12/21/2014
How to get out of trouble
We have recently heard that some representatives of Lebanon's main political groups intend to meet in order to discuss the worsening economic and social conditions prevailing in Lebanon and the long political stalemate that has begun endangering the country's internal stability. Ahead of this expected "national dialogue", I believe it worthwhile considering what are the chances of success of this long awaited for initiative.
Citizens in Lebanon react
differently when faced with the fact that social, economic, and financial
problems in Lebanon are growing at an alarming rate. Some of these problems are
so large that they have even begun to threaten the country’s stability. So, how
do these citizens react when they listen to the news on TV or read their daily
newspaper about water and food pollution, spreading corruption, the phenomenal
increase in the cost of living, electricity shortages, traffic jams, security
incidents, and, to make it worse, the glaring ineffectiveness of the State
Authorities to deal with these issues?
I have listed below some specimen
reactions:
·
“Sense of revolt”: “the problem is
caused by the bad guys. So let’s get rid of them, first, and things will turn
out all right afterward”.
Notwithstanding
the fact that such an attitude is seldom possible or effective, one has seen
its consequences in Syria, Iraq or Libya, where the citizens bore arms against
their tyrants and their supporters and ended up destroying the entire country.
·
“Let’s change the
system”: Others would answer you: the problem resides with our
electoral confessional system. It allows for the same types of guys to accede
to power. Let’s change the system and the electoral law and everything will be
fine afterwards.
This simplified reasoning has, so far consistently proven
wrong. Three times we changed the Constitution in Lebanon to try and give more
power to one community at the expense of another. We have seen the results, so
far.
·
“Let’s ignore it”:
Others follow a simpler reasoning that goes like this: “well, we have managed
in this way for seventy years, so why worry? Things will get settled in the end.
Anyway, it’s none of my business.
Besides being not the least constructive, citizens
who think this way acknowledge, from the start, that they do not want to be
involved and prefer to stay prudently out of trouble and let others worry, even
though, deep inside, they realize that things are seriously wrong in the
“kingdom of Denmark”.
·
“It’s a foreign plot”:
There is a fourth category of people, maybe the worst one, who sincerely
believe that everything that goes wrong in our country is the result of a
foreign political conspiracy that we shall never be able to defeat.
Some would put the finger on a Saudi/US plot,
others to Iran or Israel, but all will give you the same advice: “Don’t worry
your pretty head. There is absolutely nothing that one can do about it. It is
way above our heads and the heads of our leaders”.
In all these cases, we notice
that most citizens refuse to face reality and decide to get out of the game
before it really starts. They do not want to fight the obstacles and prefer to
prudently stay out of trouble, though they may admit that, sooner or later,
trouble will meet with them or their family, or their descendants, in one way
or another.
In fact some of these citizens
are intelligent enough to perceive and realize that, unless we do something,
sooner or later, our country is heading toward a huge financial crisis. When
that happens, Lebanon is bound to meet the same fate, or worse, as Cyprus,
Greece, Spain, Portugal, or Venezuela, where the citizens, for a long time,
lived in dreamland, but were eventually forced to face the harsh realities of
life to avoid national bankruptcy. They had to accept to bear huge taxes and a
twenty or twenty five per cent unemployment rate to avoid national bankruptcy. This
is probably what will face us if not worse, unless every citizen in this
country “grows up” and realizes that, adopting an unconcerned attitude or
considering violent reactions would surely draw us all to doomsday.
At this stage, some readers would
ask me: “so what is the solution? Should we contemplate leaving the country and
emigrating, or is there anything that can be done to make life better in
Lebanon?
Before answering that question,
allow me to start with a riddle. What do a doctor, an engineer, an
architect, a lawyer, a mechanic, a scientist, and a teacher have in common?
The answer would be that, in
order to amend a wrong (solve a law case, repair a car, cure an illness) or
create something new (design a skyscraper, teach youth, build a road, or invent
a new product) they all proceed in the same manner. They all move from effect
(what currently exists and needs improvement) to what caused this
situation, in the first place.
It is my contention that, adopting
the same approach could serve us to resolve our national issues.
A.- Let us look at the EFFECTS first. What do
we see?
