Lebanon’s parliament passes 2024 budget, shunning major reforms

Lebanese Parliament Speaker Nabih Berri leads a parliament session in downtown Beirut, Lebanon January 25, 2024. (REUTERS)
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Updated 27 January 2024
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Lebanon’s parliament passes 2024 budget, shunning major reforms

  • The draft of the 2024 budget seen by Reuters used an exchange rate of 89,000 Lebanese pounds ($5.93) to the US dollar to calculate most tax revenues, while other calculations were set at a rate of 50,000 pounds
  • The crisis erupted after decades of profligate spending and corruption among the ruling elite, some of whom led banks that lent heavily to the state

BEIRUT: Lebanon’s parliament late on Friday passed an amended budget for 2024 that experts said neglected to include crucial reforms that would help the country emerge from a financial meltdown gutting the public sector for nearly five years.
The draft was passed after three days of drawn-out disputes, including several heated exchanges in parliament’s chamber with caretaker premier Najib Mikati, highlighting the deep divisions that have paralyzed Lebanese politics, and prolonged a more than year-long vacuum at the presidency.
The budget, amended over the course of months from a version that had been submitted to parliament by Mikati, anticipated significantly higher state revenues earned through VAT and customs fees.
It also included measures that appeared to target those who had made illicit gains during Lebanon’s financial crisis, by fining companies who unfairly benefited from the central bank’s previous currency exchange platform and traders who used the central bank’s subsidies on imports to generate profit.
Since Lebanon’s economy began to unravel in 2019, the currency has lost around 95 percent of its value, banks have locked most depositors out of their savings and more than 80 percent of the population has sunk below the poverty line.
The crisis erupted after decades of profligate spending and corruption among the ruling elite, some of whom led banks that lent heavily to the state.
The government estimates losses in the financial system total more than $70 billion, the majority of which were accrued at the central bank.
The vested interests of the political and economic class have blocked key reforms required by the International Monetary Fund to unlock a $3 billion aid package for Lebanon, including legislation to resolve its banking crisis and unifying multiple exchange rates for the Lebanese pound.
The IMF had also urged Lebanon to consider increases in social spending “with the goal of protecting the most vulnerable.” It said last year that Lebanon “will be mired in a never-ending crisis” unless it implemented rapid reforms.
But speaking to legislators at Friday’s session, Mikati said the government “stopped the collapse that had been happening, and we began the recovery phase.” Around 40 of parliament’s 128 members requested to comment on the budget, with many objecting to his remarks.
The draft of the 2024 budget seen by Reuters used an exchange rate of 89,000 Lebanese pounds ($5.93) to the US dollar to calculate most tax revenues, while other calculations were set at a rate of 50,000 pounds.
The central bank last year devalued the official currency rate from the longtime peg of 1,500 to a rate of 15,000 pounds to the US dollar.
The Policy Initiative think tank said the draft budget “disproportionately burden middle and lower-income households compared to affluent ones” by lowering the threshold for businesses to pay VAT and offering tax exemptions for big businesses.
Sami Zoughaib, a Lebanese economics expert at The Policy Initiative, said the budget was an example of “Lebanese economic alchemy.”
“It serves no economic purpose and serves no particular vision beyond repeating a cycle of entropic decay for the state, the economy, and society,” he told Reuters. ($1 = 15,000.0000 Lebanese pounds) (Reporting by Maya Gebeily; editing by Diane Craft)

 


Palestinian citizens in Israel demand more security from violence

Updated 58 min 11 sec ago
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Palestinian citizens in Israel demand more security from violence

  • Protests and strikes are sweeping Israel over record levels of violence targeting the country’s Palestinian citizens
  • At least 26 people were killed in January alone, adding to a record-breaking toll of more than 250 last year

