1/15/2015

POST NO.5

How we can make things better for ourselves in Lebanon

In my previous four posts the readers may have found me too harshly critical of the performance of most of our leaders in Lebanon since independence, and strongly bemoaning the near absence of any serious attempts by civil society to address these issues. They may cite the proverb that says “la critique est facile mais l’art est difficile” (criticizing is easy but performing is hard). This is why, in this fifth post, I shall do my best to try and briefly summarize what, I believe, happened in our country since 1945, what were the causes of our failures, and suggesting how we can remedy them in the short and in the long run.

1.- A glance backward

Let me start by throwing a quick look at the past seventy years and consider the conclusions that we may draw from that exercise. For that purpose, I have arbitrarily divided the entire seventy years period into three main phases:

Ø  The pre-civil war phase (1945-1974). During these first thirty years, corruption and mishandling of public funds were widely spread, though some efforts were made to combat them, especially during the Fouad Chehab Administration (1958-1964) that produced some noticeably good and innovative initiatives. Unfortunately, after the end of his mandate, the old evil habits soon returned, most of the reforms that he introduced were abandoned, the plans, were relegated to the archives, the Ministry of Plan ceased to exist, and was replaced by the CDR., an institution that was used to partially solve some of the problems, leaving the other half unsolved and the wounds in the country’s Administration pestering.

Ø  The civil war (1975-1992) In 1975 the Civil War broke up in Lebanon following the famous Ain El Remmaneh bus incident. Some half million Palestinian refugees eager to find in Lebanon a replacement for their lost State in Palestine rose against the established order, aided and supported by the Moslem population. Their famous slogan: “the road to Palestine passes through Jounieh” only served to add fuel to the fire, and some eighteen years of murderous infighting and destruction ensued that engulfed the entire country and butted half of the population against the other.

Ø  The post-civil war phase (1993-2014) The Civil war ended with the typical Lebanese compromise based on the concept of “La ghaleb wa la magloub” or “no winners and no losers” that left almost everybody unsatisfied, with the exception of a band of war profiteers who constituted a new social class in Lebanon eager to keep hold of their illicit gains and increase them as much as possible. This policy subtly became the credo of an entire new generation for whom only immediate or near immediate personal gains prevailed and no consideration was given to the rest of the population who were left to fend for themselves. This new credo and attitude gradually spread around and moved from the top of the pyramid down to its roots. Lebanon soon became the region’s “Far West” where every strike was allowed as long as one had enough “friends” and “protectors” in high places.

Some people may object to such a brief description of seventy years of Lebanese history and claim that my outlook of the events is biased. Allow me to stick to my views and claim that all that we are complaining about today comes as the result of our lax past behavior. Even, the privileged five per cent of the population, who consider themselves immune to harm through their present wealth, should realize, by now, that this may no longer be the case in the future. The examples of burning Syria, Iraq, Libya, and Yemen, to cite but a few cases, are there to prove it. The French proverb, ”Tant va la cruche a l’eau, qu’a la fin elle se brise”, illustrates that truth perfectly. When some of our leaders, ingrained in their military upbringing, call for jailing all the corrupters and the corrupt, some people ironically remind them that there are too many of these thugs around, and, in Lebanon, our penal system is not large enough to house them all.

On the other hand, reading through that necessarily brief relation of modern Lebanese history, people are bound to ask the perennial question: “OK, so what are we supposed to do, assuming that the author is right in his interpretation of the events?”  In the next paragraph I have tried to answer that question. Maybe you will find it useful to relay to your interlocutors.

2.- How can we turn impediments into assets?

If one reads my numerous writings on the subject and particularly the recent ones that are published on the following addresses: http://www.a-planned-development.blogspot.com, and at  http://www.5-can-help-save-Lebanon.blogspot.com, in addition to my web site that can be reached at http://www.cpi-lebanon.org , one is bound to notice that, since my return to Lebanon in 2005, my outlook on things in general and on solving the Lebanese conundrum has not changed an iota. There is only one way to make things right in this country. How to redress the wrongs is fully described in the above publications and in hundreds of other facebook, linkedin, twitter, and blog posts.

To provide a succinct answer to question number two above I simply propose to enlist the help of the very people who consciously or inadvertently contributed to create the hellish situation in which Lebanon finds itself stuck presently and ask them to simply help us reverse course. Without providing further details, I am sure that they would promptly understand my meaning. In any case, a great deal of suggestions as to how it should be done can be found in my above cited publications., particularly how we can repay entirely our Public Debt by 2032.

POST NO. 4

Public order and Private interest

It is rare to find nowadays in Lebanon much respect and attachment to the concept of public order. Since 1993, that notion has been insidiously replaced by a blind and unrestrained admiration and devotion to private enterprise. In all the domains of our daily life it grew and became strongly encrusted in the conscience and in the mind of the citizens and brought them to disdain and even reject anything related to public service, while inordinately praising and admiring the performance of the private entrepreneur. We shall have to follow a diametrically opposed path during the next twenty years if we wish to “rebuild” the notion of Nation and State that has kept eroding from the public mind in order to serve the interests of a small minority of “profiteers”.

