Lebanese cabinet approves policy document clearing way for parliament vote

Lebanese President Michel Aoun heads leading cabinet at the presidential palace in Baabda. Reuters

The new Lebanese government has passed the first hurdle to reopen the government by approving the policy statement that lays out the new cabinet’s plans.

Just a week after cabinet was formed, ending the long delay since the May 2018 election, the government now has just one final formality before it can get to work.

Parliament will need to convene to approve the policy statement. While all the major parties are represented in cabinet, meaning the vote is an almost foregone conclusion, members of parliament will be able to quiz the government on policy and process.

No date has yet been set for MPs to debate the plan but Speaker Nabih Berri will likely call a session in the coming days.

Thursday’s Cabinet session took place at Baabda Palace and President Michel Aoun told the new intake of ministers: “The policy statement covered all main topics and we hope that it will be achieved and no time is wasted.”

The document draws up a plan of aims for the Lebanese government. Prime Minister Saad Hariri and several ministers have said that the priority will be passing economic reforms to unlock $11 billion in grants and loans offered to the country to rebuild ageing infrastructure and kick start the stalled economy.

Local media reported that a draft of the policy statement included a commitment for Lebanon to reduce the deficit by one per cent a year for the next five years. To do this it will reduce subsidies – currently costing some $2 billion a year, a sizable chunk of the national budget – that goes to the ageing Electricité du Liban.

The state provider cannot generate enough electricity to provide 24-hour power but has been making a loss for years as the price billed to customers is well under the cost per unit. No government has been willing to take the politically unpopular move or increasing electricity bills while they cannot provide consistent electricity.

The draft also reportedly stressed that Lebanon would commit to “a consistent financial and monetary policy to boost confidence in the national economy and reduce the public debt-to-GDP ratio by increasing the size of the economy and reducing the treasury budget.”

Mr Hariri has said that the reforms will be “difficult and painful” but stressed that it would be necessary to prevent economic ruin.