KAFR YASIF, Israel: Nabil Safiya had taken a break from studying for a biology exam to meet a cousin at a pizza parlor when a gunman on a motorcycle rode past and fired, killing the 15-year-old as he sat in a black Renault.
The shooting — which police later said was a case of mistaken identity — stunned his hometown of Kafr Yasif, long besieged, like many Palestinian towns in Israel, by a wave of gang violence and family feuds.
“There is no set time for the gunfire anymore,” said Nabil’s father, Ashraf Safiya. “They can kill you in school, they can kill you in the street, they can kill you in the football stadium.”
The violence plaguing Israel’s Arab minority has become an inescapable part of daily life. Activists have long accused authorities of failing to address the issue and say that sense has deepened under Israel’s current far-right government.
One out of every five citizens in Israel is Palestinian. The rate of crime-related killings among them is more than 22 times higher than that for Jewish Israelis, while arrest and indictment rates for those crimes are far lower. Critics cite the disparities as evidence of entrenched discrimination and neglect.
A growing number of demonstrations are sweeping Israel. Thousands marched in Tel Aviv late Saturday to demand action, while Arab communities have gone on strike, closing shops and schools.
In November, after Nabil was gunned down, residents marched through the streets, students boycotted their classes and the Safiya family turned their home into a shrine with pictures and posters of Nabil.
The outrage had as much to do with what happened as with how often it keeps happening.
“There’s a law for the Jewish society and a different law for Palestinian society,” Ghassan Munayyer, a political activist from Lod, a mixed city with a large Palestinian population, said at a recent protest.
An epidemic of violence
Some Palestinian citizens have reached the highest echelons of business and politics in Israel. Yet many feel forsaken by authorities, with their communities marked by underinvestment and high unemployment that fuels frustration and distrust toward the state.
Nabil was one of a record 252 Palestinian citizens to be killed in Israel last year, according to data from Abraham Initiatives, an Israeli nongovernmental organization that promotes coexistence and safer communities. The toll continues to climb, with at least 26 additional crime-related killings in January.
Walid Haddad, a criminologist who teaches at Ono Academic College and who previously worked in Israel’s national security ministry, said that organized crime thrives off weapons trafficking and loan‑sharking in places where people lack access to credit. Gangs also extort residents and business owners for “protection,” he said.
Based on interviews with gang members in prisons and courts, he said they can earn anywhere from thousands to hundreds of thousands of dollars, depending on whether the job is torching cars, shooting at buildings or assassinating rival leaders.
“If they fire at homes or people once or twice a month, they can buy cars, go on trips. It’s easy money,” Haddad said, noting a widespread sense of impunity.
The violence has stifled the rhythm of life in many Palestinian communities. In Kafr Yasif, a northern Israel town of 10,000, streets empty by nightfall, and it’s not uncommon for those trying to sleep to hear gunshots ringing through their neighborhoods.
Prosecutions lag
Last year, only 8 percent of killings of Palestinian citizens led to charges filed against suspects, compared with 55 percent in Jewish communities, according to Abraham Initiatives.
Lama Yassin, the Abraham Initiatives’ director of shared cities and regions, said strained relations with police long discouraged Palestinian citizens from calling for new police stations or more police officers in their communities.
Not anymore.
“In recent years, because people are so depressed and feel like they’re not able to practice day-to-day life ... Arabs are saying, ‘Do whatever it takes, even if it means more police in our towns,’” Yassin said.
The killings have become a rallying cry for Palestinian-led political parties after successive governments pledged to curb the bloodshed with little results. Politicians and activists see the spate of violence as a reflection of selective enforcement and police apathy.
“We’ve been talking about this for 10 years,” said Knesset member Aida Touma-Suleiman.
She labeled policing in Palestinian communities “collective punishment,” noting that when Jews are victims of violence, police often set up roadblocks in neighboring Palestinian towns, flood areas with officers and arrest suspects en masse.
“The only side that can be able to smash a mafia is the state and the state is doing nothing except letting (organized crime) understand that they are free to do whatever they want,” Touma-Suleiman said.
Many communities feel impunity has gotten worse, she added, under National Security Minister Itamar Ben-Gvir, who with authority over the police has launched aggressive and visible campaigns against other crimes, targeting protests and pushing for tougher operations in east Jerusalem and the occupied West Bank.
Israeli police reject allegations of skewed priorities, saying that killings in these communities are a top priority. Police also have said investigations are challenging because witnesses don’t always cooperate.
“Investigative decisions are guided by evidence, operational considerations, and due process, not by indifference or lack of prioritization,” police said in a statement.
Unanswered demands
In Kafr Yasif, Ashraf Safiya vowed his son wouldn’t become just another statistic.
He had just gotten home from his work as a dentist and off the phone with Nabil when he learned about the shooting. He raced to the scene to find the car window shattered as Nabil was being rushed to the hospital. Doctors there pronounced him dead.
“The idea was that the blood of this boy would not be wasted,” Safiya said of protests he helped organize. “If people stop caring about these cases, we’re going to just have another case and another case.”
Authorities said last month they were preparing to file an indictment against a 23-year-old arrested in a neighboring town in connection with the shooting. They said the intended target was a relative, referring to the cousin with Nabil that night.
And they described Nabil as a victim of what they called “blood feuds within Arab society.”
At a late January demonstration in Kafr Yasif, marchers carried portraits of Nabil and Nidal Mosaedah, another local boy killed in the violence. Police broke up the protest, saying it lasted longer than authorized, and arrested its leaders, including the former head of the town council.
The show of force, residents said, may have quashed one protest, but did nothing to halt the killings.