BEIRUT: The government of heavily indebted Lebanon formally approved a 2019 budget on Monday that includes deep spending cuts to narrow the projected deficit to 7.6 percent of gross domestic product (GDP) in a bid to stave off financial crisis.
The budget reflected “a real government will to take a corrective path” in state finances and is based on a growth forecast of 1.2 percent this year, Finance Minister Ali Hassan Khalil said in a news conference broadcast live on television.
It is seen as an important test of Lebanon’s will to enact reforms that could stabilize its debt trajectory in a state plagued by chronic corruption and waste. The cabinet had already agreed to the budget in principle on Friday, and it must still pass in parliament.
Lebanon’s public debt burden, equivalent to about 150 percent of GDP, is one of the heaviest in the world. Last year’s deficit was equal to about 11.5 percent of GDP, and economic growth rates have been weak for years.
Khalil said the budget had been well received by foreign states. Last year, international donors at the Paris Cedre conference pledged $11 billion in spending on Lebanese infrastructure in return for its government implementing reforms.
“This is a national need, reducing the deficit, before being linked to Cedre ... For sure there is a positive view from all those concerned abroad to what has been achieved on this level: the reform steps and the level of deficit reduction,” he said.
Khalil said that Lebanon now expected the new investment projects to start, and that the Finance Ministry’s efforts to keep the deficit in line with budget projections would show its seriousness.
This would result in the “injection and launching of new investment projects that will have a big impact on moving the economy,” he said.
Khalil said the government had taken steps, which he did not spell out, to bring down Lebanon’s huge trade deficit which he said was “putting pressure on the matter of the foreign currency reserve.”
He said those steps had stirred some “reservations” in government.
Cuts to benefits and pensions for state workers and the military led to protests and strikes as the coalition government spent weeks discussing the budget.
Lebanon’s public sector is its biggest expense, followed by the cost of servicing the public debt and subsidies to an inefficient electricity sector.
The budget includes a government plan to cut some $660 million from debt-servicing costs by issuing treasury bonds at a 1 percent interest rate to the Lebanese banking sector, Khalil has previously said.
Central Bank Governor Riad Salameh said on Monday the bank was “keen to follow up on current efforts with a focus on respect for Lebanese law and global financial rules that do not permit any obligatory measures on banks,” without elaborating.
Salameh said that measures to reform the budget and the power sector were “positive signs” and that financial markets and the Lebanese pound remained stable.
Approving the budget in parliament could take another month, Parliament Speaker Nabih Berri was quoted saying in local newspapers. Lebanon’s parliament is dominated by parties in the coalition.
Lebanon 2019 state budget approved by cabinet
Lebanon 2019 state budget approved by cabinet
- Budget is based on a growth forecast of 1.2 percent this year
- Lebanon’s public debt burden, equivalent to about 150 percent of GDP, is one of the heaviest in the world
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
