Abu Dhabi, UAETuesday 20 August 2019

Lebanon's central bank operating normally despite protests blocking entrances

Retired soldiers are protesting against pension and benefit cuts as the government debates a draft budget

Retired Lebanese soldiers blocked access to the central bank’s headquarters in Beirut on Monday morning, hoping to pressure the cabinet as it considers austerity measures that could include reducing military pensions and advantages.

Demonstrators gathered on Sunday evening to block the Banque du Liban's entrances, preventing employees from entering the building on Monday morning.

About a hundred people took part in the sit-in, which also blocked one of the city’s main roads in the busy neighbourhood of Hamra.

“I served the army for 30 years and now they want to throw me out in the street,” Fouad Akoum told The National.

“They are taking money from the poor, from army veterans who paid the price of blood. What did they pay? They just steal”, the 73-year-old continued, in reference to Lebanese politicians who are generally held in low esteem by the public.

Retired soldiers also obstructed the entrance to the central bank’s building in Lebanon’s second biggest city Tripoli and protested in several other locations.

The bank’s union leader Abbas Awada told The National that little work was achieved on Monday at the Beirut headquarters.

An official told Reuters that the bank was operating as normal.

Several retired soldiers said that they intend to remain at the bank’s headquarters until the cabinet backs down.

“We don’t mind sleeping on the ground. We’re soldiers. We’re used to it,” said Zouheir Daw, a retired officer candidate.

However, the state-run National news agency reported that the sit-in had been suspended upon request of Defence Minister Elias Bou Saab who said he would he would ask the cabinet to remove articles pertaining to the military from the 2019 draft budget.

The cabinet is considering measures that would reduce salaries in the entire public sector. Discussions, which lasted two weeks, are entering their last phase, a government spokesperson said. Parliament will then vote on the budget.

Thus far, the cabinet has not addressed potential salary reductions.

But several options are on the table, according to local media that have obtained leaked copies of the budget. One proposal would reduce military pensions by six per cent.

The government is desperate to lower its deficit from 11.2 per cent last year to under nine per cent. The public debt is the fourth highest in the world, equivalent to 150 per cent of GDP.

Civil servants’ salaries, pensions and benefits represent the state's biggest expense, followed by the cost of servicing debt.

Every month during a soldier's years of service, the government withholds six per cent of his pay to finance his pension. But this contribution is insufficient to fund the scheme, meaning the state has to contribute public funds, said retired general Georges Nader.

However, one of the reasons the state is struggling to pay the military's pensions is because it never set up a special military retirement fund that was supposed to be created in 1945.

"It's the government's fault, not ours," said Gen Nader.

Today, the money collected for soldiers' pensions goes straight to the Finance Ministry and it is unclear how it is spent.

Additionally, some measures recently taken by the government will reduce expenses on the military over the next few years, retired general Khalil Helou told The National.

The country’s national threat level has recently been reduced from the maximum level in certain areas of the country, which means that soldiers will not be required to be on duty as much as they used to be. Lebanon is officially still at war with neighbouring Israel and regularly faces terrorist attacks.

When soldiers retire – usually in their mid-fifties – they receive compensation for overtime worked during their career, so less active duty will eventually reduce the total pension burden on the state.

Since the government announced its intention to slash civil servants' salaries last month, demonstrations have been organised by several public bodies, but retired soldiers have been the most vocal, blocking roads with burning tyres to protest any cuts to their pensions and benefits.

In front of the bank’s headquarters, a dozen active duty soldiers kept an eye on their older peers. By law, they are not supposed to demonstrate or speak to journalists.

Asked whether they sympathised with the protestors, a soldier in his thirties paused for a few seconds, smiled slightly, and answered: “They are speaking for us”.

Updated: May 13, 2019 07:29 PM