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Cabinet must secure refugee aid: economists

  • The Cabinet appointed seven ministers, split between the March 14 and March 8 coalitions with one centrist, to draft the policy statement.

BEIRUT: The newly formed government must urgently secure the funds pledged by donor nations for Syrian refugees and persuade Gulf states to amend their advisories against travel to Lebanon, economists said Friday.

The economists agreed that while the new Cabinet, whose mandate is to organize presidential polls before the May 25 constitutionaldeadline, couldn’t perform miracles in three months, it was capable of taking some quick measures to put the country on the right path.

“There are a few things the Cabinet can do in a short period. Among these things is speeding up the delivery of funds from donor states to help alleviate the burden Syrian refugees [pose] on Lebanon,” economist Ghazi Wazni told The Daily Star.

The presence of the Syrian refugees has widened the budget deficit further, increased unemployment among Lebanese and mounted pressure on the infrastructure such as electricity and water.

Lebanese officials have urged the U.S., Europe and Arab states to earmark at least $1 billion to Lebanon to enable the authorities to cope with the growing Syrian refugee influx.

But donor states reiterated on many occasions before the Cabinet formation that the financial and technical pledges to Lebanon to help it curb the cost of tending to the Syrian refugees could only be fulfilled once politicians formed a government.

“We can also urge the Arab Gulf states to lift the travel ban. The arrival of Arab tourists will definitely improve GDP growth and ultimately the state’s revenue,” Wazni argued.

The GCC states have urged their citizens not to travel to Lebanon for security reasons and to protest Hezbollah’s involvement in the war in Syria.

The absence of Arab Gulf tourists has dealt a blow to tourism, which is seen as one of the main pillars of the Lebanese economy.

Louis Hobeika, professor of finance and economics at Notre Dame University, advised the government to hammer out the 2014 draft budget even if it does not go through Parliament.

“I know Parliament may not have the time to discuss the budget, but this bill must be accomplished in order to meet the deadline,” Hobeika said.

Echoing Hobeika, Wazni argued that according to the law, the Finance Ministry must introduce the 2014 budget in February or April.

“Drafting the budget should always be one of every finance minister’s top priorities,” Hobeika said.

The country has been without an official budget since 2005, when former Prime Minister Rafik Hariri was assassinated.

The failure by successive governments to pass a budget has further undermined the country’s credibility and was one of the main reasons behind the downgrade of Lebanon’s debt outlook by rating agencies.

Both Wazni and Hobeika also underlined the importance of filling the key vacant positions in government departments.

“Most of the key positions in the government departments have been vacant for the past six to seven years. Now that we have a national unity Cabinet, there should be no problem in speeding up the appointments as soon as possible,” Hobeika said.

But economist Samir Makdisi insisted that Cabinet’s short life span would make it very difficult for the ministers to make major decisions on the economy and finance.

“Why should this Cabinet make major commitments if it realizes it will only stay in office for three months? They shouldn’t make major commitments and then throw the ball to the new government,” he said.

But he stressed that the Finance Ministry could improve tax collection or pass the two decrees needed to auction offshore blocks to oil companies on April 10.

 
A version of this article appeared in the print edition of The Daily Star on February 22, 2014, on page 4.
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Summary

The newly formed government must urgently secure the funds pledged by donor nations for Syrian refugees and persuade Gulf states to amend their advisories against travel to Lebanon, economists said Friday.

The economists agreed that while the new Cabinet, whose mandate is to organize presidential polls before the May 25 constitutionaldeadline, couldn't perform miracles in three months, it was capable of taking some quick measures to put the country on the right path.

Louis Hobeika, professor of finance and economics at Notre Dame University, advised the government to hammer out the 2014 draft budget even if it does not go through Parliament.

Echoing Hobeika, Wazni argued that according to the law, the Finance Ministry must introduce the 2014 budget in February or April.


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