THU 4 - 6 - 2020
Date: Aug 19, 2019
Source: The Daily Star
Aoun: Implementation of reforms to begin in October
Hussein Dakroub| The Daily Star
BEIRUT: Lebanon is expected to begin implementing in October a set of economic and financial measures agreed by its top leaders that will boost economic growth, President Michel Aoun said Sunday, vowing that he would attend to this himself. Aoun was referring to decisions taken at a top-level financial and economic meeting held at Baabda Palace on Aug. 9 aiming to stimulate an economy, which has been growing slowly for years and is struggling with one of the world’s heaviest public debt burdens.

Meanwhile, Prime Minister Saad Hariri, boosted by the recent reconciliation between the two main rival Druze parties, is set to increase Cabinet sessions to make up for lost time during the six-week hiatus caused by the aftermath of the deadly Aley clashes, officials said Sunday.

“When he returns from his U.S. visit, Prime Minister Hariri is expected to intensify Cabinet sessions to compensate for lost time and address economic, financial and environmental problems facing the country,” Information Minister Jamal Jarrah told The Daily Star.

Jarrah, who belongs to Hariri’s Future Movement, said he expected the Cabinet to meet Thursday at Beiteddine Palace, the president’s summer residence.

After the financial meeting in Baabda, Hariri said agreed steps included finishing the 2020 budget on time, drawing up a plan to start $3.3 billion in projects approved by Parliament, full implementation of a power sector reform plan, and laws to fight tax evasion and regulate public tenders.

“I will personally tend to the implementation path of the decisions of the financial and economic meeting” in cooperation with Hariri, Parliament Speaker Nabih Berri and other parties in government, Aoun said in written comments to Reuters.

He said this aimed “to guarantee political stability in Cabinet and outside it and to secure the greatest amount of productivity,” including in the implementation of the 2019 budget and its reforms.

Aoun said he expected “the implementation path” to begin “with the start of October after the conclusion of the current preparations ... which will lead to lifting of the growth rates, reflecting positively on the economic and financial situations.”

Parliament last month passed the 2019 state budget, which seeks to heal Lebanon’s fiscal woes by reducing the deficit-to-GDP ratio to 7 percent, down from more than 11 percent in 2018. The budget contains a string of austerity measures, including cutting public spending, tax hikes and a reduction of public-sector benefits and pensions that aim to slash the deficit.

Lebanon is under growing international pressure to carry out structural economic reforms recommended at last year’s CEDRE conference. The reforms are deemed essential to unlock over $11 billion in grant and soft loans pledged by international donors to bolster the ailing economy and implement key infrastructure projects.The International Monetary Fund said in July this year’s deficit was likely to be well-above a targeted 7.6 percent of national output.

Aoun said work was underway to approve the 2020 budget in the constitutional time frame. It would include “new, resolute reforms” agreed at the Aug. 9 meeting to reduce the power sector deficit, improve tax collection and fight Customs and tax evasion.

Aoun also said frameworks must be put in place for implementing a plan drawn up by management consulting firm McKinsey for revamping the economy and that this should coincide with the start of projects outlined at the CEDRE conference.

Industry Minister Wael Abu Faour, who belongs to the Progressive Socialist Party headed by former MP Walid Joumblatt, said the priority today was to heal economic and financial woes.

“According to my information, I expect Prime Minister Saad Hariri, upon his return [to Beirut], to call for intensive Cabinet meetings in order to follow this path [finding solutions to the economic crisis],” Abu Faour said during a meeting with heads of municipalities in the Rashaya district.

He dismissed fears of an economic collapse. “The [economic] situation is still under control. What is more important is that there is a clear political will reflected in the financial meeting held at Baabda Palace that agreed on a road map which the Cabinet will discuss and approve,” Abu Faour said.

The Aug. 9 financial meeting was followed on the same day by a reconciliation gathering between Joumblatt and his Druze rival, Lebanese Democratic Party head MP Talal Arslan, hosted at Baabda Palace by Aoun and attended by Berri and Hariri, that led to a Cabinet session the next day. The reconciliation also cleared the way for a resolution to the aftermath of the June 30 Qabr Shmoun incident that had crippled the government for more than a month over which court to handle the incident.

The case is currently being investigated by the Military Tribunal after the Internal Security Forces’ Information Branch concluded its probe. The incident in the Aley town left dead two men who were in the convoy of Minister of State for Refugee Affairs Saleh Gharib, who belongs to the LDP.

Hariri, who had not returned to Beirut when The Daily Star went to print around midnight Sunday, hosted U.S. Secretary of State Mike Pompeo for lunch at his ranch near Washington Saturday, meeting for the second time since the premier traveled to Washington last Monday. The lunch also included Pompeo’s wife Susan, Hariri’s family and former Minister Ghattas Khoury, a political aide to the premier.

Following his first meeting with Pompeo Thursday, Hariri pledged to shield Lebanon from the negative impact of U.S. sanctions on Hezbollah.

“There are always sanctions [on Hezbollah] threatening Lebanon. But it is my duty as prime minister to spare the Lebanese state these sanctions and to avoid any impact on the Lebanese economy,” Hariri told a group of journalists in Washington.

The U.S. has in recent years stepped up sanctions on Hezbollah, long labeled by Washington a “terrorist organization,” and its patron Iran.

Speaking to The Daily Star, Jarrah said Hariri’s U.S. visit was “successful” and it would have “positive results” in Lebanon’s interest.

“Hariri’s visit reasserted U.S. support for the Lebanese government and the country’s stability, as well as continued military support for the Lebanese Army,” he said. Jarrah added that the visit showed U.S. readiness to help reach a settlement to the land and maritime border dispute between Lebanon and Israel.

The U.S. has been attempting to act as a mediator between Lebanon and Israel in order to reach a solution to the maritime border dispute between both countries.

Lebanon and Israel have ramped up efforts to find a solution to the border dispute as both look for potentially rich offshore natural gas deposits in nearby waters. Around 856 square kilometers of sea is disputed between the two countries.

On the significance of Hariri’s invitation to Pompeo for lunch at his ranch, Jarrah said: “This indicates the deep-rooted relationship between the U.S. administration and the Lebanese government and the respect the administration has for Prime Minister Hariri.”

Meanwhile, a high-ranking PSP delegation Saturday visited Aoun at Beiteddine Palace, in a move seen as strengthening the intra-Druze reconciliation and de-escalation following tensions over the Qabr Shmoun incident.

The Aley shooting was an “accident that is now behind us,” Education Minister Akram Chehayeb, one of two PSP ministers, said after the meeting with Aoun. “The judiciary will take its course.”

Aoun shared the sentiment, saying he was pleased “that we have been able to move on from this unfortunate incident.”

“We have sought to remove the traumatic effects [of the shooting] which we hope will be completely eliminated soon,” he added.

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