“National Bloc”: We Refuse the Economic Reforms Plan and Ask for a Scaled-down and Independent Government

In a statement, the Party added that the solution to this crisis starts with the formation of a government of independent experts (whose high number our country prides itself in) with widened prerogatives and with the following priorities:

• Regarding Lebanon’s public debt, the new government would work towards reducing the annual cash outflow through two main measures: 1. Lowering the cost of debt servicing for LBP denominated debt, by contracting a new loan from the Central Bank and Lebanese Banks, worth $3 billion and equivalent to half of the interest due in 2020, at 0% interest, over a 30 year  period; and 2. Rescheduling the outstanding principal of LBP denominated loans due in the next 3 years, over a period of 20-30 year, and with a grace period of 3 years. All while taking measures to prevent any future financial engineering mechanism by the BDL to compensate the banking sector for the opportunity cost.

• As for the electricity, the government would work towards reducing waste in the energy sector and improving citizens’ access to electricity. The government should establish new electricity plants aligned with the needs of the Lebanese market, in full transparency and through a process of public tender, by directly importing the fuel and gas and thereby eliminating intermediaries. In addition, a transparent and constructive dialogue should be started with owners of private generators aimed at reducing the financial burden on Electricité Du Liban (EDL) by involving them in a national action plan until the necessary production capacity is secured.

• With regards to the reform of public administration, the government shall make an assessment of the size of phantom jobs in the public sector and of those created prior to the parliamentary elections and develop a clear action plan. In addition, a reassessment of the human capital of the public sector should be done, followed by a matching of skills with postings for a part of the workforce on one side, and a termination and compensation of the rest of the workforce on the other side (through gradual and descending compensation as unemployment allowance or through a single payment).

In the same context, different pension and health coverage systems in the public sector should be standardized and streamlined.

Finally, one of the most important reforms in this regard is the shift towards a digital government.

• With respect to social justice, a radical restructuring of the tax policy should be implemented to unify the sources of income and it should be progressive affecting the rentier and financial sectors as well as real estate speculations. These tax reforms should have no impact on the middle and low-income classes, and should by no means weaken the population’s living standards.

Indirect taxes must also be reduced; noting that they currently account for 70% of the total of taxes, and are borne by the middle and lower classes.

The Party stressed the utmost importance on the adoption of the "AFAAL" law to eradicate extreme poverty and save about 250’000 citizens living on less than 8,600 Lebanese pounds a day proposed by the National Bloc.

• On the subject of parliamentary elections, the National Bloc considers that the newly-appointed government should establish an experts committee to propose a fair and representative parliamentary election law that would allow the Lebanese to emerge from the disenchanting sectarian power-sharing agreement as expressed in the demonstrations.

The Party confirmed the urgency for “confessional parties” to hold a round of dialogue to resolve essential disagreements such as the strategy of defense, our foreign relations, and the sectarian system.

The National Bloc questioned why Prime Minister Hariri's document is not inscribed in a larger strategy for reforms, while the government had already consulted dozens of specialists in Lebanon and abroad. The Party described the proposals presented as “populist”, and as a failed attempt at reducing the population’s indignation.

The Party addressed some examples of loopholes in the cabinet reforms decisions. The Party pointed out that the paper proposes a budget with a deficit worth $ 3.4 billion endured by the Central Bank and banks. This proposal does not inspire confidence given past experiences that compensated for the lack of profit on commercial banks, resulting from the state borrowing with low interests, through the application of financial engineering.

The Party indicated that activating the role of the administration of public tenders and appointing a board of directors for the “Electricité Du Liban (EDL)” and an “Energy Regulatory Authority” will not be effective as long as the confessional parties have significant influence on these institutions. The most relevant indicators of this influence are the recent judicial and administrative appointments.

As to the looted public money recovery law, the Party questioned the credibility of the process if the authority accused of such looting is the one to endorse and implement it.

Regarding the privatization of the private sector in the sectors of telecommunications, “Middle East Airlines” and the “Casino du Liban”, the Party pointed out that these sectors are the most profitable and questioned the need for such privatization.

The Party cautioned that none of the proposals addressed the three most urgent issues, notably the budget deficit, the electricity deficit, and the cost of public debt. The Party highlighted the notable absence of any mention of public administration reform “owned” by the confessional parties, noting that this is not surprising since it enhances clientelism.

In this context, the Party signaled that there is no plan to ease the burden of public debt, which is also not surprising, as high interests and public debt serve a group of political actors linked to banks.

The Party considered that all previous plans to reduce the electricity deficit remained a source of polarization between the confessional parties due to quarries over quotas and refusal to build control mechanisms.

The Party pointed out that the proposals do not advance any action to expand the social safety net, especially considering the current circumstances and the citizens’ needs for these services.

The Party reiterated its position that confessional parties consolidate their power through networks of clientelism and power-sharing quotas which in turn result in corruption and poverty. This is done precisely to keep citizens hostage of the system, and confessional parties have neither the intention nor the ability to dismantle it.