THREAD Lebanon’s negotiations with the International Monetary Fund introduce a novel dynamic: Unlike other external parties who have spent years bailing Lebanon out, the IMF would demand much in return for its money

Over the years, donor states, development banks, and aid agencies working in Lebanon have mostly thrown good money after bad. They disbursed their budgets by funding projects that were usually dead on arrival

The IMF, by contrast, is ruthlessly transactional: It lends relatively small amounts to desperate governments while imposing strict conditions to maximize the chances of full repayment

The IMF is largely indifferent to every argument Lebanon usually invokes to secure favorable terms: the legacy of civil war, geopolitical instability, a fragile sectarian balance, and the influx of refugees

By the same token, the IMF is mostly unconcerned about politics: who runs the country, how they were elected, what they stole, where they find international support, and whether they embrace human rights

All told, the IMF is about balance sheets: Can the government earn more than it spends, cover its trade deficit, and deal with its outstanding debt in such ways as to repay, first and foremost, the IMF itself?

The IMF doesn’t deal in hypotheticals. Unlike other external economic parties, who may be satisfied with aspirational visions, declamatory laws, and pro forma committees, it will disburse only after seeing actual results

That is the fundamental change. For example, to qualify for IMF funding, Lebanon will have to share its financial statements transparently, which would be a first. But it would take much more than that still

Lebanon will likely be asked, upfront, to slash its public sector payroll; systematize tax collection; lift most subsidies; and float its currency, to reduce the trade deficit by making imports more expensive

The IMF will probably insist, also, on seeing state investments redirected toward productive sectors that may give the economy a chance to recover—rather than fund dubious projects to enrich oligarchs

All such demands challenge the Lebanese system at its core. While biting society, they would hamper much of the clientelism, corruption, and complacency which the country’s elites have been living off for decades

Given the relatively small amounts to be expected from the IMF (which estimates place at less than 5 billion over several years), it seems unlikely that factions would accept such costly conditions

For now, it would seem that they still don’t grasp what the IMF is: neither another donor that can be exploited nor the agent of some malign conspiracy, but quite simply the lender of very last resort

The IMF talks thus puts Lebanon at a crossroads: These negotiations only make sense if Lebanon is ready to transform, and accept additional pain caused by austerity measures that would subvert the current system

In that case, the few billions Lebanon would borrow from the IMF could at least be put to good use, to help cushion the social costs and seed a new economy through productive investments

However, these talks, absent any willingness to overhaul the system, will prove pointless or worse: yet another excuse that factions will exploit to avoid proposing urgent solutions of their own