A small budget for “Greater Lebanon”!
It is known in all scientific studies and reports, and even “self-evident principles,” that the coffers of states are “the pockets of their subjects.” Since GDP reflects the size of a country’s economy and per capita income, it reflects “the pockets of its subjects.”
In 2018, that is, before the financial and economic collapse in Lebanon, the state budget amounted to 17 billion dollars, and the size of the gross domestic product was estimated at about 55 billion dollars. Today, the caretaker government headed by Najib Mikati has begun implementing the current year’s budget amounting to $3 billion, while the gross domestic product is estimated at less than $20 billion. It is a “small” budget for the “large” state of Lebanon, which was founded in 1920, and the Lebanese are currently living in the 104th year since its founding.
Taking into account several violations committed by the government and the House of Representatives in approving a budget like this, it consists of a set of fees and taxes to secure revenues that cover current expenses, most of which are for salaries and wages of employees and administrative supplies, while investment expenses represent only 6.7 percent… and this is amid doubts. Regarding the inability of government institutions to collect, as a result of “tax evasion,” which the Ministry of Finance figures estimated at between $1.2 billion and $1.65 billion annually between the years 2010 and 2019, that is, an average of $1.425 billion annually.
It may have exceeded two billion dollars annually during the years 2022 and 2023. In the context of the increasing wave of objections, a parliamentary team filed an appeal against the budget law before the Constitutional Council, which decided to suspend the effectiveness of 4 main articles related to taxes and fees, including municipal fees, and an exceptional tax on beneficiaries of the support funds spent by the Bank of Lebanon, provided that the Council issues its decision. The final application shall be submitted within a maximum period of one month from the date of submitting the appeal.
The danger lies in the international community’s view of Lebanon as a country that has collapsed financially, economically, and socially, and is unable to develop a plan to advance and implement the reforms requested by the International Monetary Fund, which has paved the way for widespread chaos at all levels: security, judicial, administrative, financial, and commercial… and thus the arena has been cleared for illegal activities. The “black economy” grew at the expense of the legitimate economy, especially in light of the spread of “cash dollarization,” which now represents about 70 percent of the gross domestic product.
It is noteworthy that whoever reads the budget report prepared by the Ministry of Finance will notice that it includes goals such as: reducing useless expenditures, providing public services to citizens, ensuring the sustainability of the public sector, curbing tax evasion, combating smuggling, promoting tourism, stimulating the movement of exports, and returning the economy to… The map of real sustainable growth…while this budget does not touch Lebanon’s basic problems, lacks a social philosophy and economic vision, does not include any preliminary translation of a recovery plan, or any rescue plan, and does not note any important indicators of the structural reforms that were agreed upon with the IMF. International. Even the budget did not show any significant impact on confronting growing poverty, worsening unemployment, and immigration, which doubled to about 200,000 Lebanese last year.
Most dangerous of all is that the new budget law completely ignored the necessity of restructuring the public debt, which exceeds $95 billion, most of which is due to people’s deposits in commercial banks, which were deposited by the Central Bank, which in turn lent them to the state. The government is trying to say that they are losses that must be written off, even though the State Shura Council confirmed in an official decision that they are rights of depositors, and that they are a debt on the state treasury that must be paid to those who deserve it.
*A Lebanese writer specializing in economic issues
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