Finance Card For The Poor – A Mirage In The Lebanese Desert Of Incompetence. By Tracy Chamoun

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The Reserves in The Central Bank are becoming depleted, especially if the Government gives in to the bid of the Minister of Energy, who is asking for a 200 million dollar advance to keep the hemorrhaging and failing electricity company working and the country from going into blackout. Let us keep in mind that the Minister has had a full year to come up with a workable solution for the impending electricity crisis, but here again, at the last minute, they prefer to milk the very skinny and starving cow that has now become Lebanon’s economy.

Reaching near to the end of The Reserves will force The Governor of the Central Bank to tap in to the Obligatory Reserves which are in fact the savings of the depositors. Because of this terminal situation, the Government has decided to abandon its subsidies of foods (excluding wheat), medicines and 80% of the fuel costs by the end of the month.

The Government has been talking about a “Finance Card” to be given to the poorest families in place of the subsidies which were too broad to target only the poorest sector, and which never reached the people in need, as they goods they covered were mostly smuggled into Syria where they could be sold at three times their value.

Until now, the card has not been confirmed and Lebanon is rapidly approaching a food security crisis exacerbated by this impending lifting of the subsidies. It is predicted that this will lead to huge social unrest fueled by desperation over the shortages and ranging from violence to public property, raiding of supermarkets, robberies, kidnappings and assuredly deaths.

At present, with the rapid increase in poverty, 2.5 million Lebanese will need to benefit from this card which has been in deliberations for months, but the Government has not yet identified these people nor have they determined from which source they will be paid. The result will be more delays at a time when speed is of the essence.  

There are 100,000 families targeted in this drive. So far only 45,000 have been vetted. There is no “Central Registration” in place, which would be the obvious and necessary procedure to carry out such a large exercise, because as usual they have not thought it through. The World Bank by itself hired a separate company to process the qualified names.

Added to this immanent disaster is the fact that the original aid which was raised during the International Conference led by President Macron, which pledged $240 million to the impoverished sector of Lebanon, has still not been disbursed and is mired in arguments, as to how it will be paid? At what exchange rate? And whether the Government will keep a percentage of this money destined to the people as a deposit in the Central Bank? No surprise there…

Because no one has made provisions for the money to come from anywhere else, the Government is betting on the money already bequeathed by the World Bank to start to pay for the “Finance Card” and when this runs out, they will have no choice but to take it from the Obligatory Reserves.

They do not have a long term strategy to deal with this problem such as a national “Solidarity Fund” which could be obtained by imposing a calculated “Poverty Tax” on the wealthiest accounts sitting stagnant in the banks. The problem is that nobody trusts the Government to handle such a fund and to disburse it without political preferences.

This is where we are today. No money and no Government in sight, no strategy or concessions to obtain sustainable external aid and no haste in remedying the problem. These politicians and their political parties seem to have all the time in the world to watch Lebanon descend into hell as the people starve in darkness when the electricity also runs out in a matter of weeks. (But that is another discussion worthy of The Fables Of 1001 And One Nights).

The conclusion is they must really hate the people and for that, they will go to their specially reserved level in hell.   

MARITIME BORDER NEGOTIATIONS – IS IT A FAMILY BUSINESS? BY TRACY CHAMOUN

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For decades now, the Lebanese Maritime Border Negotiations have been the ultimate example of the leader’s botched and failed policies for the nation. After many attempts for decades to define this border, you would think that they could finally get it right?

Instead, under successive Governments, this process has included numerous delineations, failures to register the different decrees both with Parliament and with the United Nations, a bad and costly agreement with Cyprus, and a history of lack of follow up and execution both on the Northern border with Syria and in the South with Israel.

Last year, indirect negotiations with Israel were launched in an effort to revive the matter and address a major economic opportunity for Lebanon during this time of great crisis and hardship.

However, midway into the negotiations, the basis which had been agreed upon prior to the talks with all the parties which included the Americans, The Israelis and The United Nations  was changed, and the demarcation Point 23 was replaced with Point 29 giving Lebanon the right to an additional area of ​​1,430 square kilometers.

Proposing Point 29 was a drastic modification that was interjected in the middle of the negotiations, which were already underway on the basis of different set of assumptions. It is obvious that the negotiating team did not take this position alone, but with the support of the President, who pushed for the amendment of the related Decree 6433 to reflect this change.

The talks ended at that time after the President of the Republic met with the American mediator John Desrocher on December 2, 2020, and he informed him that Lebanon would maintain Line 29 as the new basis for the talks.

Then suddenly, last week, 5 months after insisting on Point 29, during the visit of the US envoy, David Hale, the President suddenly refused to sign the amendment to the Decree claiming that he required the full cabinet’s approval, even though he has in the past signed hundreds of “extraordinary approvals” to pass less urgent motions. This meant that the President for whatever reason one can speculate, was backing down from his previous entrenchment.

After the Prime Minister Designate, the Minister of Defense and the Minister of Transport had all signed the amendment to the Decree, The President’s refusal to sign it has just wasted half a year of progress when negotiations could have been taking place and the matter could have possibly been resolved.  

The questions now are: Will the President sign the amendment to the Decree today prior to the resumption of the negotiations tomorrow? Will he give his team the support that they need to stand their ground? Or will he leave them mired in confusion at the onset of the talks?

To make matters worse, a few days ago former minister Gebran Bassil gave a speech where he muddied the waters even more when he proposed that Lebanon should adopt another “imaginary” line between Hof and Line 29, excluding lines 1 and 23. This erratic set of proposals would indicate that he is looking for a reason to postpone a solution. Maybe he is hoping that it will be deferred to a time when he sees himself as President and reaping the benefits of such a deal? In the meantime Lebanon is dying and does not have the luxury of time or endless delays.

First of all on what grounds is Gebran Bassil involved in these negotiations? As the son-in-law of the President? As a deputy? As the head of a political a political party? Or as a means to insert himself in the discussion as a way of enticing the American’s to lift the sanctions from him?

This debacle over the demarcation line has just highlighted the underlying incompetence of the Presidential team responsible for this file at the palace in Baabda, and has made apparent their inability to formulate a consistent national strategy for the country to preserve and grow its wealth and assets.

Forget the humiliation of being a nation so disorganized that we cannot even get this matter right, the worst part is that this Sovereign wealth is now seemingly being forfeited as usual for narrow familial ambitions.