Lebanese President Warns of Country’s ‘Bankruptcy’

Lebanese President Michel Aoun meets Maronite Patriarch Beshara al-Rahi at the presidential palace. (Dalati & Nohra)
Lebanese President Michel Aoun meets Maronite Patriarch Beshara al-Rahi at the presidential palace. (Dalati & Nohra)

President Michel Aoun warned on Friday that Lebanon was “bankrupt”, which therefore demands the need to “control finances and combat corruption.”

The president made his warning while receiving at the presidential palace Maronite Patriarch Beshara al-Rai.

“Those who will be elected to parliament should know they are not coming for a stroll, but they should assume the responsibility of a country that is in danger,” Rai said.

Lebanon will hold parliamentary elections on May 6.

Aoun and Rai held a closed-door meeting that tackled latest local developments, as well as the situation of the educational sector and its institutions.

The Patriarch called on the Lebanese to work together to provide the country with political, security, social and economic stability.

Aoun’s statements were the first direct warning of their kind on the economic situation in Lebanon.

He voiced his concern ahead of the Cedar 1 international donor conference that will be held in Paris on April 6.

The meeting is aimed at providing Lebanon with financial support to strengthen the implementation of crucial reforms through investment projects and soft loans.

Potential donor countries have urged the Lebanese government to introduce reforms and fight corruption to curb the deficit before aid is delivered in the form of long-term loans.

Last week, Lebanon’s cabinet ratified the 2018 budget and will now pass it to parliament for approval.

Economic expert Walid Abu Suleiman told Asharq Al-Awsat that the government already sent a positive message to the international community by sending the budget for parliament and announcing its decision to curb spending.

“However, there are still unavoidable expenses related to the deficit in the electricity sector and in paying salaries and wages,” he added.

Lebanon has one of the highest debt-to-GDP ratios in the world at about 150 percent.

Paris IV conference

Aoun could lead Lebanon’s delegation to Paris to take part in the Cedre conference set for April 6, in the French capital, al-Joumhouria daily reportedly on Saturday.

If Aoun decides otherwise, Prime Minister Saad Hariri will lead the mission to Paris.

Hariri had announced on Tuesday during the Business and Financial Forum, that Lebanon plans, at the Cedre conference, to propose a program for investment spending and to secure $6 billion for projects for the next five years.

According to David Butter,  Associate fellow in the Middle East and North Africa program at Chatham House, the Royal Institute of International Affairs,  keeping Lebanon solvent depends on maintaining the confidence of creditors. They are unlikely to be impressed by the government’s failure to get a grip on fiscal policy. Last year’s deal for higher state salaries in return for modest hikes in the value-added tax and some other taxes has been stymied by political squabbles, and the budget deficit is worsening .

Asharq Al-Awsat/YL