When Big Money Influences Elections

Public services in Lebanon are a disaster, the environment is badly damaged and polluted, and conditions of life for most people are demeaning. (Photo: Haytham al-Moussawi)

By: Charbel Nahas

Published Tuesday, January 15, 2013

The government of Najib Mikati recently decided to pay Lebanese municipalities the $1.2 billion it has owed them since February 2010.

If we adjust this sum based on the scale of the economy, then $1.2 billion in Lebanon is roughly equivalent to $420 billion in the US – 60 percent of the amount Washington spent in 2009 to confront the worst financial crisis the global economy has experienced in 80 years.

In France, this sum would be equivalent to 70 billion euros, about two times the size of the budget deficit that its government is desperately trying to reduce.

Its burden on the Lebanese economy is two and half times the Marshall Plan's burden on the US economy, the plan that helped finance the reconstruction of Europe after World War II.

All this means that this large sum, if spent wisely, can profoundly change Lebanon and its economy.

Root of the Matter

Between 1994 and 2010, the Lebanese Ministry of Finance had stolen funds collected by the Ministry of Telecommunications from mobile phone fees that were legally designated to go to the municipalities.

In 2009, telecom minister Gebran Bassil raised the matter with finance minister Mohamad Shatah through correspondences, but with no practical results.

The resolution of the matter came in February 2010 when I was the telecom minister. Then finance minister Rayya al-Hassan refused to release the funds owed to the municipalities, directing them instead to an account in the central bank where the money began to accumulate.

Lost Opportunity

Public services in Lebanon are a disaster, the environment is badly damaged and polluted, and conditions of life for most people are demeaning.

But the projects that the country badly needs – such as sewage disposal networks, landfills for solid waste, a public transportation system, and sound environmental policies – surpass the technical, financial, and organizational abilities of the municipalities.

It was for this reason that I proposed a law that would establish a local development bank, owned by the municipalities, which would be financed by the large fund accumulating in the central bank.

Most of the relevant international agencies supported the idea, but it was ultimately undermined by successive governments’ failure to take advantage of this historic opportunity.

In the first instance, then prime minister Fouad Siniora put a stop to any cooperation on the matter by Hassan, who had showed an interest in cleaning up the government’s finances.

The second lost opportunity came with the current Mikati government. Centrist ministers in the cabinet successfully scuttled any attempts by telecom minister Nicolas Sehnaoui to revive my proposal.

Now, after three years of additional delays, the fund has been released directly to the municipalities, dropping the idea of a development bank from consideration.

Wrong Decision

Distributing the funds to the municipalities in this way will inevitably lead to wasteful spending. The money will be used to complete current projects and initiate ragtag ones, such as building more reinforcement walls and paving roads.

This way, we will have frittered away this non-renewable sum, which is intended as little more than an election bribe, given that it has been released a mere five months before the parliamentary elections are due to be held.

This is truly yet another great achievement that can be added to the record of Lebanon’s consecutive governments.

Charbel Nahas is an economist and the former telecommunications and labor minister of Lebanon.

This article is an edited translation from the Arabic Edition.

Comments

be careful of the translation. don't omit this "عبؤها على الاقتصاد اللبناني يوازي، بالقيم الثابتة، مرتين ونصف المبلغ الإجمالي الذي خصصته الولايات المتحدة الأميركية، عبر خطة مارشال،"
It is two and half times the total amount that the US designated – by way of the Marshall Plan – for the reconstruction of Europe after World War II.

Alain,

Thank you very much for the correction.

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