News from Beirut September 30  1997 ...Search

Lebanon finds no option but austerity

Lebanon's Council of Ministers today started discussing an austerity budget for the 1998 fiscal year. Today's meeting was one of a series aiming at finalizing the draft budget and referring it to the Parliament before the constitutional date of October 15.

Earlier on, the Lebanese Parliamentary Finance and Budget Committee yesterday commenced discussing the economic situation and is scheduled to hold another meeting in the presence of economic sector representatives and the General Labor Confederation.

Meanwhile, President Elias Hrawi was quoted as saying that the Council of Ministers will discuss in open meetings as of today the budget issue and austerity will be observed in all administrations. He also said improving the collection of state revenues and halting the wasting of money would be a top priority. About increasing the price of gasoline, he said this is not under discussion now and there will be alternatives. He said the envisaged development plan would now be stopped until the budget issue is finalized.

In turn, House Speaker Nabih Berri, in a statement yesterday, announced that there is no problem between him and the Prime Minister, and said they both agree on all economic and political matters. He said he agrees to every point mentioned in the plan proposed by Prime Minister Hariri, except augmenting the price of gasoline. As to the other points, Berri said there would be no problem, especially if matters are quietly discussed with the ministers concerned. He, however, disagreed with the allegation saying that the recent Cabinet rejection of Hariri's plan was political, adding that the way Hariri voted may itself be looked at as political. Asked whether Prime Minister Hariri intended to resign, he said he has repeated more than once that "Prime Minister Hariri is not the type to resign, as he knows his responsibilities".

In the same context, Prime Minister Rafik Hariri was quoted as saying that the country is facing two options: An austerity budget for 1998, or a return to the $800mn development plan. In this connection, Hariri today held consultations with 12 minister who were called to define their requirements in light of the need to reduce the overall budget.

Ministerial meetings plan budget reductions

The meetings held today between Prime Minister Hariri and twelve different ministers at the Cabinet House focused on ways and means to reduce the budget deficit through reducing the budgets allocated to various ministers.

Hariri, following today's meetings, affirmed that reductions would cover all budgets, including the one relating to the presidency of the council of ministers itself. He said we will try to preserve the same level of services, and pointed out that millions of dollars rotated from previous budgets will be spent on currently executed projects. He also denied what is being said about stopping works in some projects.

State Minister for Financial Affairs Fouad Siniora, after meeting Prime Minister Hariri, said the atmosphere was positive, adding that the figures relating to individual budgets will be specified during this evening's cabinet meeting.

Public Health Minister Suleiman Franjieh said solving the problem should not be made at the expense of the Public Health Ministry. He said we can stop constructing a bridge or a road, but we cannot stop caring for the health of citizens.

Hydroelectric Minister Elias Hubaika said the collection of taxes and fees would be pointless without an effective administration. He said internal organization could help implement any plan made by the government. He pointed out that his ministry's budget was reduced by about 30 percent.

Public Transport Minister Ali Hrajli said the reduced budget of his ministry would be enough to cover current expenses like salaries and road maintenance only. Consequently, any construction plan will have to be delayed until the necessary funds are provided.

Social Minister Ayoub Hmaed said the situation at his ministry, especially the contracts signed with social care institutions, require financial commitment amounting to LP70bn. He said any proposed reduction would adversely effect these institutions, and will consequently create social problems. Therefore, he added, he did not agree to the principle of reductions pending discussions at the Council of Ministers.

Labor Minister Asad Hardan announced that there will be no reductions in his ministry's budget, and that it was agreed to keep things as they are. He pointed out that the Labor Ministry's budget is LP4bn only.

Agriculture Minister Shawki Fakhoury asked to keep his ministry's budget as it was in order to keep up with the set ambitions. He said his ministry's budget does not exceed LP47bn, and that he discussed with the Prime Minister ways and means of enhancing revenues in a way that would not affect poor and middle classes.

Economy and Trade Minister Yaseen Jaber said his ministry's budget would remain the same. He viewed that austerity is necessary under the circumstances.

Culture and Higher Education Fawzi Hubeish announce that he supports the policy of austerity under the present circumstances, especially since this policy will lead to stopping waste and controlling expenditures.

