The outgoing Lebanese government recently approved in its last session before becoming a caretaker government an economic recovery plan that aims at pulling the crisis-stricken nation out of the economic & financial meltdown it is experiencing, bearing in mind that said recovery plan is one of the key requirements by the International Monetary Fund (IMF). The plan’s main objective revolves around inciting economic growth, spurring job creation, lowering poverty rates, and enhancing the level of public services being provided especially in the healthcare, education and electricity sectors. In details, the plan calls for focusing on productive sectors, namely the knowledge economy sector, given its important contribution to economic growth, whilst also securing an appropriate operating environment for such businesses (enhancing financial services, enforcing copyrights laws, providing cheap & high-speed internet and boosting electricity supply). The plan also stresses on achieving debt sustainability and on creating a leeway for high-priority expenditures in the fields of social protection, health, education and infrastructure. In details, and on the short-term, the plan cited the year 2022 budget’s target of a 4% deficit to GDP ratio whilst also listing the steps proposed by the budget to enhance revenues and trim expenditures. As far as the medium to long terms are concerned, the plan aims at setting debt on a downward trajectory by introducing a set of fiscal measures and adopting a debt restructuring strategy. Said fiscal measures revolve around enhancing tax compliance (especially for people lying among the high tax brackets), widening the tax base, reforming custom tax policies, gradually increasing the VAT from 11% to 15% and raising tax levels on non-essential items. On the expenditures front, the reform plan calls for improving expenditure efficiency and for working on determining priority expenditures. In this regard, the government will undertake a general assessment of civil servant employees and of job descriptions across the different branches of the government, allowing it as such to determine cost-cutting opportunities in such a way that does not affect the level of public services being provided. Always in the same regard, the government will also assess the pension system for public sector and private sector employees. The plan also calls for ensuring the enforcement of the recently approved procurement law as a means to enhancing the transparency of the public sector. The aforementioned measures would assist the government in taming the debt to GDP ratio to below the 100% mark by the year 2026 and to the 76% level by the year 2032. Always on the debt sustainability front, the plan points out the need to restructure Eurobond debt, while also indicating that the government has already started contacting debt holders in this regard. On the monetary front, the plan considered the current exchange system as unsustainable, as the currency has almost lost 90% of its value sparking inflation to triple digits (above the 100% mark). In the same vein, the current policy led to the depletion of foreign currency reserves and to the presence of multiple exchange rates. Accordingly, the plan calls for the establishment of a new monetary framework that will assist in restoring confidence, taming inflation and ultimately improving the value of the local currency, while citing in this regard the recent governmental approval of the capital control law. In the same regard, the plan calls for the adoption of a new floating exchange rate system that will allow only minimal interference by the government, in an endeavor to preserve foreign currency reserves, with the government also resorting to the purchase of foreign currencies, whenever the suitable conditions arise, in order to shore up its depleted reserves. Finally on the monetary front, the plan advocates bolstering the governance and the independency of the Central Bank while also stopping the practice of funding the budget deficit via BDL. On the social protection front, the government will prioritize the protection of the most vulnerable, with the plan indicating that the coverage of the National Poverty Targeting Program (NPTP) is not sufficient for tackling the extreme poverty phenomena that emanated from the multiple crises that struck Lebanon. In this context, the plan indicated that the government has already launched the Emergency Social Safety Net Project (ESSN) which will engulf 150,000 families and ensure education for 87,000 children as well as the Broad Coverage Cash Transfer program which will offer support to those not benefiting from the NPTP. Finally on the social protection front, the government aims at developing a national record that will achieve synergies between the different support programs as well as eliminating any overlap between said programs, while also increasing the scope of government assistance. The plan also stresses on the importance of implementing reforms of public sector enterprises in an endeavor to improve operating efficiency and reduce the burden on public finances. In this regard, the plan calls for coordinating with a renowned company to conduct an operational review and financial audit on Eléctricité du Liban, Port of Beirut, Casino du Liban, the Beirut Airport, Middle East Airlines, telecom operators and the Regie. Accordingly, the aforementioned companies will be allocated into three categories namely companies that will be kept with the government, companies that will be privatized and companies that will be liquidated. The reform plan stressed on the need to tackle the issue of EDL, noting that support to the electricity sector averaged 3% of GDP over the last decade only for electricity production to stand at 3-4 hours a day at present. Accordingly, the plan suggests an imminent increase in electricity supply to 8-9 hours per day by importing electricity and gas from Egypt and Jordan, while increasing electricity supply to 16-18 hours per day on the medium term and to 20 hours per day by the year 2025 via building new power plants that depend either on gas or on renewable energy. In the same vein, the financial performance of EDL will be improved by adjusting the outdated tariff to reach 12 cents per kilowatt hour and then 18 cents as electricity supply improves, while shielding low consumers from this tariff adjustment, with the tariff rate being also subjected to a monthly review. The plan also stresses on reducing technical and non-technical losses from their current level of 40% to 20% by the year 2026. Finally, the plan addressed the need to support governance and Anti Money Laundering and Combating the Financing of Terrorism systems, while also calling for other reforms such as raising the retirement age and eliminating early retirement.