Nahas on the State of Lebanon’s Political Economy

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Members of the UCC protest on April 29, 2014 in Riad al-Solh Square in Downtown Beirut, demanding fair wages after years of not receiving proper raises. Al-Akhbar/Marwan Tahtah

By: Hussein Mahdi

Published Monday, February 16, 2015

One result of the commodification of education, according to former Labor Minister Charbel Nahas, is seeing young people resort to private higher education, thinking that they are buying “a degree from the university” and they will surely succeed since they followed society’s prescribed path. After all, “without a degree, they cannot follow in their parents’ footsteps at work or migrate elsewhere.” Nahas pointed out that the decline in public education has been accompanied by an increase in the cost of education by 200 percent and an increase in the cost of living by 120 percent in just a decade and a half.

The political economy: A new approach

Nahas said the trend of licensing private universities that began in 1995 has been accompanied by a turn in the Lebanese political economy. After the Taif Agreement, which ended the civil war, the warlords and some new players agreed to establish a new economic system demonstrating their ability to transfer what they learned on the battlefield to the Lebanese pseudo-state.

In 1996, a number of consequential decisions were taken whose effect lasted for 18 years. These include, halting public investment and maintenance of these investments such as water and electricity, halting employment in public administrations, freezing public sector wages from December 31, 1995 till December 31, 2011, i.e., for 15 years during which the cost of living index increased by 120 percent. During this period too, the political authorities created a number of unions under the auspices of the so-called General Confederation of Lebanese Workers (CGTL) which kept a pact with the political authorities to thwart union voices and labor demands. Nahas says the cabinet cancelled at the time laws that established public institutions and targeted the Lebanese University (LU) directly by halting employment in the only public university in the country and taking away its independent decision-making.

There were two attempts to rectify this policy. The first one was in 1999 and the second in 2004 but both were unsuccessful. We moved in that period from a system of bribery to one of austerity “as they call it” but in fact it is a system of blackmail. All labor demands were met with rejection under the pretext of maintaining “financial stability and protecting the Lebanese currency and the banks.” During this period, the public debt multiplied due to late Lebanese Prime Minister Rafik Hariri’s policies. These policies continued and “contractual employment” was passed creating hourly employees, day laborers, wage earners, on-demand workers and other models. Using this strategy, the authorities succeeded in silencing labor rights and consecrated the logic of political favors. They also succeeded in entrenching a policy that suppresses any kind of labor activism on the part of this new workforce since the employees know they stand on precarious legal grounds and can easily be fired from their jobs.

The state also found in the military institution an opportunity for employment and rendering political favors. “We have 140,000 soldiers who constitute 14 percent of the resident Lebanese workforce. Juxtaposing this percentage (14 percent of the workforce) to the US population would mean an army made up of 24 million soldiers. In other words, the number of military forces in Lebanon is double than of the highest number of US troops ever reached during World War II.” The same goes for education. The state was turned into an instrument for rendering political favors at the expense of its jobs and the dignity of its employees. This is a systematic, organized, thought-out and ongoing approach and so it was natural for the Union Coordination Committee (UCC), which represents a coalition of public sector workers and teachers, to be viciously fought.

A rights movement, according to Nahas, is the moving engine behind any group. Not all groups, however, can reconcile between their interests and the choices presented by the political economy. What happened with the Association of Full-time Professors at the LU, which withdrew from the UCC as soon as they received a salary increase, serves as a good example. UCC inherited the consequences of this policy that was adopted after the Taif Agreement, ranging from a compromised public administration to a bloated army and the sacrilege of contractual employment. Since state employees earn their wages from taxpayers — i.e. Lebanese citizens — then these wages should be collected from the huge profits made by the rentier sectors of banking and real estate and from fining violations of sea, river and other public properties instead of the pockets of the poor. It is against this demand that rentier sectors reacted, leading a counterattack to undermine the the UCC and the trade union movement represented by UCC chief Hana Gharib in the Union of Public High School Teachers’ election.

Restoring the value of wages

Nahhas said the years between 2006 and 2011 saw a huge flow of money into the country as a result of the rise in the price of oil and the international crisis in 2008. This led to an increase in the nominal gross domestic product (GDP) by 75 percent. Then the actual interest rates dropped and prices rose rapidly by 15 percent while the prices of domestic fixed assets — especially land — rose by 250 to 350 percent. This gave rise to two lines of thought. The first favors paying the public debt as money became more abundant and the second views what happened as a coincidence that might not be repeated and therefore an opportunity to correct the prevailing economic policy.

Nahas tried to make a breach by restoring the regular session to review wages by virtue of a 1967 law mandating the government to do so. The goal is to adjust wages according to the cost of living index. As a matter of consultation, Nahas presented the issue before the cost of living index committee. The CGTL decided to boycott the work of the committee to obstruct the process. Nahas included the UCC led by Gharib in the dialogue on wage hikes. At the same time, affected groups began to agitate and joined the battle against the authorities making some gains. Public school teachers went on strike in 2010 and got 4.5 percent out of the 6 percent they demanded. LU professors went on strike for 50 days demanding a raise. When they received it they withdrew from the UCC and the judges organized a series of strikes and sit-ins to increase their salaries.

Nahas believed it was necessary to reclaim the value of wages — protecting them before collecting them — by defining a wage as privileged debt resulting in mandatory supplements through the retirement, social security and other systems. Therefore, every amount paid in return for work done is a wage, including transportation allowances and education grants. The hope was that this step would unsettle the normalized state of affairs in order to protect the monetary wage and establish the so-called social wage which would cause a major disruption in public finances prompting a restructuring of their basic priorities.

This article is an edited translation from the Arabic Edition.

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