The FPM Demagoguery.

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By Ghassan Karam

No one doubts that Gibran Basil is not another political figure who lost his parliamentary seat in the last elections in Lebanon. He is much more than that, he is the son in law of General Michel Aoun,  the head of the FPM political party in Lebanon and thus is entitled to a cabinet ministry in every Lebanese government.  Most assume that the present standoff where the Prime Minister designate, Mr. Mikati, has not been able to form a cabinet, is primarily due to the obstructionist policies followed by Michel Aoun  is demanding  that Mr. Basil, his protégé , be given the Interior Ministry. (It is ironic that such nepotism is being advocated by the party who claims the mantel of reform, go figure).

As bad as the above might sound, the recent positions of the FPM, as articulated through its favourite politician, is nothing short of pure demagoguery. It does not take a genius to figure out that when a government, an institution or even a household that is already facing a structural deficit will be committing suicide by decreasing the level of income when the expenditures are essentially contractual agreements that cannot be reduced. But that is exactly what the FPM has been suggesting openly and I might add with the implicit support of its allies who have stood by as this destructive charade is allowed to continue.

Lebanon consumes every year about 500 liters of gasoline per capita. These 2 Billion liters of gasoline have been subject to a tax LL9530 per 20 liters. The revenue derived by the Lebanese authorities from this tax amounted to over $650 million during 2010. The government used these funds, in combination with its other revenues, to finance the national debt and provide the meager level of services that its equally meager resources allow it to provide. Note that the Lebanese government is not in a position to adopt an austerity budget since things cannot possibly become more austere than they currently are. So what does the think tank of the FPM come up with to ease the pain and the burden of the Lebanese citizen? Why not cut the revenue of the government from the oil tax by half? Yes you heard it right. All sorts of political pressures were used to force the tax to be cut from LL9530 to LL4530. That effectively took away from the already strapped Lebanese government over $300 million each year. But that was not enough, the FPM is at it again. Mr. Basil, with the blessings of the FPM and all its allies wants to eliminate this government revenue totally. They wish to eliminate the remaining $300-320 million of annual revenue. So what is wrong in taking the side of the poor consumer you ask? Well everything in this case.

Any individual with an IQ above 70 would tell you that when the government is in such a tight fiscal position then no tax relief is acceptable unless it is paid for. This simply means that a decrease of the sum of revenue from one source needs to be compensated for by an equal increase from another source otherwise bankruptcy and financial collapse will become inevitable. The $650 million lost to the Lebanese treasury, if not compensated for would increase the level of national indebtedness. Ironically the debt will increase by more than the tax cut since the new debt carries a rate of interest . In addition  had the $650 million tax cut not been exercised, it would have decreased the level of debt and the interest rate required to finance it.

In a world best characterized by peak oil, a region in political turmoil, a global economy struggling to find its footing and above all the threat of climate change hanging in the balance it is wrong, immoral and irresponsible to encourage the consumption of fossil fuels.

The current proposal for tax relief suffers of two major shortcomings: (1) It is ecologically irresponsible and (2) it is economically misinformed. A far better strategy would be to reinstate the first LL 5000 tax per 20 liters that has already been implemented by offering an equal tax cut targeted to benefit the poor and the needier.  This policy must not be allowed to pass.

Note: The suggestion by Mr. Basil to transition to natural gas is not without merit except for the fact, and he would be the first to admit it, that such a plan is for the long run not the short or even the intermediate since it places major needs on the infrastructure).

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35 responses to “The FPM Demagoguery.”

  1. Lebanon89 Avatar
    Lebanon89

    FPM may not have all the solutions, but according to wikileaks, they’re the only non-mercenary party. They are actually loyal to lebanon, and have a vision for their country. Other parties are after power and see Lebanese people as a stepping stone. It’s important to differentiate between Lebanon-oriented politicians and mercenaries who consider foreign regimes to be their mother ship (rallying under the poster of a Saudi king?!). That being said, technology is I think what will save us, and to serve its goal FPM could motivate local inventors, and leverage their ideas. We need to invent our way out of the crisis, and we have enough local talent in Lebanon to do that.

