|15 July, 2019

Lebanon's parliament to begin debating draft budget this week

Prime Minister Saad Hariri postponed the session to defuse tensions between rival Druze parties and their allies

Parliament members give the newly-formed cabinet a vote of confidence in Beirut .

Parliament members give the newly-formed cabinet a vote of confidence in Beirut .

REUTERS/Sharif Karim

BEIRUT: Parliament is set to meet over three days this week to begin discussing and later approve the draft 2019 state budget amid opposition from some blocs that argue the proposed austerity measures fall short of the major structural reforms required to salvage the ailing economy. Another major obstacle facing Parliament’s final ratification of the draft budget is Speaker Nabih Berri’s declaration that the legislature cannot discuss and vote on the document before the Cabinet meets to approve the state’s closure of accounts for previous years.

The closure of accounts, which is a report of all the money coming into and leaving the Treasury, for 2004-17 was on the Cabinet’s agenda in a session scheduled earlier this month.

However, Prime Minister Saad Hariri postponed the session to defuse tensions between rival Druze parties and their allies, exacerbated by the deadly June 30 clashes between supporters of the Progressive Socialist Party and bodyguards of Minister of State for Refugee Affairs Saleh Gharib in the Aley town of Qabr Shmoun that killed two men escorting Gharib.

Gharib belongs to the Lebanese Democratic Party led by MP Talal Arslan, a Druze rival of PSP leader Walid Joumblatt.

Hariri said the postponement was meant to avert a split among ministers over the handling of the Qabr Shmoun incident, including a request by the LDP and its ally, the Free Patriotic Movement, to refer the case to the Judicial Council, the country’s highest judicial court that handles highly sensitive security cases. No session has been scheduled since.

“The convening of the Cabinet is under discussion. But for the Cabinet to meet this week, this largely depends on reaching a resolution to the aftermath of the Qabr Shmoun incident,” former Future Movement MP Ammar Houri, a political adviser to Hariri, told The Daily Star.

When told that Berri had declared that Parliament could not ratify the draft budget before the Cabinet met to pass a breakdown of previous years’ spending, Houri said: “Parliament last year approved the 2018 budget without an audit of previous years’ extra-budgetary spending.”

After meeting with President Michel Aoun Friday, Hariri said he expected a resolution to the aftermath of the Qabr Shmoun incident to be reached within days, a move that would put Cabinet sessions, stalled since the June 30 clashes, back on track.

Berri has called for legislative day and night sessions Tuesday through Thursday to discuss and endorse the draft budget, which contains a host of austerity measures, including public spending cuts and tax hikes with the aim of reducing Lebanon’s huge deficit, which last year stood at 11.1 percent of gross domestic product.

MP Ibrahim Kanaan, the chair of Parliament’s Finance and Budget Committee, submitted the final report on the draft budget to Berri Friday evening.

The committee, which had made amendments to the budget during daily sessions since June 10, approved the draft last Tuesday, reducing the deficit to 6.59 percent of GDP, down from 7.59 in the draft approved by the Cabinet and further slashing spending by over LL550 billion ($360 million).

However, Parliament’s general assembly needs to resolve a remaining dispute over two main points: a proposed 2 percent tax increase on imported goods and proposed cuts to the pensions of retired military personnel. National Veterans Organization head Maroun Khreish has called on retired military personnel to block the entrance to Parliament Tuesday to protest the proposed cuts to their end-of-service benefits.

In a televised speech Friday, Hezbollah leader Sayyed Hasan Nasrallah said the party’s 13-member bloc in Parliament strongly opposed the imposition of the 2 percent tax hike on imported goods, saying this tax would affect the poor and those with limited income.

“During the Parliament discussion of the draft budget, Hezbollah will oppose the 2 percent tax increase on imported goods,” Youth and Sports Minister Mohammad Fneish, one of three Hezbollah ministers, told The Daily Star Sunday.

Lebanese Forces MP George Adwan criticized the draft budget, saying the party’s 15 MPs would vote against it. “We need a radical solution to the budget’s provisions,” Adwan told Al-Jadeed TV.

He stressed that a radical solution to the problem began by putting an end to what he termed “protectorates” in telecommunications, electricity, tax evasion and Customs tariff evasion. “Every official must give up his protectorate. Otherwise, we will not be able to resolve the problem,” Adwan said.

However, there is consensus among the country’s major parliamentary blocs on the need to ratify the draft budget this week, a move that aims to send a strong signal to the international community about the government’s resolve to enact a string of key economic and financial reforms recommended at last year’s CEDRE conference to revitalize the stagnant economy.

“The way is clear for the budget to be approved in Parliament next Thursday, though some provisions might need to be voted on,” MP Alain Aoun from the FPM’s parliamentary Strong Lebanon bloc told MTV Sunday night.

The reforms are deemed essential to unlock over $11 billion in grants and soft loans pledged by international donors at the CEDRE conference to bolster the ailing economy, which is suffering from a soaring national debt of $85 billion, equivalent to about 150 percent of GDP, slow growth and a high budget deficit.

FPM leader and Foreign Minister Gebran Bassil, whose tour of the Chouf district last month heightened tensions and led to the Aley clashes, visited a number of southern towns and villages near the border with Israel Sunday, meeting with FPM supporters. Addressing FPM supporters in the Christian town of Ain Ibl, Bassil said: “It is forbidden for the FPM to even think of the presidency. This issue is out of the discussion. Anyone who loves me and loves the FPM must not talk about this topic.”

Bassil has been accused of making his tours of several provinces in a bid to boost his presidential chances when Aoun’s six-year tenure ends in 2022.

Commenting on Parliament sessions to debate the draft budget, Bassil said: “It’s time for work. The country is going through difficult economic crises and Parliament is facing a challenge next week.”

Bassil spent Saturday night at the residence of General Security chief Abbas Ibrahim in the southern village of Kawthariyat al-Sayyad before he set off on his southern trip Sunday morning.

Meanwhile, former premiers Najib Mikati, Fouad Siniora and Tammam Salam met with Hariri Sunday night as part of their regular meetings with the prime minister to discuss domestic issues.

No statement was issued after the meeting, held at Hariri’s Downtown Beirut residence. Local outlets said the meeting came as the three former premiers have been invited to visit Saudi Arabia for talks with Saudi King Salman and Crown Prince Mohammad bin Salman on bilateral relations and regional developments. The three former premiers had met in the past to denounce attempts to infringe on the prime minister’s prerogatives.

At his residence Saturday night, Hariri had met with Joumblatt, discussing, among other things, the Qabr Shmoun incident and the draft budget.

Despite tensions between the PSP and the Future Movement in past weeks, Joumblatt described his relations with Hariri as “excellent.”

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