Abu Dhabi, UAEMonday 24 June 2019

New Lebanese government will ‘work, work, work’

The new Lebanese cabinet has vowed to implement tough economic reforms

Lebanese Prime Minister Saad HarirI attends a meeting at the government palace in Beirut. Reuters
Lebanese Prime Minister Saad HarirI attends a meeting at the government palace in Beirut. Reuters

Off the back of Parliamentary approval for its plan of work, Lebanon’s cabinet faces a raft of challenges and calls for urgent reform as it enters its first week as the official government.

“My decision and the government’s decision is to work, work, work”, said Prime Minister Saad Hariri on Friday in a speech just before the parliamentary vote capped off a marathon dayslong debate about the government’s policy statement. The cabinet will is expected to meet on Thursday for the first full session.

The country, which has the third-highest debt-to-GDP ratio in the world, is plagued by corruption, inefficient public service, high living costs, and roughly a third of its workforce is unemployed. The government hopes to pass legislation and reforms to unlock nearly $11 billion in loans and grants revamp Lebanon’s crumbling economy.

On Monday, Mr Hariri’s first move was to host a meeting with representatives of international donor funds that participated in last April’s Cedre conference in Paris.

The Prime Minister has repeated several times that his top priority is to move forward with the painful reforms needed to access the assistance. The government is committed to reducing its fiscal deficit by 1 per cent of its GDP per year over the next five years.

During the three-day debate that preceded the Parliament’s vote on Friday, several MPs were highly critical of the previous governments’ lack of transparency and claimed it was corrupt. This, some said, has pushed Lebanon to the brink of economic collapse.

Mr Hariri, who has held the post three times now after serving in 2009 and in 2016, tried to defend himself. “We heard a lot of [comments] about waste, corruption, project delays, etc. There’s a lot of exaggeration”, he said on Friday. “Some comments gave the impression that some of my colleagues only arrived in Parliament yesterday and that we have been alone in power for the past 15 years.”

Mr Hariri may have been referring to the fact that many of the most critical MPs were also members of Lebanon’s main political parties that have been represented in government for over a decade. Hezbollah, which has been part of the government since 2005 and is also traditionally an opponent to Mr Hariri’s Future Movement, has been the most vocal party in calling for an anti-corruption campaign. The party’s leader, Sayyed Hassan Nasrallah, has said in speeches since the government was announced that Hezbollah would ensure anti-corruption was top of the agenda.

Mr Hariri deflected the blame to “wars, chaos and instability”, referring to the war in neighbouring Syria that pushed over 1 million refugees across the border into Lebanon and scared away investors and tourists. Throughout the war, Lebanon has suffered dozens of bloody terror attacks and clashes linked to the neighbouring conflict although the situation has been significantly improved in the past three years.

If and when the Cedre money is unlocked, the government’s most immediate reforms are expected to target the inefficient state-run electricity sector. It will likely set up public-private partnerships with major companies such as Siemens and General Electric.

The national utility company, Electricite du Liban (EDL), has been unable to provide regular power supply since the end of the civil war in 1990 and runs a staggering loss over around $2 billion a year. To compensate for the daily power cuts, the Lebanese have to pay hefty fees to private generator owners.

Another priority will be to vote the 2019 budget which was put on hold as Mr Hariri struggled to form a government between May 2018 and January 2019. In its ministerial statement, the government has promised to reduce spending by 20 per cent compared to the previous year.

But the lack of budget has had tangible repercussions on daily life in Lebanon. EDL was forced to increase electricity cuts in late January because it has not received state funds to continue paying for imported fuel to run its power plants.

An emergency decree to transfer 400 million LL (Dh 1 million) was signed last Friday by the ministers of energy and finance as well as the Prime Minister and the President, said an EDL employee who requested anonymity because they had not received prior approval to speak to the media. This should allow electricity distribution to return to “normal” in the next few days, which means daily cuts between 3 and 12 hours a day.

However, some Lebanese are not convinced by all the promises of hard work and change. Several dozen members of left-wing parties demonstrated in central Beirut on Sunday against the new government.

“There is no trust in the government: Cedre merely means increasing indirect taxes on the Lebanese and increasing their poverty,” Mahmoud Haidar, former president of the association of state employees, told the state-run National News Agency. “Don’t waste your time with flowery words about corruption because the Lebanese know very well that … it’s a part of political and sectarian quotas that you adhere to”.

Power in Lebanon is divided between the country’s many religious groups, which encourages sectarianism and nepotism. Changing that is not part of the government’s priorities despite the fact that the Taif Accord that ended the 15-year civil war states that abolishing political sectarianism is “a fundamental national objective.”

Updated: February 18, 2019 09:53 PM

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