10 June 2024
Special Drawing Rights: A Disbursement Mechanism Marred by Violations and Lacking Transparency
Lebanon has been suffering from a severe economic crisis since 2019, in the absence of necessary reforms. In 2021, the country received $1.139 billion in Special Drawing Rights (SDRs) allocation, with recommendations from the International Monetary Fund (IMF) to use these funds to rebuild the Central Bank of Lebanon's reserves and to disburse them in a transparent and responsible manner that supports necessary macroeconomic adjustments and reforms.
However, the disbursement of SDR funds was marred by violations and lacked transparency, as highlighted in this report. This prompted some MPs to submit a letter to the Ministry of Finance requesting detailed information on how the SDR funds were spent. Additionally, the Finance and Budget Committee referred this file to the Court of Audit due to the legal violations surrounding the funds' disbursement mechanism. However, despite these measures, there is still a lack of transparency regarding this issue to date.
While SDRs are not related to the specific reform priorities of the on the Reform, Recovery, and Reconstruction Framework (3RF), it is worth noting that during the Second Consultative Group Meeting on the 3RF on July 27, 2021, the maximization of the potential benefits of the IMF Special Drawing Rights was mentioned.
Therefore, this report addresses the SDR topic from a transparency perspective, in light of the unconditional nature of these allocations.
This report is part of a series of reports produced by Maharat Foundation to track the progress of reforms highlighted in the Lebanon REFORM, RECOVERY AND RECONSTRUCTION FRAMEWORK (3RF) which is part of a comprehensive response to the massive explosion on the Port of Beirut on August 4, 2020, launched by the European Union (EU), the United Nations (UN) and the World Bank Group (WBG).
To read the full report:
Special Drawing Rights: A Disbursement Mechanism Marred by Violations and Lacking Transparency