    1. Lebanon89,

      Wikileaks is a “decent” reference about many things that one is not familiar with but only as a starting point for ones research. So who is it the writes wikileaks? You and I and others like us . I could log on to Wikileaks and make changes in the FPM entry. It is obvious to me that that entry was written by an FPMer 🙂 But that is a different topic.

      My post is not concerned with whether their loyalty is to Lebanon or not. Its only point is that all the protestations of Minister Basil regarding the gasoline tax are either totally misinformed which would be tragic or are meant as a diversionary political maneuvre which would be even more tragic.

      1. libnan1 Avatar
        libnan1

        Ghassan,

        Gas tax SHOULD never be used to pay national debt. Gas tax should only be used for roads and pollution control. It should not be abolished but at the same it be allocated for its intended purpose. A person that lives in the south, north or east should not have to pay for a beach front hotel in downtown Beirut.

        The debt you refer too was accumulated by previous administrations to finance project mainly in downtown Beirut. These places should be taxed heavily in the form of property tax. I hope the Government kept records of where the money was spent and on that bases tax these locations appropriately.
        I know couple of regions in Lebanon that did not benefit from the massive spending, the Christian towns in the Shouf mountain (my home area) and the Keserwan region where we reside. Keserwan was not Hariri’s favorite place back in the nineties, back then Damascus was a better place for him to visit. It still does not have sewer system, the roads are horrible. At the same time and according to your article these people should still pay for the national debt through gas tax !!!!

        As a proud supporter of the Aounist movement, I believe that Aoun is trying very hard with some missteps to improve the corruption status in Lebanon. The best way to do so is by starving it from CASH, therefore a tax holiday might not be a bad idea.

    2. ghzayel Avatar
      ghzayel

      lebanon89,

      i would like to clarify few things you mentioned in your post concerning fpm or more precisely the aounist movement.

      when we talk about the fpm, we should differentiate between the narrow minded aounist movement elites represented by the few lucky new kids in town like bassil, the aoun family protégés and others, and the majority of the free patriotic movement followers at the base and at large, including the so called wise men of tayar like issam abou jamra for example and many others who were at some time among its initial founders and now eventhough they still consider themselves within the tayar, they question aoun’s dictatorial approach to politics, his 180 degree shifts and unnatural alliances with his sworn enemies as well as his inexplicable antagonism with his previous allies in the mainstream christian and sunni camps.

      a great number of tayar followers also question the contradictions post 2005 between aoun’s tayar ideals and principles he advocated while in the french exile and what he ended up after his return to lebanon begining with the obvious family nepotism, the machiavellic upper hand and mafia style approach to lebanese politics he unfortunately learned very well from his buddies in the 8th of march group.

      yes i agree with you that you could find in the tayar movement true lebanese followers that are working to promote lebanese ideals, nevertheless, the problem lies within the upper hierarchy.

      it is funny you mentioned wiki leaks, but i think you are referring to a cable dated around the year 2005 and if my memory serves me well, the general at that time was trying to extricate himself from the 14th of march camp and or was still in a neutral position before joining the prosyrian group.

      so, the political assessment of the us embassy official you are referring to at the time it was issued, and the one you are using to base your judgment upon, was made with the wrong assumption that aoun would remain in the 14th of march camp faithful to his rassemblement pour la republique ideals in france or become neutral as a worst case scenario.

      rallying under the poster of the saudi king i will give it to you was a 14th of march blunder. i will also give you another blunder they made and that was the background of the outdoor posters for the last 13th of march rally 2011.

      if you looked carefully at the crowds in the poster they were all dressed in white like muslim pilgrims in a religious ceremony and that was a blunder too and i hope it was not planned on purpose like that.

      but then again the general allying himself blindly and openly with the syrian and the iranian regimes without any consideration whatsoever for the countless lebanese who still dont have any closure for their sufferings inflicted by mr, aoun’s old enemies suddenly turned into friendly regimes, thanks to the persuasion power of money, was not that a blunder???

      and finally, mr. aoun showed equally no consideration whatsoever for the syrian and iranian people struggling for freedom and dignity while alienating himself with most of the western countries as well as attacking the united nations, its tribunal and its resolutions to please his buddy hezballah, was not that a blunder???