- The majority of citizens (maybe as much
as 95%) complain that they cannot keep up with the high cost of living and
the poor and unsanitary living conditions they have to put up with.
- The government is struggling, without
success, to find enough money to:
- Provide the citizens, at a reasonable
cost, the minimum facilities in education, health, social security, and social
services,
- Maintain and expand the
infrastructure: electricity, water, roads, transport, environment, oil
& gas.
- Support and enhance the
different sectors of the economy (agriculture, industry, tourism,
telecoms)
- Improve the relationship and
strengthen the bonds with our Diaspora,
Unfortunately,
none of these goals have been achieved and, instead, the burden of the public
Debt keeps growing at a menacing compound rate. So, in a nutshell, there is no
money in the citizens’ pockets, no money in the public coffers, and worse
still, the government owes, to date, some $75 billion dollars, maybe one of the
highest ratio of public debt to GDP in the world.
B.- OK, now let us look at the CAUSE.
What was the cause of this
situation and how can one improve upon it? Here, you will allow me to share
with you the results of ten years of hard study and researches, done, most of
the times, against the efforts of the Authorities to prevent me from pursuing
them. Though, I must admit, some public officials sincerely and honestly tried
to steer me in the right direction, most others did just the opposite and
persistently ignored my demands, my questions as well as my suggestions to
solve the “wrongs” and get to the “rights”. I do not really blame them. They
were simply following orders received from “high” above. But, let’s get down to
brass tacks. Why there is no money in the till, and WHY do we owe
$75 billion dollars?
To get the answers to these two
questions, one would have to go back to 1993, when the country’s Debt did not
exceed two billion US dollars, even after eighteen years of Civil War. The
researches that I have gone through have provided me with the following
answers:
·
Why do we owe $75 billion
dollars? The Debt of $75 billion is purely and exclusively the result of
compound interest accruing every year, and constantly remaining unpaid, to
accrue at a compound rate that was initially very high, then gradually subsided
to reach the present average of some 6.50% which has been roughly the same over
the past ten years.
·
Why there is no money in
the till? This is because the government is regularly dilapidating every year, at
least some four billion US dollars in the following areas:
1)
Two billion US dollars in
unnecessary energy costs: a)$1.5 billion of high fuel costs that could be saved
through gas operated turbines, and b) $0.5 of dilapidations of funds at EDL.
2)
$1.7 billion US dollars are
dilapidated through undervaluation of real estate properties for the purpose of
calculating the 6% RERF (Real Estate registration fees).
3)
$300 million US dollars of
sundry dilapidations of public funds that would be too long to enumerate.
So, my friends, how
can we resolve that lamentable situation and maintain a reasonable balance
between expenditure and revenue??
C.- The
Solution
Before electing a
new President and/or holding parliamentary elections, the current political
parties in Lebanon ought to start by agreeing upon the following program:
1.-
To solve the problem of the Debt and refund the bondholders, convince them to
agree to cut down the rate of interest by 2%, and reduce it from the current 6.5%
down to a more reasonable 4.5%. This reduction, provided it is granted, would
save our country’s Treasury $114 billions in 20 years. But it would also make
it possible for the bondholders to recuperate their money entirely within
twenty years.
2.-
To undertake the reform measures recommended in 1) to 3) above, get the leaders
of the political parties to agree to implement these reforms, and thus, allow
the Authorities to save up to $80 billions in 20 years.
Provided these
approaches are approved by the majority of the attendants, the National
Dialogue will be successful and the presidential and parliamentary elections
that will follow will provide a popular confirmation and support to that
program. It will also be a true manifestation of the will and the determination
of the Lebanese people to solve their problems by themselves, without foreign
intervention.
In my considered
opinion, contrary to the issues of Hezbollah’s arms, its involvement in Syria,
or its relationship with Iran, the issues of the Debt and the necessity
of imposing strict public budgetary controls, should not be a major
cause of dissent among the two main political blocs. I believe that, provided a
substantial majority of the delegates to the National Dialogue approves the
above two resolutions, holding the two elections will proceed satisfactorily
for the benefit of all the Lebanese citizens.
