World Bank urges Lebanon to reduce size of public sector

BEIRUT: The World Bank said Lebanon should reduce the overstaffed public sector by offering some of the staff early retirement packages. "Lebanon's overall public wage bill is relatively low by international standards, yet opportunities exist for considerable savings through future retirements that should be used to build a competent civil service capacity," the World Bank said in the last issue of Lebanon's quarterly update magazine.

The public sector's salaries represent more than 35 percent of the total government expenditures.

It is estimated that there are more than 220,000 civil servants; army and security forces personnel and contractual employees on the government payroll.

"Lebanon's public sector is large, underpaid and unmotivated, prone to corruption and unresponsive to people's needs, which is a major source of the citizens' dissatisfaction with the State," the publication said.

With a public debt of more than $36 billion, excluding dues owned to municipalities, hospital owners, contractors and land expropriations, Lebanon is under increasing pressure to carry out radical reforms and privatize all of its state owned assets.

Economist Charbel Nahas said the idea of restructuring the public sector is not to layoff redundant staff and save money but rather hire qualified and competent people at the current salary market rates.

"There are many ministries and public departments that urgently need qualified civil servants," said Nahas.

Officials say that the Finance Ministry has a shortage of tax collectors, noting that the government can improve the tax revenues if more trained staff are added to the current number.

"On the whole, it is safe to say that the government in Lebanon is severely overstaffed for the functions it currently performs," the World Bank said.

It added that a better paid, more competent, smaller public force should be the objective.

"In the next 10 years, up to 45 percent of the current public labor force [some 220,000 workers, including civil servants, contractual workers and military personnel] will retire," the World Bank said.

"The government should build on this opportunity to reduce its labor force through attrition. Funds saved from the current wage bill should be used to increase the salaries of civil servants, offer regular staff training, and cover reallocation of staff to new tasks."

The World Bank underlined the need to review the employments needs and their adequacy for the government's objectives.

It added there should be a civil service census and called for the termination of the hiring and wage freeze in place since 1997.

The World Bank, the U.S., Europe and some of the Arab countries pledged to help Lebanon if the government proceeded with reforms and a privatization program.





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