MP Michel MOAWAD considered that the discussion of this budget is similar to confessing to the Lebanese people because of the circumstances and flagrant constitutional violations that accompanied it. “We confess to the Lebanese that upon starting our work as deputies we have committed constitutional violations when we passed a law for spending on the basis of twelve months twice. These violations must stop since we will be committing a new violation by deliberating on the budget before discussing closing the accounts, “he said.

In his speech to the hemicycle, during the discussion of the draft budget and annexed budgets, MOAWAD announced that “the submission of closed accounts is a constitutional duty” and called on the government “to meet notwithstanding the political conflicts” to prevent the publication of the budget without closing the accounts. “He said he would vote against any compromise thereto.

MOAWAD suggested removing the conflicting items from the current budget and holding a legislative session next week to approve the articles adopted in accordance with the constitutional provisions “so as not to expose the budget to challenges as was the case with the 2018 budget».

He highlighted that the study of the budget by the members of the Finance and Budget Committee had been subjected to significant pressures. The first pressure brought together the financial and economic situation and the high degree of corruption. The fiscal deficit reached 11.4% in 2018 pending the closure of the accounts, economic competition fell to 105th place, the deficit in the quality of the trade balance was significant, the quality of infrastructure has deteriorated and the deficit of the balance of payments amounted to 3.3 billion in the first four months.

The second pressure, according to MOAWAD, was related to time. The committee received the budget in early June. The government sent a budget without an economic vision and expected the parliament to be flexible. He also mentioned the pressure of financial and classification institutions and the one of the street because each time the slogan «start with the others” was brandished. Despite all these pressures, the Finance and Budget Committee approved the budget in less than a month.

He pointed out the importance of the role of legislative oversight over the work of the commission, because the budget is the pillar, and any discussion of reform and the fight against corruption outside the budget is futile. The budget is the basis for fighting corruption and introducing structural and financial, economic and social reform. He recalled that “we have reached this level of indebtedness as since 2005 the budget is not approved leading to chaos and the increase in public debt in the absence of serious projects, while the return to institutions constitutes the pillar of reforms, the fight against corruption and bringing back Lebanon on the right path “.

He highlighted that the Finance Committee has made every effort, and basically the budget is a budget based on the records that lacks economic vision. For comparative purposes, it’s better than the previous two budgets, but that does not mean that it has met all the requirements and therefore gets the score of 7/20 … He clarified however that the budget has achieved a feat reducing appropriations, repealing 7 articles and amending 58 articles, thus establishing the principle of the comprehensiveness and subordination of loans to the authority of the parliament as well as the fundamental administrative reforms yet the correlation of the hiring process with a complete census of public functions. He stressed the importance of this process, supported by constructive reforms including the abolition of subsidiary budgets and the submission of all administrations to effective control.

MOAWAD argued that despite this work, this does not mean that “we achieved a convincing budget because we played the role of a teacher who can correct the exams without modifying them”. He added: “The parliament is empowered to exercise control and increase reforms, but we cannot play the role of the government, otherwise we will change the path taken by this budget because it is its main problematic issue “.

He emphasized that “the budget has failed to persuade us alike citizens, markets, and international classification institutions. To give a description, this budget can be qualified as the emergency landing budget, knowing that the results of such a maneuver are not guaranteed but we are obliged to follow it while preserving the political and security stability imposing the components the government to respect the principle of self-exclusion from abroad and mobile internal problems ”

“We need to convince our partners that the budget is the beginning of a serious reform path, which must be reflected in the 2020 budget. What we have accepted in the 2019 budget will not be for the 2020 budget.”

MOAWAD regretted the small number of reform articles in the budget and the fact that they rely on collection rather than reform. He asked: “Why are the accounts not closed and why the public sector is not activated and its standards unified? Why this attempt to put a burden on the private sector beyond its capacity? Where is the support of agriculture, industry and a serious tourism policy in the budget? Is it reasonable to talk about support to the productive sectors while in the budget figures we find that the budget of the Ministry of Agriculture represents only 0.32% of the total budget, and that the budget of the Ministry of Industry is only 0.036% and that the budget of the Ministry of Tourism represents only 0.08% of the total budget … is this how we support productivity? “.

