Lebanon News

Rumors of financial collapse incorrect: MP

Kanaan and Khalil attend a committee meeting at the Parliament in Beirut, Monday, Oct. 1, 2018. (The Daily Star/Lebanese Parliament, HO)

BEIRUT: The chair of Parliament’s Finance and Budget Committee said Monday that the fiscal situation in Lebanon is stable and that rumors about a financial collapse are incorrect. Metn MP Ibrahim Kanaan’s remarks came in a televised news conference following a committee meeting with caretaker Finance Minister Ali Hasan Khalil. The committee convened to look at plans for addressing Lebanon’s current economic situation.

“We were briefed by the finance minister that customer deposits, deposits in foreign currencies and Banque du Liban gold assets are all positive,” Kanaan said.

During his speech, Kanaan discussed the CEDRE conference, held in Paris in April, saying that when he and the committee had spoken with the finance minister, the latter said donors had not set deadlines for the loans and projects to which they had pledged.

At the Paris conference, Lebanon secured commitments for more than $11 billion in loans and grants to support infrastructure projects and boost the local economy.

The money, however, can be unlocked only after economic reforms are implemented. Those reforms hinge on the formation of Cabinet, a process now in its fifth month of deadlock as a result of disputes between political parties over ministerial shares and portfolios.

“We cannot continue without a government and a true implementation of reforms,” Kanaan said.

Lebanon has the third-highest debt rate in the world when compared with gross domestic product; currently standing at some $81 billion, the debt is about 152 percent of GDP.

Kanaan also denied reports that have circulated in recent weeks about excessive employment in state institutions. He said the widely reported number of 5,000 was exaggerated and that the committee had requested a detailed report from the Central Inspection Bureau and the Civil Service Council regarding hiring within state institutions in 2018.

“This is inaccurate, according to the Finance Ministry records,” Kanaan said.

He later clarified that institutions might hire employees by the hour if needed and if the institution’s budget allows.

“But this is not considered a full-time employment,” he added.

According to Kanaan, the number of hourly employees hired by state institutions had not exceeded 300.

The report to be submitted to the committee, Kanaan said, will also be published by local media.

The committee also discussed ministries that exceed their budget allocations. Kanaan requested that the finance minister provide the committee with any spending that exceeds the allocated budget.

Kanaan also explained that there are spending excesses that were not approved by the Finance Ministry.

These will be discussed in a future meeting with the committee.

“We will ask the ministries about any budget overspending and, according to the law, the minister personally bears any excess spending by his ministry,” Kanaan said.

Kanaan also called for a solution to the electricity crisis. “The deficiency in the electricity sector has risen to [LL3 trillion, or $2 billion] because of the rise of fuel prices from $30 to $70,” Kanaan said.

The Finance and Budget Committee will meet with the finance and energy ministers at a later date to discuss possible solutions for the crisis, Kanaan told the news conference.

A version of this article appeared in the print edition of The Daily Star on October 02, 2018, on page 2.




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