SUN 24 - 3 - 2019
Date: Apr 6, 2018
Source: The Daily Star
CEDRE presents stepping stone for necessary reforms
Khaled Zeidan

On Monday morning I received a forwarded voice message, which appeared at first glance similar to the endless barrage of trivialities we all have to cope with.

I then noticed the same file being sent multiple times and from a diverse group of contacts. Feeling slightly intrigued, I opened the attachment and listened to what appeared to be a leaked closed-door conversation at an IMF meeting where the identity of the speaker remained anonymous.

It later turned out the speaker had nothing to do with the IMF nor was the event in any way associated with the international organization.

The opinion of the speaker was rather clear, he argued that Lebanon is heading toward an inevitable economic and financial meltdown triggered by a myriad of corruption and bad policy. The only solution presented is a fait accompli, with the Greek crisis being touted for fear mongering and dramatic effect.

A second thesis presented by the speaker is the failed economic notion of “shock and awe,” similar to what Jeffery Sachs “the economist” had advised the Russian government to adopt as policy during Perestroika.

In hindsight, that approach failed entirely, leading to the destruction of the middle class, the creation of the oligarch and a series of financial calamities that lasted well over 10 years. For respite Russians eventually returned to a more centralized and authoritarian regime.

As a native of Beirut who returned to Lebanon in 1996, and as professional that has worked in investments and capital markets ever since, I have observed the pendulum of confidence swing between pessimism and optimism for the past 25 years. I, therefore, beg to differ, we are not heading toward an abyss but rather getting out of one.

For starters let me concede that the majority of the issues raised by the phantom orator are in fact true. They, however, are symptoms, not causes or solutions. I think most would agree with me when I say that what we need are solutions.

Solutions that are incremental and steady, and are sometimes unpopular.

Solutions that do not devastate a stretched middle and working class with all the potential social unrest that could ensue.

Solutions that are built on consensus and compromise, which is precisely what we have seen in the past 18 months. Much progress has in fact been made and there is plenty more to be done.

Solutions that can create jobs, attract new investment, promote growth, and reshape the funding structure of the economy, which is what we are seeing at this important juncture.

The to-do list is long and demanding but we already can see a structured base forming.

Actually, the fact that a donor conference for Lebanon is taking place in Paris this week further confirms that we are again able to talk to the international community and that we have a credible plan to build on.

The IMF has publicly expressed support to the Capital Investment Program albeit coupled with fiscal adjustment and structural reforms, which are a must.

I will not dwell on grievances related to past conferences and they are plenty. I will, however, insist that the CEDRE conference will be a stepping stone for more necessary reforms, and the mere fact that it has become a reality is an achievement in itself.

I do agree that our economy has to transform itself top down and I think alongside it so will the social contract, but this needs to happen slowly and in phases to maintain our delicate stability.

Let us be frank: We all want to eliminate corruption, poverty, pollution, injustice, sectarianism and all other ailments.

However, to do so we need to eliminate the root causes, and that can only be achieved gradually and again through consensus.

As for the gloom and doom naysayers; I think it would be more constructive if they would propose workable solutions for problems at hand and therefore help in building much-needed national confidence rather than waste their energy undermining it.

Khaled Zeidan is the managing director of MIC Ventures.

A version of this article appeared in the print edition of The Daily Star on April 05, 2018, on page 3.

The views and opinions of authors expressed herein do not necessarily state or reflect those of the Arab Network for the Study of Democracy
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