In any case, I believe that this false culture of the “I” that is impressed upon the minds of its adepts has contributed to bring about such events as the recent open assassination of an Yves Naufal or the unacceptable behavior of a Nicolas Fattouch. On the other hand, and in the domain of politics, it has contributed, in some ways, to bring about the recent kamikaze events in Jabal Mohsen in Tripoli. The perpetrators were probably told to do away with all the people who did not believe in their false culture.

To further illustrate my contentions about the ill effects of that exaggerated culture of the “I”, I would cite the fast multiplication in Lebanon of cartels and monopolies, the shady dealings to get rid of the competition, the unlawful acquisitions of certain businesses and the appropriation of entire market shares. But the most dangerous and foolhardy policy currently considered is a recommendation to privatize some public sectors under the pretext that the government is unable to run them efficiently. Let us keep in mind that the same individuals who now seek, through such arguments, to lay their hands on some parts of the public sector, are the ones who contributed to introduce and cultivate corruption through these same sectors. They argue now that only the private sector can run efficiently these departments, ignoring that corruption is just as evil and widespread in the private sector.  

The birth and the subsequent relentless growth of the Lebanese Public Debt vividly illustrate the strong hold exercised by private interests on our public sector. The seven billion dollars that were initially needed in 1993 to reconstruct Lebanon, following 15 years of Civil War, were, in a large part, procured to the government by a group of Lebanese investors. That initial amount was transformed during the following two decades into a gigantic public debt of $75 billion through the accumulation of annual compound interest charges that were never repaid. We currently need twenty more years of hard work and sacrifice if we wish to repay that debt. No one has questioned the odd fact that, at no time, during these twenty years, the matter of repaying at least the interest on that debt was ever brought up.

The current state of mind ought to be reversed and replaced by a new “culture of citizenship”.  Civic sense and the respect of public institutions ought to be taught in private and public schools from the early days, without decrying or underestimating the benefits of private initiative. Civil Society should be allowed and encouraged to monitor the usage of public funds. It is such a positive equilibrium that we ought to tend to reach through careful planning of public governance to replace the current anarchic and ill considered improvisations that are the norm within our public Administration.

This, in turn, requires a complete revision and an overhaul of our public and private system of education. Educators in our public and private schools, please take note.

POST NO.3

Le public et le prive au Liban

 Ce qui nous a manque au Liban, c’est le respect et l’attachement a la chose publique qui ont été subtilement remplaces, particulièrement au court des 20 dernières années, par une fixation démesurée sur l’entreprise individuelle et privée.

 Dans tous les domaines, cet état d’esprit s’est lentement incruste dans la conscience et dans l’esprit du citoyen et a eu pour effet  de lui faire prendre en grippe tout ce qui a trait au service public, au profit des initiatives et des entreprises privées. C’est un processus différend qu’il nous faudrait, a présent entreprendre au cours des 20 prochaines années, si nous voulons « refabriquer » la Nation et l’Etat qui se sont lentement désagrégés au profit d’une minorité de « profiteurs ».

D’ailleurs, a mon avis, c’est cette fausse culture du « moi », primant, dans l’esprit du citoyen, toute autre considération, qui a probablement conduit au tout récent assassinat d’Yves Naufal, ou aux debordements d'un Nicolas Fattouche. C’est cette meme attitude du « moi »,  transposée dans le domaine politique par un groupement criminel qui a provoque les événements de Jabal Mohsen.. C’est toujours le « moi » ou mon « groupe » ou mon "ideologie" qui priment, et au diable les autres.

Afin de mieux illustrer ce phénomène je citerais a titre d’exemples la multiplication des cartels et des monopoles, les combines pour écarter la concurrence et s’approprier exclusivement les profits de certaines entreprises ou même acquérir des parts entières du marche, les tentatives de privatiser certains services publics sous prétexte que le gouvernement, que l’on s’efforce en toute occasion de critiquer et de combattre, est incapable de les gérer efficacement. Même le spectre de la corruption, que certains ont contribue a introduire et a cultiver au sein de la fonction publique, est utilisé comme argument majeur pour justifier la privatisation. Comme si cette corruption n’était pas tout aussi virulente et répandue dans le secteur prive.

D’ailleurs, le cas de la Dette Publique au Liban durant les deux dernières décades illustre significativement l’emprise des intérêts prives sur le secteur public. Les sept milliards de dollars que l’Etat s’est initialement empruntes d’un groupe d’investisseurs se sont transformes en une dette mastodonte de $75 milliards de dollars par suite des intérêts composes qui sont restes impayés durant toute cette période. Il nous faudrait, a présent, un nombre égal d’années de sacrifices et de dur labeur, pour renverser ce processus et rembourser notre dette.

 C’est tout un état d’esprit qu’il nous faut inverser et remplacer par une nouvelle culture citoyenne. Celle du respect de l’autre. C’est  ce sens civique et le respect de la chose publique qu’il faudrait inculquer aux jeunes sans  porter atteinte a l’esprit d’initiative.  C’est cet équilibre  que nous devrions nous efforcer d’atteindre a présent.  C’est une planification minutieusement étudiée de l'ordre public qui devrait remplacer les improvisations et les initiatives intempestives qui ont court aujourd’hui. C’est tout un système éducatif qu’il faudrait réinventer. Avis a nos éducateurs.

