Economy

New council tackles Lebanon's economic challenges

By Junaid Salman in Beirut

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Lebanon's newly activated Economic and Social Council meets with political party representatives at the council’s headquarters in Beirut on June 11th. [Photo courtesy of the Economic and Social Council]

Lebanon's newly activated Economic and Social Council met with representatives of political parties last month to hear their economic and social vision for the country.

The June 11th meeting, convened by council president Charles Arbid, sought practical solutions and proposals on how to address current economic issues.

The government had asked that the council ensure representatives from the economic, social and professional sectors participate in the decision-making process and help to formulate the state’s economic and social policy.

In addition to formulating policy, the council -- whose members were appointed in October by the Lebanese cabinet -- will work to develop dialogue, co-operation and co-ordination between the various sectors.

"A mechanism has been put in place for meetings in which political parties and currents will present their economic and social visions," Arbid told Al-Mashareq.

Political convergence

"The meeting is an important step as a platform for discussion and dialogue on economic issues between the political parties in Lebanon," said former Finance Minister Raya al-Hassan, who represented the Future Bloc at the meeting.

"We have to wait and see what outcome is produced by the successive meetings that are to be held every two weeks," she told Al-Mashareq.

All the meeting participants were well-versed on economic issues, and agreed on the need to assess the difficult financial, monetary and economic situation Lebanon is facing, she added.

They "agree on the general economic outlines, but still need to agree on the executive actions", al-Hassan said.

"For example, everyone agrees on the need to improve tax collection and increase its contribution to the gross domestic product (GDP), but they still have to agree on the kind of tax policy to be followed," she said.

Proceeding with these meetings will lead to a "space of convergence between the political parties and ultimately agreement among the attendees, even if to a limited extent", she said.

These efforts will put forward solutions, facilitate the decision-making process and help the government in drafting the general budget, al-Hassan said.

Economic reform

The efforts made by the Economic and Social Council are essential as dialogue is necessary, particularly on economic affairs, said former minister and former president of the Lebanese Association of Industrialists Fadi Abboud.

"Lebanese political parties have ideas on economic reform, but they have no plans that detail the executive actions needed to implement this reform," he told Al-Mashareq.

"This is evidenced by the government’s hiring of the management consulting firm McKinsey & Co. to conduct a study to formulate an economic vision for Lebanon," he said.

"There is no disagreement about the general outlines, such as the necessity of transforming the economy from a rent economy to a production economy, combating corruption, financial reform and other priorities," Abboud said.

"It is necessary to move on to ironing out the details and getting all parties to agree on dissecting the problem and to agree on every step and stage towards a solution," he added.

Abboud stressed the need to strengthen Lebanon’s competitiveness through measures such as streamlining tax procedures, controlling waste and reducing bureaucracy.

"Strengthening competitiveness leads to stronger investment," he said.

Lebanon's public debt currently exceeds $80 billion, with the general budget for 2018 projecting a deficit of $4.8 billion.

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