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November 15, 2019
The Government Monitor No. 7 - Lebanese Government: A Dismal Performance


What’s the Issue at Hand?

In light of the unprecedented mass protests that began on 17 October across the country, Prime Minister Hariri resigned on 29 October 2019. During the government’s nine-month tenure, little was done to address the country’s precarious financial situation, its socio-economic woes, and structural challenges. In fact, LCPS reviewed the government's track record by analyzing its legislative output which includes all decisions, decrees, laws, as well as the cabinet's agenda. Here is a short synthesis:
 
  • Out of the 1,567 legislative texts issued in the Official Gazette between 21 February and 31 October, 2019, the Lebanese government passed 1,354 administrative measures (86% of the overall legislative texts),1 87 international agreements (6%),2 and 126 regulatory measures (8%).3
  • Administrative measures covered the following: 25% naturalization requests, 11% license issuance, 10% domestic contributions,4 5% appointments, 5% financial transfers, and others.
  • The international agreements included 59 approvals of foreign contributions (68%) that totalled LBP 882 billion (of which LBP 764 billion are loans), and 28 agreements and MoUs (32%) related to climate change, sports regulations, trade, movement of labor, and others.
  • The 126 regulatory measures were mostly about taxation (27%), primarily extensions of deadlines and exemptions, and education (9%), mainly setting curricula and degree requirements. The remaining measures addressed policy areas such as budget, agriculture, foreign trade, and others. While these measures have some policy implications, only two bills are considered to be significant:
  1. The first is the electricity sector reform bill that was passed in April 2019 but is yet to be implemented. While the plan is a good step toward overhauling the sector and reducing the burden it poses on Lebanon’s treasury, its legal framework undermines the role of key state institutions and allows for the politicization of the tendering process.
  2. The second is the belated 2019 budget law that was passed seven months after its constitutional deadline and halfway through the year, rendering it ineffective. The law failed to introduce any structural reforms to address Lebanon’s deep fiscal challenges and exhibited an overly optimistic estimation of the fiscal deficit (7.6%).5
  • Not only was the government’s legislative output dismal, but very few regulatory measures were even discussed in the first place. More precisely, only 5% of the cabinet's agenda items were regulatory in nature, while the remaining 95% were either administrative matters or related to international agreements. 

Why is this Important?
Lebanon’s national unity government, which was formed eight months after the country held parliamentary elections, failed during its nine-month stint to push forward its reform agenda upon which it gained the confidence of parliament. In fact, the reforms stated in the government's ministerial statement and in the CEDRE reform program that the government pledged to implement in April 2018, were neither passed nor debated by the Council of Ministers.
 
Background
In the midst of a worsening economic crisis, people took to the streets, motivated by a dire socio-economic and political situation, calling for a wide range of demands. After the resignation of the prime minister, the country now lacks an operating government in a moment where urgent reforms are necessary.
 
 
1 Administrative measures apply existing rules and procedures to individuals or organizations.
2 International agreements contain the approval of foreign loans, foreign grants, and memorandums of understanding.
3 Regulatory measures entail the application or establishment of an impersonal, generally applicable rule.
4 These contributions range from $1,000 worth of equipment to a set of bulldozers worth $2.7 million.
5 International Monetary Fund. 2019. ‘Lebanon: Staff Concluding Statement of the 2019 Article IV Mission.’ https://www.imf.org/en/News/Articles/2019/07/02/mcs070219-lebanon-staff-concluding-statement-of-the-2019-article-iv-mission





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