epa07537659 Retired army officers and soldiers carry Lebanese flags as they block the Lebanese Central Bank during a protest in Beirut, Lebanon, 30 April 2019. According to media reports, retired military and security personnel blocked entrances to the Lebanese Central Bank and the Beirut Port as a preemptive strike against any austerity measures in the 2019 draft state budget that might affect their retirement wages or benefits.  EPA/NABIL MOUNZER
Retired army officers and soldiers protesting austerity measures in Beirut, Lebanon, amid fears their pensions and benefits would be affected. Nabil Mounzer / EPA

Tax rises and bailouts will not save Lebanon



Just a month after Lebanon introduced controversial austerity measures, Fitch has downgraded the nation’s credit rating to CCC. If the downgrading makes a mockery of Lebanon’s attempts to tighten its breeches, Fitch is not alone. Laughter echoed around the chamber last month when Lebanese MP Salam Saadeh addressed his fellow parliamentarians over the country’s first austerity budget: “The international donors know we’re lying and we know that they know we’re lying, so everything is fine,” he joked. Even long-time parliamentary speaker Nabih Berri couldn’t resist a chuckle.

Mr Saadeh might have a point about the so-called austerity budget. Financial analysts think the aim of reducing this year’s deficit to 6.59 per cent from last year’s 11.5 per cent is overly optimistic; they think it will be closer to 9.75 per cent. Bloomberg recently reported that payments to contractors and public entities have been delayed to bolster the figures. Other cost-saving measures are pinned on hopes of the government being able to issue treasury bonds at well below market interest rates, something Lebanese lenders are already refusing to do.

To date, the full details of the new budget have not been made public. The measures we do know of include a three-year freeze on state hiring, a 3 per cent tariff increase on imported goods, a tax hike on interest on deposits from 7 per cent to 10 per cent, cuts in government spending and a tax on military pensions. There have also been promises made in terms of overhauling the state-owned electricity company, which costs the government more than $2 billion a year in subsidies. These meagre measures will most likely fail to lower the budget deficit or truly put Lebanon's economy back on track. Ironically, Lebanese MPs scrapped a proposal to limit their own salaries, which they receive for life at a total cost of $20 million per year, paid by the Lebanese state.

Storm clouds have been brewing over the Lebanese economy for some time now. GDP growth has been hovering at less than 2 per cent over the last few years. But the real alarm bell that woke the Lebanese government came in January this year when Moody's further downgraded Lebanon's credit rating to junk over debt default concerns. The fallout from the downgrade caused the cost of insuring Lebanon's debt to skyrocket and spurred rumours of a debt haircut – a reduction applied to the value of an asset – and currency devaluation.

Further, Lebanon's debt-to-GDP ratio is projected to rise to nearly 180 per cent by 2023, surpassing that of Greece. The public debt has increased 1.3 per cent in the first three months of the year to $86.2bn from the end of last year. From 2005 until 2017, parliament did not even pass a formal budget, creating a lack of financial accountability. A public-sector wage increase in 2017, a decrease in remittances from Lebanese people working abroad and a decline in tourism due to political and regional instability have only exacerbated matters.

Faced with the third-highest public debt in the world and nearly non-existent economic growth, Lebanon has been forced to pass austerity measures in the hope of unlocking $11 billion in loans from Cedre conference donor countries and promises of investment hinged upon Lebanon correcting its finances. But those measures are a mere drop in the ocean. Lebanon’s structural problems and crippling corruption need to be tackled to solve its economic woes.

Despite the constant boast of the country being the "Switzerland of the Middle East", Lebanon ranks 138 out of 180 on Transparency International's Corruption Perception Index and 142 on the World Bank's ease of doing business scale. Its infrastructure is in disarray. The country lacks round-the-clock power and its landline internet speed ranks among the slowest in the world. The mounting garbage crisis, in a country that boasts natural beauty as one of its assets, is adding to its troubles.

There are still some members of the government banking on much-touted tourism to save the day. Yet Lebanon receives less than half the tourists neighbouring Cyprus does and a week-long package holiday is cheaper in nearby Turkey, which has a stronger tourism infrastructure. Years of unbridled construction have seen Beirut’s beautiful old houses disappear and large swathes of the country’s woodlands, among the major attractions in the country, have been cut down to make way for grandiose luxury property projects.

