After one week of continuous discussions and 12 parliamentary sessions, Lebanon's parliament yesterday approved the 1998 state budget with a 37.46 percent deficit. House Speaker Nabih Berri said 60 deputies approved, 21 voted against, nine abstained and 38 were absent out of a total of 128 members. The 1998 budget pegs spending at 7,925 billion Lebanese Liras and revenues of 4,956 billion. The parliament had been debating he budget since last Tuesday. Although the forecast deficit is formidable, much of the criticism focused on fears the government would continue its practice of exceeding the planned deficits. Economists say it would take years to trim the deficit from current levels of around 18 percent of the Gross Domestic Product to the international norms of two to three percent. In 1997, the deficit of revenues against expenditure reached 59 percent, well over the forecast 36 percent. During Monday's session, parliament gave the government a green light to borrow $2.0 billion in foreign currency by issuing bonds with maturities up to 30 years. The funds are to be used to reduce the public debt owed in Lebanese Liras, which carries double-digit interest rates.
Financial experts yesterday expressed doubts the government's borrowing plan would solve Lebanon's basic economic problem of a large fiscal deficit. Parliament permitted the government to use part of the borrowing to buy zero coupon US Treasury Bills to guarantee repayment of the $2 billion principle. The article nine tax scheme in the 1998 budget law was one of the most volatile issues of the debate. It calls for raising annual taxes on vehicles up to 400 percent, a 233 percent tax rise on local cement and a doubling of taxes on real estate sales and passport fees.
Regarding the car registration fees, parliament finally endorsed a proposal by Hariri, approved by Berri and President Elias Al-Hrawi, to triple the current fees under a system that takes into account the age and horsepower of the vehicles. The budget law will be challenged by a number of opposition deputies who are expected to appeal to Lebanon's highest constitutional court against some items in the budget.
At the presidential palace in Baabda, President Elias Al-Hrawi and Prime Minister Rafik Al-Hariri today evaluated the parliamentary budget discussions which extended over last week. They also talked about future steps that are supposed to be taken after the holiday of the Feast of Fast Breaking or the Eid Al-Fiter. After the meeting, Hariri headed to Saudi Arabia to spend the Fiter holiday there and is later expected to fly to France. President Hrawi today congratulated the Lebanese and especially the Moslems of Lebanon on the eve of Eid Al-Fiter. Hrawi said Lebanon's happiness; however, will only be complete when Israel withdraws from the South and the Western Bekaa implementing thus UN Resolution 425. The president also received today the Iranian Presidency envoy Mohammed Ali Aftahi who handed Hrawi a letter from his Iranian counterpart Mohammed Khatemi. Aftahi said the letter centered on the necessity of activating bilateral cooperation and the recommendations of the Islamic Summit that was held in Tehran in December. In his letter, Khatemi also reiterated Iran's support to Lebanon.
Three Israeli-detonated bombs today exploded in the Ghawarenah area to the east of the village of Nabatieh, but no one was hurt. The Lebanese army immediately surrounded the area fearing other bombs might be also detonated. Earlier, Israel shelled an abandoned Lebanese army post in Nabatieh Al-Faouqa. Israeli shells also fell on the outskirts of the Litani and Habboush rivers. Israeli war-lanes also conducted mock air raids on the village of Nabatieh and the Iqlim Al-Touffah areas.
The executive committee of the Middle East Council of Churches yesterday announced it will hold its next general assembly meeting in 1999 for the first time since the body was created in 1974. The general assembly usually meets every four years in Cyprus. Last week, they held a meeting in Nicosia to discuss the declining numbers of Christians in the Middle East. The delegates to the one-day conference organized by the Middle East Council of Churches also called for more Christian-Moslem dialogue. Lebanon's Maronite Patriarch Nasrallah Boutrous Sfeir was among those delegates.
The Luxurious Hotel in the heart of Kaslik, Jounieh, Lebanon
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