMF deal – or not – are huge. Sami and I set to work figuring out what was going on, so we could make sense of things for (primarily) a Lebanese readership.

What we found out was definitely enlightening, if not especially positive or encouraging. Our report lays out what we learned about Lebanon's IMF talks have proceeded, and why, absent some major course change, Lebanon will not have an IMF program. The main problem is a Lebanese ruling elite hostile to reforms that threaten their entrenched interests. That hits Lebanon's IMF talks in two main ways: first, in the disconnect between these elites and an official Lebanese negotiating team that doesn't really represent them, and can't properly commit to reforms on their behalf; and second, in a political media discourse too full of bogus narratives and disinformation for people to make sense of what's going on.

Lebanon's ruling elites all profess their commitment to reaching an IMF program. Their revealed preference, though, is inaction and an alternative, non-IMF "shadow plan." It's the "shadow plan" to which Lebanon has been subjected since the start of its crisis – a super-regressive economic correction that is stabilizing the Lebanese economy at a new, low level on top of the country's middle class and poor.

Our report includes some recommendations for interested outsiders, including the IMF and donor countries. But mainly we hope to address members of Lebanese civil society, who will need to keep working to inform the Lebanese public about the issues and the stakes; and the public itself, who, with a better sense of what's really going on, can hopefully reclaim some agency in this process.

This report is a collaboration between Century International and Lebanon's The Policy Initiative (www.thepolicyinitiative.org). TPI was founded in 2021, and since then it has produced exactly the kind of research on Lebanon that I, personally, have been looking for. It was super partnering with TPI, which I think is a really exciting and important initiative. You can also read our report on TPI's website and in PDF form here: https://www.thepolicyinitiative.org/article/details/294/the-shadow-plan-how-lebanese-elites-are-sabotaging-their-country%E2%80%99s-imf-lifeline