    3. libnan1 Avatar
      libnan1

      Affirmative.

    4. 316909 Avatar

      Just a couple of years ago Hizbolla officials including Sayid Nassrala would have a Iranian flag behind them and not the Lebanese flag. They openly say they are supported by Iran and Syria. also Aoun opened a tv station in lebanon and paid 50 million dollars to do that. Now a retired Army general gets paid about $5000 a month so where did that money come from? Iran and Syria. When a country gives you money to open a tv station it normally asks you do a few favors for them. Then he spent about 200 million dollars during the elections so either he did a hell of a job reinvesting that $5000 army salary he gets every month or the syrians and iran were so happy with his work that they gave him more money and asked for more favors…. NUMBERS DONT LIE.

  2.  Avatar
    Anonymous

    FPM may not have all the solutions, but according to wikileaks, they’re the only non-mercenary party. They are actually loyal to lebanon, and have a vision for their country. Other parties are after power and see Lebanese people as a stepping stone. It’s important to differentiate between Lebanon-oriented politicians and mercenaries who consider foreign regimes to be their mother ship (rallying under the poster of a Saudi king?!). That being said, technology is I think what will save us, and to serve its goal FPM could motivate local inventors, and leverage their ideas. We need to invent our way out of the crisis, and we have enough local talent in Lebanon to do that.

    1. Lebanon89,

      Wikileaks is a “decent” reference about many things that one is not familiar with but only as a starting point for ones research. So who is it the writes wikileaks? You and I and others like us . I could log on to Wikileaks and make changes in the FPM entry. It is obvious to me that that entry was written by an FPMer 🙂 But that is a different topic.

      My post is not concerned with whether their loyalty is to Lebanon or not. Its only point is that all the protestations of Minister Basil regarding the gasoline tax are either totally misinformed which would be tragic or are meant as a diversionary political maneuvre which would be even more tragic.

      1.  Avatar
        Anonymous

        Ghassan,

        Gas tax SHOULD never be used to pay national debt. Gas tax should only be used for roads and pollution control. It should not be abolished but at the same it be allocated for its intended purpose. A person that lives in the south, north or east should not have to pay for a beach front hotel in downtown Beirut.

        The debt you refer too was accumulated by previous administrations to finance project mainly in downtown Beirut. These places should be taxed heavily in the form of property tax. I hope the Government kept records of where the money was spent and on that bases tax these locations appropriately.
        I know couple of regions in Lebanon that did not benefit from the massive spending, the Christian towns in the Shouf mountain (my home area) and the Keserwan region where we reside. Keserwan was not Hariri’s favorite place back in the nineties, back then Damascus was a better place for him to visit. It still does not have sewer system, the roads are horrible. At the same time and according to your article these people should still pay for the national debt through gas tax !!!!

        As a proud supporter of the Aounist movement, I believe that Aoun is trying very hard with some missteps to improve the corruption status in Lebanon. The best way to do so is by starving it from CASH, therefore a tax holiday might not be a bad idea.

        1. Liban1,

          The idea that users pay is an old established principle of taxation but it is not applicable in this case. The Gasoline tax should even be higher than what itis currently on environmental basis but we all know that this is not the reason behind it in Lebanon. Lebanon lacks a tax system that is capable of generating the income required to run the government and that includes servicing the national debt irrespective of when it was incurred and whether it was used efficiently or not. This income flows into the general funds that are then allocated according to the policy adopted by the cabinet and approved by the Chamber of Deputies. Cut of a portion of this inflow without a decrease in the outflow and the government would then have no choice but to either increase revenue in some other areas or to declare bankruptcy.

