Kataeb Party Puts Forth Economic Vision for Lebanon

  • Economics
Kataeb Party Puts Forth Economic Vision for Lebanon

The Kataeb's Economic and Social Council held last month a conference at the party's headquarter in Saifi to press the approval of a state budget and stress the need for a comprehensive economic plan that sets out a long-term financial vision for the country.

At the end of the conference, attended by prominent experts and members of economic committees, a series of recommendations was issued as follows:

- Approving a state budget that reflects the Lebanese government's economic and social plan

Unfortunately, the 2017 state budget is being set out without a clear economic plan. Over the past 11 years, during which extra-budgetary spending reached its peak due to the absence of a budget, the state imposed taxes to cover its expenditures. Today, as the government is inching closer to approving new taxes, experts are forecasting an increase in the state's deficit that will amount to $5.2 billion. In 2018, the public debt is expected to reach $82 billion.

The absence of an economic plan paves the way for illicit and illegal practices. Random employment in the public sector turns out to be a weapon used in the electoral battle, thus allowing forces to campaign by offering services through the state institutions.

- Expenditures and Absence of Audits

While the Constitution stipulates that the yearly expenditures of the state must be examined by the Audit Bureau before approving the next budget, no auditing took place over the past 11 years amid calls to "clear" accounts and, therefore, dismiss the contentious case of the $11 billion amount that was illegally withdrawn from the state's treasury.

Participants in the conference demanded full abidance by the Constitution, saying that the 2017 budget must not be approved without finalizing the audit of previous years expenditures.

- Approving the budget as per the provisions of the Constitution

The government ought to abide by the Constitution's provisions when it comes to approving a budget. According to the country's supreme law, the budget should be yearly (applies to a one year period), comprehensive (includes all revenues and expenditures), integral and must not impose taxes to cover certain expenditures (i.e. no taxes must be imposed only to finance the salary scale).

- Reassessing the state's financial policy by setting out clear goals (Golden Rules)

According to international standards, Lebanon's deficit rate (10%) is abnormal. As the European Union fiscal rules clearly state that a country's public debt must not be higher than 60% of GDP, Lebanon's public debt reached $74 billion by the end of 2016, thus transcending the GDP with a 140% rate. It is useful to note that Greece was declared a bankrupt state after its public debt reached 120% of its GDP.

Accordingly, participants called on the government to set out clear goals for the 2017 budget by specifying methods to reduce the public debt.

- Allocating expenses to competitive sectors

The economic plan that the government should draw must include a reasonable distribution of expenses as funds must be diverted to sectors that are able to be competitive and can generate profits for the state.

Participants suggested that the state would accord more importance to the production of wine, olive oil and diary products knowing that local producers have proved their ability to compete international brands. On the other hand, the state have been allocating large amounts of money to the tobacco sector knowing that it is unable to compete with global brands.

- Steering the economy clear of political crises

It is crucially important to shield the economy from the ripple effects of political crises and trivial bickerings.

- Rejecting new taxes

Participants warned that burdening citizens with new taxes will definitely impact their purchase power, saying that this will afflict tremendous damage on the economy.

- Boosting economy by maintaining security and political stability

- Ending tax evasion

- Approving the salary scale while making sure that it is linked to reformist actions

- Endorsing reformist laws that would end corruption and boost productivity in the public sector

- Limiting random employment which entails unnecessary spending

- Enhancing the country's infrastructure and providing a favorable atmosphere for foreign companies to invest in Lebanon

Source: Kataeb.org