The Lebanese government has affirmed its commitment to implementing an economic reform programme based on the four pillars of the government's vision that were presented at the Cedre conference in Paris last April.
The policy statement sets out a programme of financial, investment and sectoral legislation and reform measures that the government will undertake, based on recommendations made by the McKinsey consultant company.
Prime Minister Saad al-Hariri delivered the policy statement on February 12th, saying it will accelerate the implementation of projects for which an estimated $3.3 billion in funding was secured before the Cedre conference.
The government also will implement the investment expenditure programme presented at the conference, which aims to increase investment in infrastructure.
The programme’s total value is estimated at $17 billion, to be invested over eight years, after the government approves the projects and requirements.
Of this amount, $5 billion will be financed by local and foreign private sectors "within the framework of the partnership mechanism between the public and private sectors", the government statement said.
'Consistent fiscal and monetary policy'
With regard to financial stability, the statement said, the government will pursue "a consistent fiscal and monetary policy that fosters confidence in the national economy and reduces the public debt-to-gross domestic product (GDP) ratio".
This aims to increase the size of the economy and reduce the budget deficit.
The government also stressed its commitment to undertake, starting this year, an annual financial adjustment of at least 1% of GDP over the next five years by increasing revenues and reducing spending.
This is slated to begin with reducing the annual deficit of Electricité du Liban (EDL) until it is totally abolished.
The government also will seek to expand the taxpayer base, activate tax collection, fight waste, put an end to customs and tax evasion and update laws and the methods used in tax administration, the statement said.
Commenting on the statement, economists who spoke to Al-Mashareq stressed the importance of implementation, saying it represents the toughest challenge to the government and the success of its efforts.
Implementing the government's plan
"The policy statement is a plan of action, and the plan must address the time period within which the government must achieve the stated goals," former Lebanese MP Fadi Abboud told Al-Mashareq.
"If we want to implement the requirements of the Cedre conference, we have to update legislation pertaining to administrative procedures in order to attract investment and investors," he said.
The policy statement addressed the required reforms in broad outline, when Lebanon needs to discuss the reforms' minute details that affect the economy and operational procedures for all transactions, he said.
This includes transactions in the real estate, industrial and agricultural sectors, he noted, as well as various types of administrative transactions.
The policy statement covers the requirements demanded of Lebanon at the Cedre conference and the economic reforms demanded by the World Bank, said former economy minister Raed Khoury.
"But it all boils down to implementation, and this is the major challenge," he said.
Electricity crisis is the first test
The points addressed by the policy statement were good, said al-Joumhouriya economic editor Tony Farah, who took part in the Cedre conference.
The conference stressed "reforms and fiscal deficit reduction, and left it to the Lebanese government to decide how to go about getting them done", he told Al-Mashareq.
"The international community stresses the importance of addressing the electricity issue which is draining the Lebanese treasury, as it will be the first and most important test of the Lebanese government's commitment to reforms," he said.
The economic situation is difficult, he added, but if the government is able to abide by the policy statement and maintain its commitment to it for several years, that would put Lebanon on the right track to stop the economic collapse.