BEIRUT: Lebanon’s political leaders declared what they called an economic state of emergency Monday following a meeting aimed at finding a solution to the country’s economic crisis, raising concerns that more taxes will be imposed.
Lebanon has one of the world’s highest public debts in the world, standing at 150 percent of gross domestic product. Growth has plummeted and budget deficit reached 11 percent of GDP as economic activities slowed and remittances from Lebanese living abroad shrank.
The government hopes to bring down the budget deficit to 7.6 percent of the GDP this year and to 6.5 percent in 2020.
The meeting at the presidential palace discussed measures to be taken in the near future and as part of the 2020 draft budget.
Prime Minister Saad Hariri told reporters after the meeting that the leaders have agreed on “declaring an economic state of emergency” and the formation of a committee that will follow on the situation.
Hariri added that employment in the public sector will be frozen and work will begin for a new retirement system. He said officials will work on reducing the percentage of the debt through partnership between the public and private sectors.
President Michel Aoun said in a speech at the opening of the one-day session that everyone should make “sacrifices” in order to get one of the world’s most indebted countries out of its problems.
“We have to unite our efforts to come out with solutions to the economic crisis that is strangling the dreams and hopes of our people,” Aoun said.
No official details about the expected measures have been made public but economists who took part in preparatory talks for Monday’s meeting said they included raising tax on gasoline, boosting the value added tax from 11 percent to 15 percent on luxury items, as well as fighting tax evasion.
The meeting came 10 days after international ratings agency Fitch downgraded Lebanon’s ratings and as tensions on the border with Israel increased in recent days. Hezbollah on Sunday fired a barrage of anti-tank missiles in retaliation for an airstrike that targeted the group in Syria and an alleged Israeli drone attack south of Beirut late last month.
The recent developments have led for the first time in years for the US dollar to reach 1,560 Lebanese pounds on the black market, compared with the 1,500 that has been fixed since 1997.
Hariri vowed that the peg of the Lebanese pound to the American currency will remain in place.
Corruption-plagued Lebanon suffers from one of the world’s highest debt ratios, high unemployment and little growth.
In July, Lebanon’s parliament ratified a controversial austerity budget that aims to save the indebted economy.
Last month, Standard & Poor’s Global Ratings maintained its long- and short-term foreign and local currency sovereign credit ratings, saying the country’s outlook remains negative. The agency is scheduled to issue new ratings within six months.
Hariri said Lebanon has a period of six months to act and it is better “that we not become like states that collapsed.”
In January, Moody’s downgraded Lebanon’s issuer ratings to Caa1 from B3 while changing the outlook to stable from negative.
Lebanese officials declare state of economic emergency
Lebanese officials declare state of economic emergency
- Meeting at the presidential palace discussed measures to be taken as part of the 2020 draft budget
- Prime Minister Saad Hariri said employment in the public sector will be frozen and work will begin for a new retirement system
Trump says ‘hopefully’ no need for military action against Iran
- US president said he is speaking with Iran and left open the possibility of avoiding a military operation
- An Iranian military spokesman warned Tehran’s response to any US action would not be limited
PARIS: US President Donald Trump said on Thursday he hoped to avoid military action against Iran, which has threatened to strike American bases and aircraft carriers in response to any attack.
Trump said he is speaking with Iran and left open the possibility of avoiding a military operation after earlier warning time was “running out” for Tehran as the United States sends a large naval fleet to the region.
When asked if he would have talks with Iran, Trump told reporters: “I have had and I am planning on it.”
“We have a group headed out to a place called Iran, and hopefully we won’t have to use it,” the US president added, while speaking to media at the premiere of a documentary about his wife Melania.
As Brussels and Washington dialed up their rhetoric and Iran issued stark threats this week, UN chief Antonio Guterres has called for nuclear negotiations to “avoid a crisis that could have devastating consequences in the region.”
An Iranian military spokesman warned Tehran’s response to any US action would not be limited — as it was in June last year when American planes and missiles briefly joined Israel’s short air war against Iran — but would be a decisive response “delivered instantly.”
Brig. Gen. Mohammad Akraminia told state television US aircraft carriers have “serious vulnerabilities” and that numerous American bases in the Gulf region are “within the range of our medium-range missiles.”
“If such a miscalculation is made by the Americans, it will certainly not unfold the way Trump imagines — carrying out a quick operation and then, two hours later, tweeting that the operation is over,” he said.
An official in the Gulf, where states host US military sites, said that fears of a US strike on Iran are “very clear.”
“It would bring the region into chaos, it would hurt the economy not just in the region but in the US and cause oil and gas prices to skyrocket,” the official added.
‘Protests crushed in blood’
Qatar’s leader Sheikh Tamim bin Hamad Al-Thani and Iran’s President Masoud Pezeshkian held a call to discuss “efforts being made to de-escalate tensions and establish stability,” the Qatar News Agency (QNA) reported.
The European Union, meanwhile, piled on the pressure by designating the Islamic Revolutionary Guard Corps (IRGC) a “terrorist organization” over a deadly crackdown on recent mass protests.
“’Terrorist’ is indeed how you call a regime that crushes its own people’s protests in blood,” said EU chief Ursula von der Leyen, welcoming the “overdue” decision.
Though largely symbolic, the EU decision has already drawn a warning from Tehran.
Iran’s military slammed “the illogical, irresponsible and spite-driven action of the European Union,” alleging the bloc was acting out of “obedience” to Tehran’s arch-foes the United States and Israel.
Iranian officials have blamed the recent protest wave on the two countries, claiming their agents spurred “riots” and a “terrorist operation” that hijacked peaceful rallies sparked over economic grievances.
Rights groups have said thousands of people were killed during the protests by security forces, including the IRGC — the ideological arm of Tehran’s military.
In Tehran on Thursday, citizens expressed grim resignation.
“I think the war is inevitable and a change must happen. It can be for worse, or better. I am not sure,” said a 29-year-old waitress, speaking on condition of anonymity for fear of reprisals.
“I am not in favor of war. I just want something to happen that would result in something better.”
Another 29-year-old woman, an unemployed resident of an upscale neighborhood in northern Tehran, said: “I believe that life has highs and lows and we are now at the lowest point.”
Trump had threatened military action if protesters were killed in the anti-government demonstrations that erupted in late December and peaked on January 8 and 9.
But his more recent statements have turned to Iran’s nuclear program, which the West believes is aimed at making an atomic bomb.
On Wednesday, he said “time is running out” for Tehran to make a deal, warning the US naval strike group that arrived in Middle East waters on Monday was “ready, willing and able” to hit Iran.
Conflicting tolls
The US-based Human Rights Activists News Agency (HRANA) said it has confirmed 6,479 people were killed in the protests, as Internet restrictions imposed on January 8 continue to slow verification.
But rights groups warn the toll is likely far higher, with estimates in the tens of thousands.
Iranian authorities acknowledge that thousands were killed during the protests, giving a toll of more than 3,000 deaths, but say the majority were members of the security forces or bystanders killed by “rioters.”
Billboards and banners have gone up in the capital Tehran to bolster the authorities’ messages. One massive poster appears to show an American aircraft carrier being destroyed.