He underlined his fears that “the hidden face of the iceberg would be more dangerous than the face apparent in the budget, relying on the funds to be donated by CEDRE conference and gas and oil at the expense of implementing reforms and therefore the budget to gain time “, and emphasized that” oil and gas do not replace reforms and warned against this “.

He also pointed out that there is a fundamental problem also in the transparency and accuracy of figures and expectations, because the budget figures are based on six months and will effectively last five months. They were based on assumptions about national income growth and inflation, but these assumptions have been irrelevant since 2017! The estimated growth is 1.8% when growth is zero if it is not negative and there are no figures for the reduction. He clarified that “the error in the assumptions will have a major impact on the calculation of the deficit ratio”.

He explained that the budget depends mainly on additional revenues and not on the expenditure era, stressing that “the basis of deficit reduction is based on increased revenues, but that these are however circumstantial or on record and that some of them are prejudicial to the national economy, such as the question of the underwriting of banks which damages the economy and which is considered as a purely aesthetic operation; this also applies to the increase in the deposit tax from 7% to 10% and the risks that such a mechanism will cause by threatening the competitiveness of the Lebanese economy, as well as other examples on the increase detailed income such as customs duties and the deferral of treasury bills and other bonds … ”

The most serious problem in the budget is the fact that we are counting on increasing taxes to increase incomes, which is false, because the increase in the rate of taxes does not imply an increase of the revenues of the State because it can lead to a recession entailing itself a reduction in the state’s revenues, which occurred in several countries including Lebanon in 2018 and this is the main reason why no one was convinced that the deficit is reduced at 7.59 “.

He tackled the fact that the increase in taxes would not lead to an increase in income, but to a recession, the solution will take place through structural reforms and policies such as the fight against tax evasion. He asked why no decision “to stop smuggling on border crossings was taken after Customs officials provided all the detailed information on the number of such illegal crossings and the types of illegal crossings fraudulently introduced goods and those responsible for smuggling “. When we asked about the reasons for not adopting the procedures required to annihilate smuggling and their perpetrators, the answer a political decision is required. What prevents the Prime Minister and the Minister of Finance from making this decision, especially since the state’s revenue in case of cessation of smuggling will vary between $ 500 million and $ 1 billion.

“What about the customs evasion which squandered funds amount hundreds of dollars and is still increasing? If the increase in the number of customs officers and inspectors is a problem, why we do not install $ 60 million worth scanners generating an annual income of at least $ 500 million, “he said. The reason according to him relies in the fact that some protected traders who benefit from this reality are hindering.

MOAWAD called for an end to considering institutions as protectorates, while respecting the need for vacancies and the contract sector. It condemned the presence of more than 32,000 employees outside the legal description, recalling that 5,000 people are hired outside the legal regulatory framework despite the ban on hiring. In a statement, the telecommunications minister said there is an “excess” of 500 employees in the two mobile operators companies, highlighting that the volume of salaries and wages represents 40% of the budget, while the same figure in developed countries does not exceed 16%, and this must stop. He continued saying that a temporary authority had been running the port of Beirut since 1993 and the port injected into the state treasury until 2017 only 350 million dollars. The accounts of the Lebanese Tobacco and Tombac Authority were not forwarded to the Finance and Budget Committee and referred to innumerable scandals in the two mobile operators, the Ministry of Telecommunications and Ogero.

MOAWAD emphasized that structural reforms begin with the formation of all governing bodies in the electricity, oil, telecommunications and civil aviation sectors. Ministers have asked that names be submitted to the Council of Ministers instead of waiting for a political consensus that may not take place.

MOAWAD spoke about the reality of the supervisory institutions, pointing out that the central inspection was created in 1959 and had a staff of 150 employees for 5,000 civil servants and 70 employees today despite the fact that the number of civil servants is around 100 without counting the military sector. The reality is not very different at the Board of Accounts. He asked, “Does this reality of regulatory institutions fight corruption”

He highlighted that the fight against corruption cannot be translated by words, but rather by political questioning “. On this point he questioned the Head of Parliament on the fact that only one hearing on questioning was held.

“In spite of my comments, I will be voting for the budget based on the assumption that it is a forced landing,” said MOAWAD, hoping it would be a transition point to begin the reforms required in the 2020 budget.