Crunch time for Lebanon's 2017 budget, controversial salary hike bill

Published March 13th, 2017 - 12:00 GMT
Lebanon has not ratified a state budget since 2005 due to political bickering between rivals, leading to uncontrolled extra-budgetary spending in the billions of dollars.  (Shutterstock)
Lebanon has not ratified a state budget since 2005 due to political bickering between rivals, leading to uncontrolled extra-budgetary spending in the billions of dollars. (Shutterstock)

This week promises to be crucial with regard to Lebanon's Cabinet’s endorsement of the 2017 draft budget and the launching of legislative Parliament sessions to debate and ratify a host of draft laws, including the public sector’s controversial salary hike bill that has been listed on the agenda. Meanwhile, Foreign Minister Gebran Bassil has said his Free Patriotic Movement would unveil a new initiative Monday aimed at breaking the monthslong deadlock over a new electoral law to replace the disputed 1960 majoritarian system, amid uncertainty on whether the FPM leader’s latest hybrid vote proposal would be accepted by all the parties.

“Hopefully, the Cabinet will wrap up its discussions on the draft budget tomorrow [Monday] and finally endorse the fiscal plan before sending it to Parliament,” Youth and Sports Minister Mohammad Fneish told The Daily Star Sunday.

Fneish, one of two Hezbollah ministers in the Cabinet, said deliberations over the past three weeks have focused on budget provisions and allocations for each ministry amid demands by some ministers for increased budgets.

Cabinet is set to meet under Prime Minister Saad Hariri at the Grand Serail at 4 p.m. Monday to wind up discussions on the 2017 draft budget and approve the country’s long-awaited fiscal plan for the first time in 12 years.

However, the Cabinet’s deliberations have not touched on the public sector’s salary scale bill that were examined and approved by joint parliamentary committees last Thursday. The bill has been referred to Parliament’s general assembly for final ratification. The committees’ discussions focused on the cost of the salary scale bill, revenues and proposed taxes to cover it.

Speaker Nabih Berri has called for a legislative session at 10:30 a.m. Wednesday to discuss and approve a raft of draft laws and proposals, including the salary scale motion.

The Parliament session on the salary scale bill comes amid escalating protests by lawmakers, labor unions, banks and private businesses against a string of taxes proposed by Finance Minister Ali Hasan Khalil to cover the cost of the bill, estimated at LL1.2 trillion ($800 million).

It also comes amid frustration expressed by some teachers’ unions over what they viewed as low salary increases proposed in the bill that fell short of their expectations.

Government secondary school teachers last Friday began an open-ended strike in all government schools to protest what they called a “disregard of teachers’ rights.”

Lebanon has not ratified a state budget since 2005 due to political bickering between rivals, leading to uncontrolled extra-budgetary spending in the billions of dollars. Parliament’s final ratification of the 2017 draft budget is seen as pivotal for controlling state finances and shoring up the battered economy, burdened by a more than $74 billion in public debt. Once the Cabinet has endorsed the draft budget and sent it to Parliament, it will shift its attention to the more sensitive and thorny issue of drafting a new electoral law amid sharp differences between rivals over which voting system to adopt for the parliamentary polls, slated for May 21.

Bassil stressed that a new vote law is the key to the launching of political reforms in Lebanon. He promised to unveil a new hybrid electoral law Monday. “One of the FPM’s top priorities is that there can be no political reforms without a new and modern electoral law. The FPM will launch a new initiative in this respect tomorrow [Monday],” Bassil said in a speech at the FPM’s second annual convention at Beirut’s BIEL complex Sunday.

Bassil rejected accusations by his political opponents that he was seeking to forge an electoral law to serve the FPM’s interests.

“There is no electoral law for the benefit of the FPM leader. There is no electoral alliance for the benefit of the FPM leader,” he said.

Bassil, who has been involved in behind-the-scene consultations with Khalil from the Amal Movement, and Nader Hariri, chief of the prime minister’s staff, did not disclose details of his new vote proposal.

However, MP Alain Aoun from the FPM said Bassil’s talks with Khalil and Nader Hariri have centered on a hybrid vote formula that combines provisions of the proportional and winner-take-all systems.

While the parties are open to Bassil’s new proposal, he warned that if only one faction – a clear allusion to MP Walid Jumblatt’s bloc – rejected it, this would derail agreement on a new vote law to govern the upcoming elections.

“We might feel that we are close to an understanding [on a vote law] after all other formulas have collapsed. Preliminary indications are not entirely positive because one group might not support the [proposed] law and subsequently, reaching an agreement on an [electoral] law would be scuttled,” Aoun said in an interview with MTV.

Bassil said last month that the FPM would suggest a new hybrid electoral law after his two previous proposals had been rejected by Jumblatt’s bloc and other groups.

Jumblatt’s bloc has spearheaded a fierce campaign against Bassil’s proposal, which calls for electing a part of parliamentary seats under a majoritarian system and another part under a proportional vote law.

In what appeared to be a response to Bassil’s to-be-announced vote proposal, Jumblatt, who has publicly rejected a proportional vote law, tweeted Sunday: “Clarity is the best thing. Yes to proportionality that has a minimum of partnership, and No to proportionality that sets the stage for divorce and isolation. Enough being witty. We are very patient.”

Fneish reiterated Hezbollah’s support for complete proportionality in any vote law with Lebanon declared as a single constituency or expanded districts. “We are open to any vote law that ensures just representation to all the parties,” he said.

Khalil, the finance minister, said the Amal Movement was keen to respond favorably to proposals aimed at endorsing a new electoral law.

“We are very late in endorsing this [electoral] law. We definitely reject a return to the 1960 law in the same degree we reject vacuum in Parliament,” Khalil told a ceremony honoring teachers in the southern town of Taibeh.

“We are very keen on responding favorably to all proposals made to endorse a new electoral law. An electoral law based on proportionality with Lebanon as a single electoral constituency is the best law.”

For his part, Maronite Patriarch Beshara Rai urged Parliament to “enact a new law for elections based on real parity and just and comprehensive representation in line with the president’s desire.”

Speaking in Sunday’s sermon at his seat in Bkirki, north of Beirut, Rai also called for the endorsement of “a state budget whose revenues are extracted from the treasury’s squandered and stolen money, rather than from the imposition of additional taxes and dues on the economically exhausted people.”

By Hussein Dakroub  


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