Lebanon's GSM market: Privatization off course
1. Lebanon’s privatization predicament
Lebanon’s privatization predicament
It seemed like a breath of fresh air when the Lebanese government announced last year it was going ahead with its privatization scheme for the telecommunications sector. A draft law was prepared by the Minister of Posts and Telecommunications, proposing a complete reorganization of the telecom sector. These moves were bolstered by Prime Minister Salim al-Hoss’ decision to create a high council that would be charged with the realization of privatization.
The concept of privatization is not new to the Lebanese political and economic establishment, and indeed has been a fixture ever since the inauguration of former Prime Minister Rafik Hariri’s first government. However, a decisive privatization program was never pushed forward because of its highly controversial nature.
With deep divisions over the merits of privatization in Lebanon, public debate has been heated. Persistent financial deficits and consequently a huge public debt has brought the Lebanese Government to consider privatization to be one way out of this financial turmoil-- albeit inadequate by itself. Parliament and the public, on the other hand strongly oppose privatization plans, claiming they are merely government attempts to avoid fiscal responsibility.
The privatization predicament stands at the heart of a high pitch dispute between the Lebanese government and the country’s two mobile phone operators. They have been at odds for some years now, and appear a long way from resolving their differences.