The Lebanese parliament Elections are on the road and will be executed on the 6th of May 2018 which is a positive indicator for the Democracy in Lebanon. It is normal for all candidates to use all available weapons that can help them to succeed in their campaigns and collect the highest number of members in the future parliament but what is surprising us as observers that they are using the weapons that are the prove for their condemnation which are corruption and the bad economic situation.
I wrote this article from an economical point of view not political but it is well-known that Public Management is directly related to Economics and cannot be separated. I am quite surprised when all of them are talking about Lebanon bankruptcy before the elections including people who were contributors to the political decision during the past 13 years after the Syrian Troops withdrawal from Lebanon and lot of them were also part of the political regime during the 15 Years of their official occupation of Lebanon where all the political decisions were taken from Damascus directly.
The truth that Lebanon was put on the road for bankruptcy since the end of the Civil war in 1990 and this process was tailored long time ago that is why it is not a surprise that the Lebanese economy is shrinking. The process started when the Syrian regime sunk the Lebanese markets with their goods and labor force, the refugee’s problem today is not bad as it was promoted, because we used to have more than 500,000 Syrian workers in Lebanon since 1990 and the remaining are the new refugees who put pressure on the Lebanese economy and infrastructure and lead to big losses to the economy.
We have a deficit in the Trade Balance in Lebanon long time ago before the debt severe increase especially in the last 13 years but it was under control. The truth that all the debt accumulation was due to interest and inability to decrease the deficit in the public budget to start repaying the debt but what the Politicians did earlier are funding the annual deficit in the budget from new loans and rescheduling the old loans to pay it later. Our expenses are higher than the government income.
The main causes of waste in public resources are many and can be but not limited to the following:
- The majority of the militias’ members who were involved in the Lebanese Civil War were integrated in the public departments such as Electricity, Ministry of Finance, National Social Security Funds, Army, Port of Beirut, and Airport ….. And the majorities of those people are not well-educated and cannot fulfill the job requirements and some of them are getting paid without work. The government payroll schedule is very long and heavy and can destroy any economy. The Lebanese economy cannot afford to solve politicians’ problems and fund their Elections campaigns. The majority of the demonstration and strikes are done by those people who are still part time employees and now they are asking the government to make them full time employees. The problem is that the majority of them are not qualified for the job they are doing and they are refusing to go through exams in order to choose the qualified staff.
- The funds that we got from all the International Conferences that were held to help the Lebanese economy were evaporated in non-productive projects and went without increasing the growth in the economy by any means so it is better not to take it from the beginning because those loans lead to the problem that we are facing now.
- Fake projects which were done in the past 28 years where 90% of funds allocated to those projects were stolen by the contractors who are supported by politicians and special Departments in the Government. It is very easy to look at all tunnels and bridges all over the Lebanese Territories and you can see that the majority of those tunnels and bridges ends up with a bottle neck i.e., they moved the traffic jam few meters only instead of solving the problem.
- All the Funds that we got in the past should have been allocated exclusively for investment in infrastructure such as Internet, Dams, Railways, airports. Electricity is destroying the country and till now and after 40 billion Dollars of corruption we still paying two electricity bills. Internet in Lebanon is the slowest in the region, Mobile Bills are the highest also in the region. We are losing big multinational companies due to slow internet and telecommunication industry. Lebanese immigrants and who are working abroad succeeded in all industries and all sectors in the countries they are working at but still we are failing to build our mother country.
- They are saying that the Lebanese Banking sector is strong and this true because the Lebanese government is their major client and they are paying very high interest for the lent amounts and the new surprise that bankers this time are candidates for these elections which is simply conflict of interest and should not be allowed.
- The Central Bank Governor stopped suddenly all housing supported loans due to lack of budget for supporting such activities. The truth that this program was suspicious because employees of any level cannot benefit from such loans. The ceiling of those loans is more than $500,000 which means that the down payment should be at least $125,000 and the monthly installment should not exceed one-third of the employee income which is not applicable for 95% of employees in the Lebanese market and even in the Gulf region. Lebanese Bank are doing arbitrage from those loans in addition to all Treasury Bills that they are supporting through lending the Lebanese Government at high rates while paying the depositors lower rates and getting a guaranteed profit margin from these activities.
Taking such decision is very harmful for the economy and the real estate sector because the majority of the Real state contractors are selling small to mid-size flats which depends a lot on Central Bank supported loans and Iskan loan for financing such activities. This action may lead to increase the supply and decrease in demand for such flats which will lead for sure to a decrease in prices. If the collapse happens in this sector, the banking sector will face a major problem regarding the high value mortgages because the flat value will diminish and the market value will be lower than the mortgage value so they will prefer to stop paying their loans and buy new flat with half its price. Such scenario will be disastrous for the Lebanese Economy and the banking sector because the Commercial Banks will ask the Central Bank for the support and the Central Bank cannot afford large number of default clients and big losses in the value of the mortgages and this will lead to Dubai and USA Real Estate crisis.
- Governments all over the world transformed to E-Governments and changed the whole process to digital one due to its huge benefits to the economy which can be summarized as follows:
- Solve the corruption in the Public Sector
- Decrease Fuel consumption
- Decrease Traffic Jams
- Decrease Parking Expenses
- Decrease the time needed to complete the transactions without the need to spend valuable time waiting in long queues and the public employees with very bad attitude although we are paying their salaries from the taxes deducted from our salaries.
- Decrease human error due to personal assessment either intentional or not.
- Increase transparency in the Public Sector
- Possibility for tracking transactions online without the need to use phone calls without feedback and doing several visits without getting your transaction done.
The Lebanese economy cannot survive under this pressure and may collapse suddenly without any notice and we may get to sleep one day and wake up the next day with a severe depreciation in the Lebanese Currency against the Dollar and the Greece scenario is not far away from Lebanon. Electricity and Telecommunication problems should be solved, corruption and Taxes evasion shall stop otherwise our economy will collapse all of sudden and nothing will save us unless they take our oil as a collateral for our debt and then outsiders will put our Monetary and economic policies.