Tariff hikes and bailouts will not be enough to save Lebanon. With such high levels of debt and borrowing costs, the country has very little bandwidth to continue without real reforms.

The government must adopt a long-term strategy and economic vision for the country. Lebanon still has some of the best universities and hospitals in the region, coupled with a high literacy rate. There is no reason the country could not attract major foreign investment and regain its former glory days as a major financial hub. Donor countries should push for the privatisation of corrupt state-run companies, and revisions in investment laws and the bureaucracy to open up the country’s business landscape. Only then will Lebanon be on stable ground and enjoy the prospect of growth.

Paul Gadalla is a former Beirut-based journalist who worked in communications at the Carnegie Middle East Centre. He has an MA in political science with a focus on the Middle East from Northeastern University in the US

How tumultuous protests grew
  • A fuel tax protest by French drivers appealed to wider anti-government sentiment
  • Unlike previous French demonstrations there was no trade union or organised movement involved 
  • Demonstrators responded to online petitions and flooded squares to block traffic
  • At its height there were almost 300,000 on the streets in support
  • Named after the high visibility jackets that drivers must keep in cars 
  • Clashes soon turned violent as thousands fought with police at cordons
  • An estimated two dozen people lost eyes and many others were admitted to hospital 
Maestro

Director: Bradley Cooper

Starring: Bradley Cooper, Carey Mulligan, Maya Hawke

Rating: 3/5

 


 

'Of Love & War'
Lynsey Addario, Penguin Press

Company profile

Company name: Shipsy
Year of inception: 2015
Founders: Soham Chokshi, Dhruv Agrawal, Harsh Kumar and Himanshu Gupta
Based: India, UAE and Indonesia
Sector: logistics
Size: more than 350 employees
Funding received so far: $31 million in series A and B rounds
Investors: Info Edge, Sequoia Capital’s Surge, A91 Partners and Z3 Partners

The biog

Name: Sari Al Zubaidi

Occupation: co-founder of Cafe di Rosati

Age: 42

Marital status: single

Favourite drink: drip coffee V60

Favourite destination: Bali, Indonesia 

Favourite book: 100 Years of Solitude 

Scoreline:

Barcelona 2

Suarez 85', Messi 86'

Atletico Madrid 0

Red card: Diego Costa 28' (Atletico)

RACE CARD

5pm: Sheikh Mansour bin Zayed Al Nahyan Racing Festival Purebred Arabian Cup Conditions (PA); Dh 200,000 (Turf) 1,600m
5.30pm: Sheikha Fatima bint Mubarak Cup Conditions (PA); Dh 200,000 (T) 1,600m
6pm: Sheikh Sultan bin Zayed Al Nahyan National Day Cup Listed (TB); Dh 380,000 (T) 1,600m
6.30pm: Sheikh Sultan bin Zayed Al Nahyan National Day Group 3 (PA); Dh 500,000 (T) 1,600m
7pm: Sheikh Sultan bin Zayed Al Nahyan National Day Jewel Crown Group 1 (PA); Dh 5,000,000 (T) 2,200m
7.30pm: Sheikh Mansour bin Zayed Al Nahyan Racing Festival Handicap (PA); Dh 150,000 (T) 1,400m
8pm: Wathba Stallions Cup Handicap (PA) Dh 100,000 (T); 1,400m

Directed by: Craig Gillespie

Starring: Emma Stone, Emma Thompson, Joel Fry

4/5

Temple numbers

Expected completion: 2022

Height: 24 meters

Ground floor banquet hall: 370 square metres to accommodate about 750 people

Ground floor multipurpose hall: 92 square metres for up to 200 people

First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time

First floor terrace areas: 2,30 square metres  

Temple will be spread over 6,900 square metres

Structure includes two basements, ground and first floor 

THE SPECS

Touareg Highline

Engine: 3.0-litre, V6

Transmission: 8-speed automatic

Power: 340hp

Torque: 450Nm

Price: Dh239,312

BEACH SOCCER WORLD CUP

Group A

Paraguay
Japan
Switzerland
USA

Group B

Uruguay
Mexico
Italy
Tahiti

Group C

Belarus
UAE
Senegal
Russia

Group D

Brazil
Oman
Portugal
Nigeria

SRI LANKA SQUAD

Upul Tharanga (captain), Dinesh Chandimal, Niroshan Dickwella
Lahiru Thirimanne, Kusal Mendis, Milinda Siriwardana
Chamara Kapugedara, Thisara Perera, Seekuge Prasanna
Nuwan Pradeep, Suranga Lakmal, Dushmantha Chameera
Vishwa Fernando, Akila Dananjaya, Jeffrey Vandersay

