Lebanon government wins confidence vote as Parliament hit by power cut

Lebanon's new government won a vote of confidence on Monday for a policy programme that aims to remedy a devastating economic crisis, despite the parliamentary session being delayed when the lights went out due to power shortages.

Prime Minister Najib Mikati's government promises to revive talks with the International Monetary Fund and initiate reforms that donors want to see before they will unlock badly needed foreign assistance.

When the session began, Parliament Speaker Nabih Berri urged Mr Mikati to keep his remarks short because of the power cuts, part of a nationwide energy crisis which has disrupted normal life as hard currency reserves have run out.

“From the heart of the suffering of Beirut … our Cabinet was born to light a candle in this hopeless darkness,” Mr Mikati said, as he read out the programme.

“Let's not bother and read it all out. Let's save time because of the electricity issue,” Mr Berri, head of the Shiite Amal movement, told the Sunni Muslim prime minister.

Nevertheless, the session lasted more than seven hours.

Lebanon is stuck in a deep depression, with fuel shortages leading to few if any hours of state-generated power and leaving people largely dependent on privately run generators.

The Cabinet won the vote with a majority of 85 to 15.

Mr Mikati, a billionaire tycoon, faces a tricky path to solid economic ground.

“We will start with the IMF - this is not a choice, it is something we have to go through,” he said in a speech before votes were taken.

To unlock aid and turn the economy around, his government must succeed where numerous forerunners have failed in delivering politically difficult reforms, including measures to address corruption and waste.

While some doubt whether Mr Mikati can achieve much, with parliamentary elections scheduled for next spring to be followed by a change of government, others think the gravity of the crisis may lead to some reforms.

Mr Mikati's government was finally agreed upon after a year of political conflict over Cabinet seats that worsened the crisis.

Its draft policy programme said it would renew and develop a financial recovery plan drawn up by the previous government, which set out a shortfall in the financial system of some $90 billion - a figure endorsed by the IMF.

The plan was shot down by Lebanon's political elite and the banking system, helping to kill off IMF talks last year.

Lebanon's financial system unravelled in late 2019. The root cause was decades of profligate state spending and the unsustainable way in which it was financed.

Wealthy Gulf states, which had traditionally channelled funds into Lebanon, have been reluctant to come to its rescue for years, alarmed by the influence of the Iran-backed Shiite group Hezbollah.

Mr Mikati has pledged to bring Lebanon back into the Arab fold but he faces a delicate balancing act, with Hezbollah last week successfully bringing in a first shipment of Iranian fuel oil to alleviate the power shortages.

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants

THE BIO

Age: 33

Favourite quote: “If you’re going through hell, keep going” Winston Churchill

Favourite breed of dog: All of them. I can’t possibly pick a favourite.

Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?

Favourite colour: All the colours that dogs come in

The Melbourne Mercer Global Pension Index

Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.

The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.

“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.

“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”

Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.

Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.

“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.