Resistance attacks kill one Israeli soldier

One Israeli soldier was killed yesterday in an attack launched by Islamic resistance fighters at an Israeli outpost located near the village of Tallouseh in Merjeyoun. The attack was one in a series launched by the Islamic resistance against a number of Israeli and SLA locations inside the occupied border strip, including Tair Harfa, Masharoun and Rshaf. In a statement, the resistance announced that it detonated an explosive charge along the Jbein main road near east of Tyre.

Ceasefire group urges against endangering civilians

The five nation ceasefire Monitoring Group at a brief meeting at Naqoura yesterday, convened to examine an Israeli complaint accusing the resistance of shelling last Thursday the village of Beit Yahoun, wounding one Lebanese woman.

In a statement issued later in the evening, the Group "admitted that a Lebanese civilian woman was wounded in the leg at the village of Beit Yahoun, and her house was damaged, during a missile attack launched by a Lebanese armed group.

"The Israeli delegate said that the house was at a distance was 100 meters away from the target and that the attack was launched from the village of Braasheet thus constituting violation of the understanding".

On the other hand, the Lebanese delegation said the house was 20 meters away from target. The deployment of a military post working under Israel near civilian houses should not have taken place, the delegation said, explaining that the presence of military units near houses puts civilian lives in danger. The delegation further said that the attack does not constitute a violation of the understanding because it was launched from a place far away from the residential areas".

Concluding, the Group "urged the parties to take all possible measures to avoid exposing civilians to danger".

Netanyahu destroyed all hopes for peace, says Boueiz

Foreign Minister Fares Boueiz, delivering Lebanon speech at the 52nd UN General Assembly in New York, accused the Israeli government of Benjamin Netanyahu of destroying all hopes for peace.

Focusing on activating the mechanism of the international organization to prove the absence of hegemony in its decisions, Boueiz said, "Lebanon strongly supports developing UN institutions especially at the level of  the Security Council through implementing fair geographical and numerical representations".

He warned against the danger of reducing the budget of the UN Relief and Works Agency for Refugees (UNRWA) and the reflections this will have on Lebanon.

He called the international community and donor countries to continue their assistance to the refugees pending a fair settlement of their situations.

As to the peace process, Boueiz strongly criticized the Israeli government and its Prime Minister Benjamin Netanyahu who "destroyed all hopes in the success of the peace process". He said Israel has turned its back to the negotiations achieved in the days of the preceding Israeli government.

Boueiz also commented on the Israeli assaults against South Lebanon which, he said, aims at mobilizing the Israeli public opinion against peace and emptying international initiatives from their political contents. He finally warned that peace in the Middle East is dying, and pointed out to the dangers of betting on any on anything other than the principles arrived at in Madrid.

Lebanese Cabinet ends first round of talks

Lebanon's Council of Ministers, in a four-hour extraordinary session at the Baabda Presidential Palace this evening, ended the first round of open meetings aiming at studying and approving the draft 1998 budget. Another session will be held next Thursday.

Prime Minister Hariri, announcing the Cabinet's decisions, affirmed that most prominent of the suggestions made relate to the subject of sea properties, fees on car mechanics, passports, non-Lebanese workers, levying taxes on imported commodities, cellular phones, and a five percent tax on restaurant and hotel bills.

News Briefs

-The Foreign exchange market in Beirut was exposed to pressures on the Lebanese Pound. The pressures were the first of their kind since the Cabinet's meeting last Wednesday. Banking sources estimated that the amount of dollars sold by the Central Bank exceeded US$100m.

-Central Bank Governor Riad Salameh yesterday affirmed the stability of the monetary situation in Lebanon and said the Central Bank will continue its policy of gradually improving the Lebanese Pound rate of exchange. He affirmed the availability of enough foreign reserves, and denied the figures published with regard to the size of the Central Bank's intervention in the monetary market. He said the Central Bank has sufficient foreign currency reserves to support imports for 10 month, which is a high ratio by Middle Eastern standards.

-Head of the Union of Lebanese Hospitals Fawzi Adaimi, in a statement this evening announced a decision by the Union to give the government until October 20 to settle the amounts due to hospitals. He said the amounts referred to cover the period proceeding June 30, 1997.

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