Lebanon’s plan to raise public pay dismays finance minister

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cabinet Mohamad Safadi-Finance minister 2Lebanon’s cabinet referred a draft law on a new public wage scale to parliament early on Friday, bowing to popular pressure but endangering efforts to control a runaway budget deficit.

Finance Minister Mohammed Safadi said the draft law, which would raise the minimum wage 35 percent and cost around $1.2 billion (790.2 million pounds) a year, would be “economically devastating” for Lebanon.

An eight-hour cabinet session ended just after midnight with agreement on the bill, which stipulates that the measure would be funded by increasing working hours to 35 per week, raising the retirement age to 69 from 64, and increasing some taxes, including an import tax on luxury items.

Public pay demands backed by several strikes and protests in the past month are complicating the struggle to curb a budget deficit which soared by 67 percent to $3.93 billion (2.58 billion pounds) last year.

Lebanon’s economy has slowed sharply in the past two years, mostly due to the conflict in neighbouring Syria which has hit its tourism sector and deepened divisions in the tiny country.

The government has asked for international aid to help it host 370,000 Syrian refugees.

Political jockeying and sectarian tensions have slowed or stalled action needed to tackle Lebanon’s financial problems.

About 4,000 people protested outside the presidential palace during Thursday’s cabinet session and air traffic controllers halted flights at Beirut’s international airport for four hours.

The Union Coordination Committee, which represents public workers, said in a statement that it would meet on Friday to recommend the suspension of the open-ended protests.

Safadi reiterated his objections to the bill, saying it did not secure proper funding and would expand the deficit.

“Is the national economy able to bear the implications of the … draft law and how we will face the inflation rise?” he said in a statement.

Lebanon’s inflation rate stands at around 10 percent.

Reuters

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8 responses to “Lebanon’s plan to raise public pay dismays finance minister”

  1. Patience2 Avatar
    Patience2

    Get rid of Hezbollah, then you might be able to restore the tourist business after which the pay raise can be covered.

    1. 5thDrawer Avatar
      5thDrawer

      Don’t mention the electric bills ….

      1. Patience2 Avatar
        Patience2

        Making them pay their electric bill might actually get rid of them!

        1. 5thDrawer Avatar
          5thDrawer

          It’s another symptom of the flawed political system … nothing kept up with general world inflation, and now it’s a huge leap from years of it being too low. A 35% increase would kill any economy – but for one based in unreality I suppose it boggles the mind of any ‘finance’ minister – especially this one.
          How raising work-hours or retirement age helps, of the perhaps 80% ‘work-force’ who actually work, is unreal it seems to me. Putting more to work with a ‘work-sharing’ concept might help more people and the country – everyone works 20 hrs in jobs that could use 40-hr. weeks at increased rates of pay – with 100% working – until the country has it’s tax-base established and expenses under control – including ‘world-rates’ for the politicians.
          But then … sharing and fairness and equal work-rights … hmmm … tricky ideas here.

  2. Patience2 Avatar
    Patience2

    Get rid of Hezbollah, then you might be able to restore the tourist business after which the pay raise can be covered.

    1. 5thDrawer Avatar
      5thDrawer

      Don’t mention the electric bills ….

      1. Patience2 Avatar
        Patience2

        Making them pay their electric bill might actually get rid of them!

        1. 5thDrawer Avatar
          5thDrawer

          It’s another symptom of the flawed political system … nothing kept up with general world inflation, and now it’s a huge leap from years of it being too low. A 35% increase would kill any economy – but for one based in unreality I suppose it boggles the mind of any ‘finance’ minister – especially this one.
          How raising work-hours or retirement age helps, of the perhaps 80% ‘work-force’ who actually work, is unreal it seems to me. Putting more to work with a ‘work-sharing’ concept might help more people and the country – everyone works 20 hrs in jobs that could use 40-hr. weeks at increased rates of pay – with 100% working – until the country has it’s tax-base established and expenses under control – including ‘world-rates’ for the politicians.
          But then … sharing and fairness and equal work-rights … hmmm … tricky ideas here.

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