WED 18 - 9 - 2019
May 18, 2019
The Daily Star
‘We have to take action’: PM sounds alarm on govt, reforms
Hussein Dakroub| The Daily Star
BEIRUT: Prime Minister Saad Hariri Friday sounded the alarm about “political practices” that are blocking government work, delaying the endorsement of the 2019 draft state budget and harming the power-sharing formula stipulated in the 1989 Taif Accord. He also warned that the government’s program presented to last year’s CEDRE conference to salvage the ailing economy was in jeopardy if implementation of urgent reforms were delayed for six months or a year.
Hariri’s dual warning came as the Cabinet held a new round of inconclusive discussions Friday on a draft austerity budget that seeks to reduce state spending and generate revenues in order to slash the deficit, a key demand of international donors. The Cabinet will meet again Sunday.
“The Taif Accord had revived working with the full concepts of partnership. But political practices sometimes presented a distorted picture of partnership,” Hariri said in a speech at an iftar he hosted at the Grand Serail. “The Lebanese had agreed on a national accord formula and on a new constitution, but they did not announce agreement on a formula for a coalition among sects or sharing the state among sectarian groups.”
Hariri was apparently referring to Foreign Minister Gebran Bassil, the head of the Free Patriotic Movement, who had been accused by Future MPs and other politicians of infringing on the prime minister’s powers.
“The Constitution is clear in this respect. We want partnership to be translated through constitutional institutions, namely the Cabinet, which is currently tackling, with responsibility, economic and financial reforms and the causes of the squandering of public spending,” Hariri said.
Referring to political bickering and infighting among ministers that had paralyzed government productivity in the past, Hariri said: “When we say that the executive authority is the combined Cabinet, this means that the Cabinet is destined to be the table for responsible dialogue and responsible decisions and the first line of defense for applying laws and protecting the rights of the Lebanese. But when the Cabinet is turned into political barricades like what happened in the past, the executive authority is obstructed and the state’s work is halted.”The Taif Accord, which ended the 1975-90 Civil War, was signed by Muslim and Christian MPs in the Saudi summer resort in 1989. The deal called basically for equal power sharing between Muslims and Christians.
During the iftar, attended by former President Michel Sleiman, former premiers Fouad Siniora and Najib Mikati, a representative of Speaker Nabih Berri, a number of ministers and MPs, Grand Mufti Sheikh Abdel-Latif Derian and representatives of Christian and Muslim religious leaders, Hariri said he was active on reaching consensus on economic and financial policies and administrative reforms with the agreement of everyone, refusing to engage in political outbiddings.
Hariri reiterated that the government’s program to shore up the flagging economy presented at the CEDRE conference was in peril if key financial economic reforms were further delayed.
“Concerning the financial and economic reformist program, we have a program on which we agreed and presented at the CEDRE conference. The program provided an opportunity for the country and requires bold decisions and a will by all the partners to stop the financial and administrative bleeding, launch an investment program, upgrade services and open the doors to new job opportunities for young men and women,” he said.
“What we reach today would be useless if we decided to postpone the urgent decisions [on economic reforms] for six months or a year. The decision is in our hands and our partners at the CEDRE conference are waiting. We have to take action,” Hariri added.
Lebanon is coming under growing international pressure to enact a series of key fiscal and economic reforms recommended at the CEDRE conference. The reforms are deemed essential to unlock over $11 billion in grants and soft loans pledged by international donors to bolster the economy, which is suffering from a soaring national debt of $85 billion, slow growth and a high budget deficit.
Before the iftar, Hariri chaired a Cabinet session, the 14th in a series of meetings devoted to examining draft budget.
The Cabinet, which decided to meet again at 9:30 p.m. Sunday, took measures against tax and Customs evasion.
“The most important decisions taken today [Friday] are controlling spending, and tax and customs evasion. Concerning tax evasion, there are measures including the adoption of the certified financials. If a company or anyone wants a bank loan, their financials must be certified by the Finance Ministry,” Information Minister Jamal Jarrah told reporters after the meeting at the Grand Serail.
“Also, the VAT is now applicable to LL50 million companies, whereas it was applicable to LL100 million companies. There are some procedures that the Finance Ministry started applying, which include real-estate valuation. We will study it and submit it to the Cabinet. This is not linked to the budget,” Jarrah said. “We also asked municipalities to inform the Finance Ministry about all businesses that open in their purview so the Finance Ministry can follow up the subject of tax evasion.”
On the issue of Customs evasion, a number of measures were taken. “There are restrictions on smuggling through illegal crossings, and the Defense Ministry has been charged with setting up a mechanism for this issue. As well as the closure of shell institutions and many other measures that have been approved earlier,” he said.
Jarrah said Finance Minister Ali Hasan Khalil distributed the legal articles after their amendment.
“He included all the legal articles we agreed on in the budget and provided the Cabinet’s General Secretariat with a CD-ROM in this regard, to be printed and distributed to the ministers,” Jarrah said. He added that the budget’s final figures had been edited and were on the CD.
Cabinet also drew up a proposal to lower the daily transportation allowance for public-sector employees from LL8,000 (around $5) to LL6,000.
Despite passing some items in the budget, ministers remain split over controversial measures related to proposed cuts to public-sector wages and benefits, including those related to military veterans.
They are also yet to agree on cutting wages for public officials that include the ministers themselves as well as lawmakers.
The Cabinet session came as public-sector employees and military veterans ramped up pressure on the government over proposed cuts to their wages and retirement benefits in the draft austerity budget.
The League of Public Administration Employees Friday staged a nationwide strike, protesting against what it described as a “discouraging atmosphere” in the Cabinet’s budget discussions.
At the same time, military veterans staged a sit-in in Beirut’s Riad al-Solh Square to protest against proposed cuts to their end-of-service benefits.
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