BEIRUT: Prime Minister Saad Hariri said Friday the implementation of CEDRE investment projects, worth billions of dollars pledged to Lebanon by international donors, would begin after his talks with the French president next week.
“Today we have a golden opportunity, and CEDRE will be launched after my visit to Paris and my meeting with French President Emmanuel Macron. Then we will be able to benefit from these loans,” Hariri said during a Q&A session with participants at the Digital Lebanon Conference held at the Phoenicia Hotel.
Hariri is set to hold talks with Macron on Sept. 20. The discussions will focus on bilateral relations, developments in the region and the implementation of decisions of the CEDRE conference, hosted by France in April last year.
“CEDRE is based on investing in the infrastructure, which will provide liquidity to the Lebanese economy and thus generate economic growth. The McKinsey study also focuses on sustainable growth and determines plans on a scientific base,” he said.
Last year, U.S.-based consultancy firm McKinsey & Company presented the Lebanese government with a five-year, wide-ranging plan to diversify and modernize the productive sectors of Lebanon’s economy.
Hariri said the government, in the 2019 budget and the draft 2020 state budget, was taking necessary reform measures to show the world that “Lebanon is on the right track” - such as drafting essential laws to fight corruption in the public administration and transformations toward a digital economy.
“I am very optimistic about the future of Lebanon’s economy because all we are doing is based on scientific foundations and is not done randomly. It will show that we are a stable state that is doing what is needed to achieve progress and growth,” he added.
Hariri reiterated his call for partnership between the public and private sectors to improve the worsening economic crisis and stimulate the stagnant economy, saddled with a soaring national debt of $85 billion, equivalent to about 150 percent of gross domestic product, slow growth and a high budget deficit.
He called for a greater private-sector role in the country’s economic affairs. “The public sector cannot manage all the sectors it is managing today,” he said.
Hariri underlined the importance of transforming Lebanon’s economy into a digital economy to reduce red tape at ministries and public institutions. “I strongly believe that transformation into a digital economy will take Lebanon to a much better place,” he said. He emphasized that a digital economy was the first road toward fighting corruption and carrying out necessary reforms. “There is a strong team working to transform Lebanon into a digital country,” Hariri said.
The premier underlined the need for consensus among various parties on the reforms the government plans to carry out, including amending laws.
“Give me one year without any political problems, then the sky will be Lebanon’s limits. We will then be able to resolve all economic problems from which Lebanon is suffering,” Hariri said.
As part of austerity measures in the draft 2020 state budget, which the Cabinet would begin discussing next week, Hariri said there would be no extra spending, “except for investment.”
Last week, Macron telephoned Hariri to express relief over the progress being made toward launching the CEDRE investment projects, in the first foreign praise of the Lebanese government’s push to enact reforms recommended at the conference. Macron and Hariri agreed to pursue in-depth discussion on accelerating the implementation of reforms and investment projects in Lebanon and ways of enhancing stability in the country and the region during the premier’s visit to Paris.
Their phone conversation came a day after a French envoy tasked with following up on the implementation of the CEDRE conference’s decisions wrapped up a four-day official visit to Lebanon.
After talks with President Michel Aoun, Hariri and more than 30 ministers, civil society groups and businesspeople, Pierre Duquesne, the interministerial delegate, assured the Lebanese that the CEDRE funds were not under threat despite a delay to the implementation of essential reforms. However, he underlined the importance of acting quickly to implement fiscal and infrastructure reforms to fix Lebanon’s economic woes.
At the conference, international donors pledged more than $11 billion in soft loans and grants to finance a series of infrastructure projects that the Lebanese government outlined in its Capital Investment Program.
However, unlocking the aid was contingent on the Lebanese government implementing a string of key structural economic and fiscal reforms designed to shore up the economy, reduce the budget deficit, overhaul the frail electricity sector, fight corruption in the public administration and curb the waste of public funds.
Parliament in July ratified the 2019 state budget, which sought to address Lebanon’s fiscal woes by reducing the deficit-to-gross domestic product ratio to 7 percent, down from more than 11 percent in 2018.
The 2020 budget is expected to further reduce the deficit. According to the Constitution, Cabinet should send the budget to Parliament in October; Parliament then has until the end of the year to pass it.
Meanwhile, the members of the International Support Group for Lebanon met Friday and welcomed the Sept. 2 economic meeting chaired by Aoun at Baabda Palace that agreed on measures to face the country’s economic challenges, in line with Lebanon’s economic vision and its commitments at the CEDRE conference.
Noting with concern the implications of economic assessments and those of the credit rating agencies and the International Monetary Fund, “the ISG welcomes the commitment by Lebanon’s leaders to complete its annual accounting of its expenditures and adopt the 2020 budget within the time frame stipulated in the Constitution and with the stated intent to further reduce the deficit,” according to a statement released by the office of the U.N. special coordinator for Lebanon.
“The ISG welcomes the referral of the draft 2020 budget along with critical reform legislation to the Council of Ministers on Sept. 12.”
The ISG urged Lebanon’s leaders to promulgate “a transparent plan for reform and to act expeditiously to adopt fiscal, structural and sectoral reforms so as to improve the government’s fiscal position, enhance the overall business environment and support the development of productive sectors, infrastructure and basic services, including through privatization.”
“In parallel, it is crucial that Lebanon implement governance reforms on anti-corruption and transparency measures, which it has identified as essential for its economic recovery and growth and in line with its commitments at CEDRE and the president’s economic blueprint presented at the 2 Sept. meeting,” the statement said. The ISG reiterated its support for “Lebanon’s sovereignty, stability and economic recovery and its hope for a prosperous, vibrant economy for the benefit of all its citizens in the near future.”