World

Hariri agrees reform package in bid to resolve economic crisis

October 20, 2019
Lebanese demonstrators wave national flags on a highway linking Beirut to north Lebanon, in Zouk Mosbeh as they take part in a rally during the fourth day of demonstrations against tax increases and official corruption, on Sunday. Thousands continued to rally despite calls for calm from politicians and dozens of arrests. The demonstrators are demanding a sweeping overhaul of Lebanon's political system, citing grievances ranging from austerity measures to poor infrastructure. — AFP
Lebanese demonstrators wave national flags on a highway linking Beirut to north Lebanon, in Zouk Mosbeh as they take part in a rally during the fourth day of demonstrations against tax increases and official corruption, on Sunday. Thousands continued to rally despite calls for calm from politicians and dozens of arrests. The demonstrators are demanding a sweeping overhaul of Lebanon's political system, citing grievances ranging from austerity measures to poor infrastructure. — AFP

BEIRUT — Lebanon's Prime Minister Saad al-Hariri has agreed a package of reforms with government partners to ease an economic crisis that has sparked nationwide protests, official sources said, with a Cabinet meeting expected on Monday to approve them.

Hariri, who is leading a coalition government mired by sectarian and political rivalries, proposed reforms in which the decisions call for a 50% reduction in the salaries of current and former officials and $3.3 billion in contributions from banks to achieve a "near zero deficit" for the 2020 budget.

It also includes a plan to privatize its telecommunications sector and an overhaul to its crippled electricity sector, a crucial demand among potential foreign donors and investors needed to unlock some $11 billion in funds to Lebanon.

The sources said the budget would not include any additional taxes or fees amid widespread unrest that were triggered in part by a decision last week to put a levy on WhatsApp calls.

The reforms also called for establishing new regulatory and transparency bodies within a "short period" of time to oversee reform plans. Central to protester demands is an end to what they say is rampant corruption destroying the economy.

Massive protests swelled across Lebanon on Sunday in an unprecedented show of dissent against its ruling elite as hundreds of thousands converged to demand the overthrow of a system they see as riddled with corruption and cronyism.

A sea of people, some draped in or holding Lebanese flags, crammed roads nationwide for a fourth day, calling for revolution in protests that resembled the 2011 Arab revolts that toppled four presidents.

Cheerful, buoyant and hopeful their protests would bring change, people of all ages and religions played patriotic songs and danced in the streets, with some forming human chains and chanting for their leaders to be ousted.

Festival-like scenes dominated the country from the capital Beirut to remote towns, with loudspeakers blaring music as crowds kept pouring into the streets.

"I am here because I am disgusted by our politicians. Nothing works. This is not a state. Salaries are very low, prices are very high. We don't even have work these days," said Cherine Shawa, 32, an interior architect, in Beirut.

The anti-government protests, fueled by crippling economic conditions and anger at perceived government corruption, have fanned out across the country since Thursday.

"We're here to say to our leaders 'leave'. We have no hope in them but we're hopeful that these protests will bring change," Hanan Takkouche, in her 40s and among a group of women in the capital. "They came to fill their pockets. They're all crooks and thieves," she added.

Ending rampant corruption is a central demand of the protesters, who say the country's leaders have used their positions to enrich themselves for decades through favorable deals and kickbacks.

Many blamed the ruling elite for driving their children out of Lebanon because they failed to build a country that could provide jobs. The mounting unrest has piled pressure on Hariri to deliver a package of badly needed reforms to bring the country's crumbling economy, which has one of the world's highest debt levels, back from the brink.

Hariri, who is leading a coalition government mired by sectarian and political rivalries, gave his feuding government partners a 72-hour deadline on Friday to agree reforms that could ward off crisis, hinting he may otherwise resign.

He accused his rivals of obstructing budget measures that could unlock $11 billion in Western donor pledges and help avert economic collapse.

A rising chorus of voices, from union leaders to politicians, have joined popular calls for Hariri's government to resign.

The Maronite Christian Lebanese Forces party has said its four ministers would withdraw from the government. Army troops and security forces deployed across the country and blocked roads leading to the presidential palace, which protesters had tried to reach on Thursday.

Banks said they would remain closed on Monday, the start of the working week, and the country's main labor union announced a general strike, threatening further paralysis.

If Hariri resigns it would be harder for the various parties that make up the ruling coalition to form a new Cabinet.

A new Cabinet would also likely see Iranian-backed Hezbollah and its allies more in control, a shift that would make it nearly impossible for international donors or Gulf Arab countries to offer aid or investments.

"We want all of them to go, from the president to the prime minister and ministers," said unemployed Hanan Sinno as she protested in Beirut.

"All of the leaders should be put under house arrest and be held accountable to return the money they stole from the state so Lebanon can get back on its feet," said Antoine Zahli, 43, a pharmacist who was among the protesters in downtown Beirut.

Charbel Antoun, a 17-year-old student added: "We want to stay in Lebanon to build our future but if these corrupt politicians stay here what future will be left for us?"

Hezbollah leader Sayyed Hassan Nasrallah has thrown his powerful Shi'ite group's weight behind the current government, saying the country's deep economic crisis means precious time should not be wasted forming a new one.

Without a foreign funding boost, officials and economists predict a currency devaluation or a debt default within months. The IMF said last week that Lebanon's crisis requires tough austerity measures such as tax hikes and levies on fuel, steps the country's politicians have publicly vowed not to take.

The IMF said the reforms were needed to stem a ballooning deficit and public debt it forecasts to reach 155 percent of GDP by year-end.


October 20, 2019
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