MATCH INFO

Uefa Champions League, last 16, first leg

Liverpool v Bayern Munich, midnight (Wednesday), BeIN Sports

Rocketman

Director: Dexter Fletcher

Starring: Taron Egerton, Richard Madden, Jamie Bell

Rating: 3 out of 5 stars 

Ireland v Denmark: The last two years

Denmark 1-1 Ireland 

7/06/19, Euro 2020 qualifier 

Denmark 0-0 Ireland

19/11/2018, Nations League

Ireland 0-0 Denmark

13/10/2018, Nations League

Ireland 1 Denmark 5

14/11/2017, World Cup qualifier

Denmark 0-0 Ireland

11/11/2017, World Cup qualifier

 

 

 

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

Queen

Nicki Minaj

(Young Money/Cash Money)

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

Meydan race card

6.30pm: Maiden Dh 165,000 1,600m
7.05pm: Handicap Dh 185,000 2,000m
7.40pm: Maiden Dh 165,000 1,600m
8.15pm: Handicap Dh 190,000 1,400m
8.50pm: Handicap Dh 175,000 1,600m
9.25pm: Handicap Dh 175,000 1,200m
10pm: Handicap Dh 165,000 1,600m

Q&A with Dash Berlin

Welcome back. What was it like to return to RAK and to play for fans out here again?
It’s an amazing feeling to be back in the passionate UAE again. Seeing the fans having a great time that is what it’s all about.

You're currently touring the globe as part of your Legends of the Feels Tour. How important is it to you to include the Middle East in the schedule?
The tour is doing really well and is extensive and intensive at the same time travelling all over the globe. My Middle Eastern fans are very dear to me, it’s good to be back.

You mix tracks that people know and love, but you also have a visually impressive set too (graphics etc). Is that the secret recipe to Dash Berlin's live gigs?
People enjoying the combination of the music and visuals are the key factor in the success of the Legends Of The Feel tour 2018.

Have you had some time to explore Ras al Khaimah too? If so, what have you been up to?
Coming fresh out of Las Vegas where I continue my 7th annual year DJ residency at Marquee, I decided it was a perfect moment to catch some sun rays and enjoy the warm hospitality of Bab Al Bahr.

 

MATCH INFO

Champions League quarter-final, first leg

Ajax v Juventus, Wednesday, 11pm (UAE)

Match on BeIN Sports

COMPANY PROFILE

Name: Kinetic 7
Started: 2018
Founder: Rick Parish
Based: Abu Dhabi, UAE
Industry: Clean cooking
Funding: $10 million
Investors: Self-funded

if you go

The flights

Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.

The hotels

Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.

When to visit

March-May and September-November

Visas

Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.

Avatar: The Way of Water

Director: James Cameron

Stars: Sam Worthington, Zoe Saldana, Sigourney Weaver

Rating: 3.5/5

Specs

Power train: 4.0-litre twin-turbo V8 and synchronous electric motor
Max power: 800hp
Max torque: 950Nm
Transmission: Eight-speed auto
Battery: 25.7kWh lithium-ion
0-100km/h: 3.4sec
0-200km/h: 11.4sec
Top speed: 312km/h
Max electric-only range: 60km (claimed)
On sale: Q3
Price: From Dh1.2m (estimate)

SPECS

Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

Match statistics

Abu Dhabi Harlequins 36 Bahrain 32

Harlequins

Tries: Penalty 2, Stevenson, Teasdale, Semple

Cons: Stevenson 2

Pens: Stevenson

Bahrain

Tries: Wallace 2, Heath, Evans, Behan

Cons: Radley 2

Pen: Radley

Man of the match: Craig Nutt (Harlequins)

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

COMPANY PROFILE

Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside