The cabinet of Lebanese Prime Minister Saad Hariri has to date met 19 times, working late into the night to try to hammer out the country’s budget. But the result thus far has been disappointing. The passing of an annual budget is one of the routine duties of any cabinet, and yet Hariri has managed to fall short – hastening Lebanon’s economic collapse.
With $80 billion national debt, the Lebanese economy and the government face many challenges, the primary one being the implementation of structural financial reform and strict austerity measures. Once these measures are in place, the way would be paved for the release of the $11 billion in pledges from the CEDRE conference held in Paris in the spring of 2018.
In reality, however, most of the cabinet’s proposed austerity and fiscal measures expose the incompetence of the Hariri government to draft a budget while avoiding a social uprising, one that would destroy what remains of the Lebanese state.
In order to augment government revenues, and instead of taxing the wealthy, the Hariri government plans to slash the salaries and benefits of its public servants. This measure also extends to government pensioners, including veterans of the armed forces and other security agencies. Naturally, this evoked the anger of those concerned, who refused to relinquish their rights, demanding that the government change its whole approach to the matter – a plea which was ignored by the ruling elite.
As a result, public sector workers and military veterans took to the streets, blockaded the government headquarters, and ultimately tried to storm it, a move that led security forces to violently suppress their fellow public servants. It was a sight that will surely do irreparable damage to the state’s morale.
Some voices from within the government were critical of these protests, reminding the public that such emergency measures were taken out of urgency rather than convenience, and that if they are not routinely implemented then the whole government and economic system is subject to collapse. While the government’s concerns are warranted, the public rightly has no confidence in their political elite, who have once again shown, via their proposed budget, that they are unwilling to reform.
The Hariri government plans to cut down the budgets of important institutions such as Lebanese University, the country’s only public university, while retaining millions of dollars in funding for stationary and office supplies, furniture, transportation fees, and even bonuses. It has also proposed a set of superfluous taxes on smoking water pipes in restaurants, gun permits, and tinted car windows, reaffirming its economic inaptitude and corruption.
While insisting on burdening underprivileged taxpayers, the political elite through its government representatives has blocked all attempts to impose taxes on lucrative sectors of the economy – those that happen to be owned by them or their clients. On the top of the list is the maritime property tax, which the state leases out to these tycoons for virtually pocket change: Millions of dollars of prime beach real-estate for less than a dollar per square meter, extending up to a duration of 99 years. Likewise and for no justifiable reason, the government continues to exempt ships exceeding 40 feet from taxation, which includes their luxurious yachts docked in Lebanon’s marinas.
Adding insult to injury, the Hariri government has failed to agree on a final draft to send to parliament, mainly due to the insistence of Foreign Minister Gebran Bassil, President Michel Aoun’s son-in-law, who wants to use the budget to lay the groundwork for his bid to become Lebanon’s next president.
Certainly, one of the main obstacles to economic recovery is government corruption. But the real elephant in the room is Hezbollah, Iran’s proxy militia with seats in Lebanese parliament, which Hariri and the rest of the Lebanese are refusing to openly confront. Iran’s total hijacking of Lebanon’s sovereignty has earned Lebanon political and, perhaps more importantly, economic isolation from its Arab brethren. In the past, they have provided Lebanon’s economy with a safety net, but will surely refrain this time around.
The different groups that have fallen victim to the Hariri government’s measures lack the ability to turn their divided calls into one simple and effective ultimatum, and declare these so-called rulers as illegitimate. If veterans, public sector workers, university professors, and the rest of the disenfranchised remain disunited, the ruling elite will simply brush them aside, and dissence against the Hariri government will be doomed. The protesters seem to have forgotten that they are getting what they voted for in the last election, and that reform comes not from politicians but from statesmen, which Lebanon critically lacks.
Makram Rabah is a lecturer at the American University of Beirut, Department of History. He is the author of A Campus at War: Student Politics at the American University of Beirut, 1967-1975. He tweets @makramrabah.