7/28/2014
Charbel, getting in touch is important, but it is not enough, because we do not know what to tell them when we do.Let me ask you a question. Suppose that tomorrow I get you 400 citizens to attend a meeting and they ask you to speak to them. What will you tell them? Will you be able to solve some of their problems? Because that is what they will want to hear from you. Every human being has problems he wants solved. If you can show how to solve them, you have won them forever. Unfortunately, on Facebook, most of the time people describe problems, seldom solutions. That is why people get bored in the end. They are looking for the solutions. The problems they are, unfortunately, too well aware of them. Tomorrow, Inch'Allah! I shall publish a blog on that subject and let you have the url if you wish to read it.
WHAT PEOPLE WANT IS TO LEARN ABOUT SOLUTIONS. THE PROBLEMS, THEY ARE UNFORTUNATELY TOO WELL AWARE OF THEM
The Role of the President of the
Republic in supporting the introduction of some essential reforms in our
country’s system of governance and watching that they are implemented
A.- The present situation
The absence of
a President of the Republic in this country is negatively affecting its entire
governance system. The Prime Minister, who, according to the Taif accords,
holds theoretically a great deal of power cannot do much considering that, in
the absence of the President of the Republic, all major decisions must be taken
unanimously by the Council of Ministers. At the same time, due to constant
squabbling among the different parliamentary blocs, the Legislative Assembly is
unable or unwilling to fulfill properly its role as guardian of the Constitution,
national legislator, and protector of the rights of the electorate. Added to
these serious current shortcomings, one must not forget the near total absence
of a clearly defined and constructive national development policy. At the same
time, one must unfortunately admit that such an absence was not an uncommon feature
of most preceding administrations in our country, particularly during the last
two decades. In the meantime, the economy of the country is going to pieces,
and the Public Debt is growing at the current pace of fifteen million US dollars
a day.
B.- Some of the Problems
that we are facing
To substantiate
our above declarations we cite below a few of the numerous problems currently
faced by the present Administration.
1.- The
Energy problem. - During the past
twenty years no less than five national Energy plans were elaborated at great
effort and cost, only to end up, without implementation, in the government’s
archives. The last plan elaborated in 2009 was no exception, with only two out
of the 25 initiatives included in it, seeing the premises of an execution.
2.- The
problem of the oil and gas development.- For the past three years a great
deal of thinking has been brought on this subject and a greater number of
studies have been undertaken, though no concrete realizations have occurred in
this domain to date, and no explanations were provided to the citizens for this
absence of results.
3.- The
problem of the salary scale.- During the past three month the Lebanese
government has been faced with numerous strikes and protests against its
passive attitude toward the salary scale impasse, a problem that has been left
unsolved for more than ten years. So far no solution has been found to this
issue and more strikes and protests are forthcoming.
4.- The
problem of the shortage of funds at the
Treasury.- After years of uncontrolled spending and a poor management of
the country’s resources, the coffers of the State are empty and the prospects
of additional borrowing are getting slimmer by the day. At the same time, the
size of the Public Debt, through the relentless accumulation of interest, is
mercilessly growing at the current rate of fifteen million dollars every 24
hours. That rate is expected to increase in the future due to the compound nature
of the interest charges. The Administration has constantly faced these problems
over the past twenty years, though to a lesser extent. No serious efforts were
deployed in the past to address them adequately.
C.- Some proposed solutions
We propose the following:
·
First: Call for the
urgent election of the President of the Republic and a clear definition of the
expectations of the citizens concerning the role that the holder of the highest
position in the country is expected to play with regard to the introduction
of some essential reforms in Lebanon.
·
Second: Propose the
creation of a “Council of Wise Men”, whose members will include the country’s
leading economists, to advise the President on all issues related to the
country’s economic, financial and fiscal policies, with particular attention to
the treatment and the management of the Public Debt. The Wise Men, once
appointed, should be prepared to shed stereotyped thinking and consider
recommending doing away with, or amending some of the policies that have led to
the systematic accumulation of the country’s huge public debt over the past
twenty years, with worse problems of this nature likely to threaten us in the
future.
·
Third: Call for the rapid elaboration and drafting of
a National Reform Program under the auspices and with the support of the
President of the Republic. That program will cover the period of six years to
coincide with the mandate of the new President.
The Nation urgently needs such a National
Program. The elected President should be called to oversee its elaboration,
approve the definition of its essential objectives, and encourage all the
actors involved in the process to complete it as early as possible.
·
Fourth: Proceed with the execution of the program and
its concomitant monitoring
The principle of
an effective monitoring of the execution of the program must be strongly
supported by the President of the Republic if one wants the project to succeed.
This follow-up must be done at regular intervals and in participation with Civil
Society to ensure that the program is being executed adequately and
efficiently, that the promises it contains are kept, and that the overall
system is functioning properly. During all this period the President of the Republic,
assisted and advised by the Council of Wise Men, and in close association with
the government, will act as the senior coach and arbitrator, in strict
accordance with the terms of the Constitution.
