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Younger Lebanese mobilize on economy

Feb 07

Younger Lebanese mobilize on economy

BEIRUT: With a government now formed, the time is nigh for the implementation of much-awaited reforms that politicians have been foreshadowing since the CEDRE conference last year, when over $11 billion was pledged to Lebanon.

Prime Minister Saad Hariri has said that the structural and economic reforms required to unlock the funding could be “painful,” but many people in Lebanon, especially the younger generation, are wondering just who will be hurt - and to what degree.

Some believe that a redress of Lebanon’s bloated public debt and crippled finances will be harshest on the poor and the middle class, via austerity measures. In addition to a series of recent demonstrations against measures some anticipate the new government may try to enact - such as an increase in the value-added tax and the price of gasoline - they have sought to answer a fundamental question: How should this mess be solved?

That was the theme of a conference last week with well-known local economic journalist Mohammad Zbib, titled “What to Do? With Regards to the Economy.”

More than 100 people attended the event, which was put on by the activist Mada youth network. Members of the network have organized and participated in several demonstrations in the past couple of months in Beirut, calling for economic and social justice as fears of an economic collapse and financial crisis grew.

In a series of conferences about the political system and social issues, Mada is trying to distil economic and financial policies for Lebanese people who might feel estranged from or disaffected by the system.

“We are trying to deal with issues that are currently very important, and reflect the crisis of the system in Lebanon,” Hashem Adnan, a theater director and political activist, who organized the event with Zbib, told The Daily Star.

“I know the economy is doing badly, but [Zbib] explained things in a simple way that allows you to understand the details of exactly why that is,” Malek, a university student, told The Daily Star after the two-hour event.

“The great thing is that this is part of a series that will include politics and society, which will allow a large number of people to formulate a vision much bigger than what we have today.”

Why has the Lebanese pound remained pegged to the U.S. dollar since the 1990s? Why does the state employ a model of taxation that weighs heavily on the poor and the middle-income strata of the population? Why doesn’t Lebanon restructure its public debt - and, most importantly, what is the alternative?

For these and other questions Wednesday, Zbib had answers.

To continue spending money, Zbib told the audience, the Lebanese state has to either take on further debt or increase taxes. The consensus was that Lebanon, which has the third-highest debt-to-GDP ratio in the world and where debt servicing eats up close to half the yearly budget, should be trying to lower its debt. That leaves taxation.

“The whole battle today is: Who is going to pay that price?” Zbib said.

For him, the answer is quite clear: Shift the tax burden from low-income consumers to those who have benefited from the Lebanese economic model for decades -- the banks and real-estate developers, as well as the wealthy who have accrued fortunes.

But Adnan says the new Cabinet, including a real estate developer, three ministers with close ties to banks and the former representative of the Chambers of Commerce, was geared toward preserving those exact interests.

Minister of State for Information Technology Adel Afiouni, a former longtime investment banker, told The Daily Star he did not want to pre-empt Cabinet’s policy statement, and therefore would not comment on the types of measures that could be implemented.

“It’s very important from my perspective for all of us to be aligned behind this policy statement,” Afiouni said.

But in the face of what Adnan termed “regressive” policies, he said Mada and a host of other groups were working to forge a coherent alternative drawn from an alliance of leftists, feminists and youth groups.

By tying together various progressive circles involved in different fights, the hope is to create a movement that can tackle issues faced by a wide sphere of Lebanese people.

“We aim to radicalize the discussion a bit. ... We are against those with oppressive policies but we are also critiquing Lebanon’s mainstream independent opposition, which only talks about corruption. [Hezbollah leader Sayyed Hasan] Nasrallah now uses the anti-corruption slogan, all the politicians use it - it’s a word with no meaning,” he said.

“What is corruption? It’s not just [the squandering] of public funds. Corruption is the essence of our economic system, of the sectarian system, of how war criminals still rule our state. It includes tax evasion and patriarchy,” he said.

With a Cabinet now formed, Adnan said the leftist opposition would have to make difficult choices, balancing street action with carefully studied long-term thinking.

“This is the dilemma we always face as leftist groups in Lebanon. We need to work strategically and put more time on institutional kind of work, but at the same time we need to be in the streets.”

“I think we need to pick the right moment, so we don’t only go down to the streets, but also head to the right place.”