        2. Liban1,

          The idea that users pay is an old established principle of taxation but it is not applicable in this case. The Gasoline tax should even be higher than what itis currently on environmental basis but we all know that this is not the reason behind it in Lebanon. Lebanon lacks a tax system that is capable of generating the income required to run the government and that includes servicing the national debt irrespective of when it was incurred and whether it was used efficiently or not. This income flows into the general funds that are then allocated according to the policy adopted by the cabinet and approved by the Chamber of Deputies. Cut of a portion of this inflow without a decrease in the outflow and the government would then have no choice but to either increase revenue in some other areas or to declare bankruptcy.

    2.  Avatar
      Anonymous

      lebanon89,

      i would like to clarify few things you mentioned in your post concerning fpm or more precisely the aounist movement.

      when we talk about the fpm, we should differentiate between the narrow minded aounist movement elites represented by the few lucky new kids in town like bassil, the aoun family protégés and others, and the majority of the free patriotic movement followers at the base and at large, including the so called wise men of tayar like issam abou jamra for example and many others who were at some time among its initial founders and now eventhough they still consider themselves within the tayar, they question aoun’s dictatorial approach to politics, his 180 degree shifts and unnatural alliances with his sworn enemies as well as his inexplicable antagonism with his previous allies in the mainstream christian and sunni camp.

      they also question the flagrant recent contradictions post 2005 between his tayar ideals and principles and his family nepotism, the machiavellic upper hand and mafia style approach to lebanese politics he unfortunately learned very well from his buddies in the 8th of march group.

      yes i agree with you that you could find in the tayar movement true lebanese followers that are working to promote lebanese ideals, nevertheless, the problem lies within the upper hierarchy.

      it is funny you mentioned wiki leaks, but i think you are referring to a cable dated around the year 2005 and if my memory serves me well, the general at that time was extricating himself from the 14th of march camp and was still in a neutral position before joining the prosyrian group.

      so, the political assessment of the us embassy official you are referring to at the time it was made, and the one you are using to base your judgment upon, was made with the wrong assumption that aoun would remain in the 14th of march camp faithful to his rassemblement pour la republique ideals in france or become neutral as a worst case scenario.

      rallying under the poster of the saudi king i will give it to you was a 14th of march blunder. i will also give you another blunder they made and that was the background of the outdoor posters for the last 13th of march rally 2011.

      if you looked carefully at the crowds in the poster they were all dressed in white like muslim pilgrims in a religious ceremony and that was a blunder too and i hope it was not planned on purpose like that.

      but then again the general allying himself blindly and openly with the syrian and the iranian regimes without any consideration whatsoever for the countless lebanese who still dont have any closure for their sufferings inflicted by mr, aoun’s enemies recently turned into friendly regimes, thanks to the persuasion power of money, was not that a blunder???

      and finally, mr. aoun showed equally no consideration whatsoever for the syrian and iranian people struggling for freedom and dignity while alienating himself with most of the western countries as well as attacking the united nations, its tribunal and its resolutions to please his buddy hezballah, was not that a blunder???

    3.  Avatar
      Anonymous

      Affirmative.

    4.  Avatar
      Anonymous

      Just a couple of years ago Hizbolla officials including Sayid Nassrala would have a Iranian flag behind them and not the Lebanese flag. They openly say they are supported by Iran and Syria. also Aoun opened a tv station in lebanon and paid 50 million dollars to do that. Now a retired Army general gets paid about $5000 a month so where did that money come from? Iran and Syria. When a country gives you money to open a tv station it normally asks you do a few favors for them. Then he spent about 200 million dollars during the elections so either he did a hell of a job reinvesting that $5000 army salary he gets every month or the syrians and iran were so happy with his work that they gave him more money and asked for more favors…. NUMBERS DONT LIE.

