Firstly, we must acknowledge that this budget is not reformative, but rather merely operational, with a non-significant investment spending. It does not include a great number of expenditures, simply because it is meant to show a deficit-free budget. I see in this a kind of futile evasion and maneuvering. A budget without a deficit, yet it does not include the bill for importing fuel from Iraq; it also relies on financial support to the Lebanese army. We are in a state of war; where is the support to our displaced people from the war zone? And where is the plan for emergency funding and others?
This budget lacks any real tax reform. Indirect taxes still dominate it, consisting of levies from the general public through customs duties, value-added tax, property taxes, and other duties… For example, the elimination of the tax on the profits of currency traders, which are estimated at two and a half billion dollars.
Therefore, the real debate lies elsewhere. We must ask ourselves why we have been going in circles for over 4 years.
The answer is that everyone is tacitly in agreement to evade assuming the responsibility for the crisis. Consequently, solutions are postponed, and no one wants to gulp this bitter cup.
The debate can only be productive if it addresses the following:
– Firstly, do we want questioning and accountability? How should responsibilities be determined for those involved in the causes of this crisis? Or are we seeking a general amnesty for financial crimes, similar to the amnesty granted in the 1990s for civil war crimes? There is no doubt that the path of accountability is the better one, or else the crisis will recur in different forms, sooner or later.
– Secondly, we must be honest with depositors that this issue is complex, challenging, and requires sacrifices from various parties, i.e. the Government, the Central Bank of Lebanon, the banks, and the depositors. Resolving it is not possible except in the long term. Let us stop ignoring this reality. However, accountability can expedite the process; this requires an audit of deposits and categorizing them as legitimate or illegitimate, qualified or unqualified.
– Thirdly, what do we want from the banking sector? I would like first to emphasize that Lebanon cannot live without a banking sector, but this sector should not carry on its former trend. The banking sector is important and essential for Lebanon and should be governed by a system that prevents the intrusion of chaos which has prevailed in previous years and led to the current crisis. From this tribune I ask, why is there repeated delays in preparing a draft law to restructure the sector? What accountability, not only bankers, but also various parties responsible for the crisis in this sector, will be exposed to? such as the Central Bank of Lebanon, the Regulatory Authorities, the Ministry of Finance, and every participant in this crisis and what are its causes? Here, I would like to inquire about the draft law I submitted on 1-8-2023 to lift the banking secrecy and why it has not been so far discussed.
– Fourthly, do we really need a capital control law? Or should we forgive and forget? This issue is crucial, and this law requires a decisive decision away from the interests of any of the concerned parties, or else its fate is bound to failure.
– Fifthly, what about the currency exchange rate? Shall we stabilize its current rate or let it float on the Bloomberg platform, as suggested by the Central Bank of Lebanon? Knowing that the stabilization of the exchange rate is the main cause of the crisis that resulted in losses exceeding $72 billion.
– Sixthly, enough evading the signing of an agreement with the International Monetary Fund (IMF), which is a necessity and a confidence-building factor for Lebanon. To those who do not desire this agreement, I ask the question: What are your alternatives, and plans that can be executed?
– Seventhly, going back to the budget, it has become clear that the problem lies in the Public Administration. I believe that we can start by restructuring the Public Institutions, such as the Power Company and other sectors, rationalizing and downsizing the public sector, adopting automation, and, undoubtedly, combating widespread corruption.
– Eighthly, we must acknowledge that the previous economic model has irreversibly collapsed. This opens up a discussion about which economy we want, and what are the tools for a new model, which can only succeed through redefining Lebanon’s role in the region and the world.
In summary, we need to change our way of thinking and dealing with this issue.