Beyrouth,
le 7/26/2014
Let us put a stop to this collective suicide in Lebanon
Other than the security
disorders that menace Lebanon, on the internal as well as on the external
front, our country finds itself confronted nowadays with a serious and major
challenge, the irresistible and uncontrolled rise of our National Debt.
The problem is so serious that I
would go as far as saying that the very future of our country hangs in the
balance. I leave it to the reader to decide, after perusing this report,
whether my fears are justified or not. I particularly address this message to
the wise and learned economists I have cited above hoping that they will
consent to be both witnesses and judges to my statements.
Some who will read these lines
would be inclined to ask me: if the danger is so great, how come so few people
have not denounced it earlier? Allow me to point out that every one of these
learned experts has, at one time or the other, over the past two decades,
brought the attention of the Authorities to the danger and the serious
consequences of the rise of the Public Debt. The fact that all the governments
who succeeded themselves during this entire period failed to address this most
serious issue, represents an unforgivable mistake that will mark them forever.
For further information I attach
to this report a number of tables and graphics that clearly illustrate the past
movements of the Public Debt during the previous two decades and similar
estimates of what would be forthcoming if no solid and meaningful reforms are
introduced rapidly enough, as compared to the beneficial advantages of
implementing these reforms resulting in the expected full redemption of the
public debt by 2032. The estimates that we have compiled are based on two
different scenarios.
Scenario A
Envisages a decision to maintain the “status quo”. This
assumes the absence of any substantial reforms within the Public Administration
and sticking to the same old policies. In this case, as the reader will notice
from the attached estimates, the public debt will keep growing, on a compound
basis, until it reaches in 2032 the astronomical sum of US$184 billions,
equivalent to 400% of the estimated GDP for that year ($45 billion). It should
be pointed out that the debt will reach that summit, even if we consider that
the Authorities will devote all the expected revenue from the oil & gas
exploitation during the second decade that are estimated to amount to $100
billion dollars to partially repay the Debt. Without such a sacrifice, or in
the case the country is unable to develop adequately and fast enough its oil
and gas resources, the public debt is expected to exceed three hundred billion
dollars by the end of 2032.
Scenario B
On the other hand, is
based upon the early introduction and implementation of two essential types of
reforms:
The first reform should concern the service of the debt, and
particularly the holders of the debenture bond instruments of that debt.
Discussions must take place, at the earliest possible opportunity between the
Authorities and the bond holders, sixty seven per cent of whom are Lebanese
nationals. The discussions must be centered upon a request by the Authorities
to reduce the applied rate of interest by an average of two per cent. If this
proposal is agreed upon by all the bondholders the Authorities will save the
sum of $114 billion dollars over the next two decades.
The second reform will involve a set of initiatives described
in an annex of the report that are intended to increase State’s revenue and
eliminate waste and corruption to the extent of $72 billion dollars over the
next two decades.
It should be emphasized that the two types of reforms
contemplated in Scenario B must be undertaken simultaneously. In the
event either of the reforms is not implemented the entire endeavor will be
fruitless.
Conclusions
In conclusion, it appears from this study that the Lebanese
Authorities should adopt, as soon as possible, in the light of our studies and
reports, a number of critical decisions that will impact positively on the
future social and economic conditions in this country.
Taking the wrong
decision or letting things run as before will bankrupt the institutions, will
risk endangering the peaceful coexistence between the communities, and cause
serious disorders in a country that is already under heavy social and divisive
pressures.
On the other hand, if the right decisions are taken, and the
reforms are introduced and implemented early enough, the country’s economy will
be stabilized and will become more socially just and equitable.
The sacrifices that the bondholders of the Debt and the real
estate owners are required to make will serve to redeem the entire public debt
by 2032 and lead to a better quality of life for all.
I am sure that some will be tempted to argue that now is not
the proper time for such considerations, in view of the internal political
crises that the country is going through, the terrifying events in the region,
and the fear of a spillover in Lebanon.
To those I would answer by proposing an allegory. Imagine a
person who already suffers from flue and lives in a country that is threatened
by a cholera epidemic. If that person goes to the doctor to enquire what he should do about the
cholera epidemic, what would be the recommendations of the doctor. There is no
doubt in my mind that the doctor would recommend treating the flue symptoms
first in order to render the body of his patient more immune to some eventual
cholera infection. Similarly would it not be more prudent to address our local
problems and strengthen our internal cohesion if we want to be in a better
condition to face the external dangers?
Allow me to conclude by a question to the readers. We are all
seeking in Lebanon a strong president to lead us in these difficult times. Do
we measure his strength the thickness of his muscles or the length of his
kalachnikov? I believe that, under the current circumstances, the real strength
of the President will issue from his capacity to convince all the political
parties that his vision and his reasoning are right. The problem of managing
the public debt is of paramount importance. A strong President should be
elected to convince all the Lebanese of the importance of dealing effectively
with this major problem through the reforms that were listed above.