  3. Sebouh80 Avatar
    Sebouh80

    Mr.Karam, You hit the Spot.

    As I might have said this previously on a number of occasions in this site that politicians in Lebanon can be best described as either demagogues or amusing charlatans.
    Now let me explain to the viewers, in economics, there is a well known proposition called “Jevons Paradox” or Jevons effect which states that technological progress that increases the efficiency with which a resource is used tends to increase (rather then decrease) the rate of consumption of that resource.
    If we take this argument and apply it into the Lebanese case concerning the consumption and high prices in gasoline then this would still produce a contradictory outcome. Let me explain why. At first people will gradually shift towards much more efficient vehicles to avoid the high prices, and this will lead to increase in fuel consumption which would still in the end cause the same ecological disasters as before.

    1. Sebouh,

      Peak oilers have become the biggest advocates of Jevons Paradox.

  4.  Avatar
    Anonymous

    Mr.Karam, You hit the Spot.

    As I might have said this previously on a number of occasions in this site that politicians in Lebanon can be best described as either demagogues or amusing charlatans.
    Now let me explain to the viewers, in economics, there is a well known proposition called “Jevons Paradox” or Jevons effect which states that technological progress that increases the efficiency with which a resource is used tends to increase (rather then decrease) the rate of consumption of that resource.
    If we take this argument and apply it into the Lebanese case concerning the consumption and high prices in gasoline then this would still produce a contradictory outcome. Let me explain why. At first people will gradually shift towards much more efficient vehicles to avoid the high prices, and this will lead to increase in fuel consumption which would still in the end cause the same ecological disasters as before.

    1. Sebouh,

      Peak oilers have become the biggest advocates of Jevons Paradox.

  5. SamProudLebanese Avatar
    SamProudLebanese

    Well said. Well said.

    Sam
    A proud Lebanese. 

  6. SamProudLebanese Avatar
    SamProudLebanese

    Well written article. Good job!

    Sam
    A Proud Lebanese 

  7.  Avatar
    Anonymous

    Well said. Well said.

    Sam
    A proud Lebanese. 

  8.  Avatar
    Anonymous

    Well written article. Good job!

    Sam
    A Proud Lebanese 

  9. 316909 Avatar

     Aoun is 82yr so once he is dead or loses whats remaining in his brain I wonder what will happen to the FMP? ALL THE FMP SUPPORTERS WILL GO TO THE KATIB AND LF so be patient and wait because Aoun is only a problem until he is dead or retied. He is so power hungry and rude that the rest of the party is basically a bunch of yes men he scares and verbally abuses. Look at the way he speaks in public and just think how he treats people in person. True story. In 1990 my friends father was a artillery officer in the Army and was fighting against the Syrians.  He said Aoun would have panic attacks and was taken to a mental institute several times. I swear to god this is a true story from a high level officer who was recently a mayor of a town for the fmp and is a high level fmp member now. He also said he is riding the wave and getting paid for now and once the mad man (Aoun) is gone I would care less. P.S He told me these stories over dinner and after a few drinks about 2 years ago. I also remember him saying Aoun would not be a good political leader or president because he is too hard headed and has no diplomatic skills back when he was living in France and I said I wish Aoun would come back to Lebanon and become President. 

  10. 316909 Avatar

     Aoun is 82yr so once he is dead or loses whats remaining in his brain I wonder what will happen to the FMP? ALL THE FMP SUPPORTERS WILL GO TO THE KATIB AND LF so be patient and wait because Aoun is only a problem until he is dead or retied. He is so power hungry and rude that the rest of the party is basically a bunch of yes men he scares and verbally abuses. Look at the way he speaks in public and just think how he treats people in person. True story. In 1990 my friends father was a artillery officer in the Army and was fighting against the Syrians.  He said Aoun would have panic attacks and was taken to a mental institute several times. I swear to god this is a true story from a high level officer who was recently a mayor of a town for the fmp and is a high level fmp member now. He also said he is riding the wave and getting paid for now and once the mad man (Aoun) is gone I would care less. P.S He told me these stories over dinner and after a few drinks about 2 years ago. I also remember him saying Aoun would not be a good political leader or president because he is too hard headed and has no diplomatic skills back when he was living in France and I said I wish Aoun would come back to Lebanon and become President. 

  11.  Avatar
    Anonymous

     Aoun is 82yr so once he is dead or loses whats remaining in his brain I wonder what will happen to the FMP? ALL THE FMP SUPPORTERS WILL GO TO THE KATIB AND LF so be patient and wait because Aoun is only a problem until he is dead or retied. He is so power hungry and rude that the rest of the party is basically a bunch of yes men he scares and verbally abuses. Look at the way he speaks in public and just think how he treats people in person. True story. In 1990 my friends father was a artillery officer in the Army and was fighting against the Syrians.  He said Aoun would have panic attacks and was taken to a mental institute several times. I swear to god this is a true story from a high level officer who was recently a mayor of a town for the fmp and is a high level fmp member now. He also said he is riding the wave and getting paid for now and once the mad man (Aoun) is gone I would care less. P.S He told me these stories over dinner and after a few drinks about 2 years ago. I also remember him saying Aoun would not be a good political leader or president because he is too hard headed and has no diplomatic skills back when he was living in France and I said I wish Aoun would come back to Lebanon and become President. 

  12. guss043 Avatar

    Disgusting  two me, repulsing, vulgar, uneducated , Aoun represent the lowest species in human kind when it comes to dignity and honor, raised in the Lebanese Army baracks,  a failed Army that never was able to protect its own people, army of tribes and confessions , Aoun is a despicable men him and his son in law, and his Christian followers are scumbags , they make as Christian vomit, not because of his standing with Hizbollah ,because of the degree and level this men can go to. It is Amazing how the creator increase the life of the evil doers , and shorten the good one, in order to punish the people and redeem them. Aoun represent the man that was raised with no principles , and people who follow them their mothers are the first to blame, to let her kids follow a scum . The Lebanese mother in general is a failed mother , and the proof what country we have, Look at the French coin before the Euro came in, and you see the Mother as the symbol of the French revolution

  13. guss043 Avatar

    Disgusting  two me, repulsing, vulgar, uneducated , Aoun represent the lowest species in human kind when it comes to dignity and honor, raised in the Lebanese Army baracks,  a failed Army that never was able to protect its own people, army of tribes and confessions , Aoun is a despicable men him and his son in law, and his Christian followers are scumbags , they make as Christian vomit, not because of his standing with Hizbollah ,because of the degree and level this men can go to. It is Amazing how the creator increase the life of the evil doers , and shorten the good one, in order to punish the people and redeem them. Aoun represent the man that was raised with no principles , and people who follow them their mothers are the first to blame, to let her kids follow a scum . The Lebanese mother in general is a failed mother , and the proof what country we have, Look at the French coin before the Euro came in, and you see the Mother as the symbol of the French revolution

  14. guss043 Avatar

    Disgusting  two me, repulsing, vulgar, uneducated , Aoun represent the lowest species in human kind when it comes to dignity and honor, raised in the Lebanese Army baracks,  a failed Army that never was able to protect its own people, army of tribes and confessions , Aoun is a despicable men him and his son in law, and his Christian followers are scumbags , they make as Christian vomit, not because of his standing with Hizbollah ,because of the degree and level this men can go to. It is Amazing how the creator increase the life of the evil doers , and shorten the good one, in order to punish the people and redeem them. Aoun represent the man that was raised with no principles , and people who follow them their mothers are the first to blame, to let her kids follow a scum . The Lebanese mother in general is a failed mother , and the proof what country we have, Look at the French coin before the Euro came in, and you see the Mother as the symbol of the French revolution

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