POST NO.2

To all the Lebanese citizens who happen to read this announcement 

I wish to ask WHY? Yes, WHY?

 If one comes to realize that, out of the five million citizens who comprise the population of Lebanon, five of them alone, are in a unique position to improve the living conditions of their 4,999,995 compatriots, and contribute toward shaping the future of the entire Nation, then one is entitled to ask: “What are they waiting for?” 

Though, I am sure that the readers of my previous twits and blogs have understood the remarks I published therein, allow me to make these statements, once more, abundantly clear.

 Minister Aly Hassan El Khalil can save Lebanon $34 billion dollars over the next two decades

 In his current position as Minister of Finance, HE El Khalil can go deep down to the root of the problem of the “Real Estate Registration Fees” and save Lebanon one billion seven hundred million US Dollars EVERY YEAR or thirty four billion from 2015 till 2032, by making sure that these fees are fully and integrally recuperated. Calling for the investigation of the performance of 55 public servants in that department, as the Minister has recently ordered, was, of course, necessary and commendable. But much more needs to be done in that domain. Let me explain.

1) Let us start by acknowledging the facts.
Every year, since 2009, the country has witnessed some 15 to 19 million square meters of real estate construction completed as evidenced by the yearly reports of the Syndicate of Architects.

The 6% registration fees on this real estate operation, based on an average value of $1,500 per square meter, and the lowest figure of 15 million square meters, should have contributed some $1.35 billion dollars in registration fees, at the rate of 6%.Of course this amount does not include the proceeds of the registrations of the properties that subsequently move from one owner to the other.  Now, let us look at the actual fees that were received by the Ministry of Finance in 2013. In this year, the amount collected, as per the MOF report, stood at 847 billion Lebanese pounds or 565 million US dollars. This is much less than half of what should have been recuperated according to the current criteria. For the reader’s information, the registration fees received during the preceding five years were: 2008: $386 million, 2009: $417 million, 2010: $568 million, 2011: $560 million, 2012: $580 million dollars. It is clearly evident, from these results, that something is blatantly wrong, in the recuperation process of the real estate registration fees that has seen billions of dollars mishandled during that period.

2) Now let us now consider what the Authorities could do to put an end to this catastrophic situation.
First, the Minister of Finance can ask the Parliamentary Commission on Public Finance to examine the case thoroughly and consider presenting to Parliament a Law proposal  to render the “Registration process” compulsory instead of optional, as is the case presently.
Second, in view of the extremely difficult circumstances that the country currently endures and the dire shortage of public funds, a Law should be passed raising the registration fees from 6% to 8%. Furthermore, it will be appropriate to consider reviewing all the previous real estate registrations recorded from 2009 to 2014 with a view to amend them and compel the owners to refund the difference to the public Treasury. It is estimated that some five billion US dollars can be thus recuperated. This amount is badly needed to finance the construction of the two new gas operated energy plants that could, in turn, save the country some further one and a half billion dollars annually. But that subject will be discussed later on.

3) The entire registration process ought to be thoroughly examined and reviewed.
 The details of each individual registration formality, such as location of the property, its owner, its surface, its average estimated value, the payable amount of the fees, and the amounts collected should be published on an official site for added transparency, and to prevent fraud or manipulations.

4) Transparency 
 Finally, all the Citizens who wish so ought also to be entitled to query any apparently doubtful transaction with the Authorities to ensure that the State is no longer deprived of this essential public revenue.

 Mr. Francois Bassil, President of the Lebanese Bankers’Association can greatly contribute toward saving Lebanon some $114 billion dollars over the next two decades

We believe that the readers would be quick to realize that the largest contributor toward the enhancement of the performance results of the Lebanese Governments over the next twenty years, stands to be a non-governmental entity represented by the Lebanese Bankers ‘Association, the largest holders of our public indenture bonds The Lebanese Bankers’Association, along with the foreign bondholders, should be requested to reduce the average rate of interest on these bonds by two per cent per year (on average, from 6.5% down to 4.5%). This reduction, if consented, would serve to reduce the country’s Debt by some $114 billion US dollars over the next twenty years. The detailed calculations of these savings appear on the table below.

We realize, of course, that it will be very difficult to convince the bondholders of the necessity to accept such a large reduction in the rate of interest. This is what we expect the president of the Association to undertake if he wants to save the country $114 billion dollars over the next two decades.


 Energy Minister Arthur Nazarian can greatly contribute toward saving Lebanon some $10 billion dollars over the next two decades

Minister of Energy and Water Resources, HE Arthur Nazarian should be in a position to confirm that as much as five hundred million dollars a year can be saved at Electricite du Liban (EDL) by exercising stricter control over this institution. It is worthwhile mentioning that the fact has already been identified and pointed out on the web in the past, by EDL’s foreign auditors, and in some public declaration by EDL’s higher management


 The construction of the two planned for Energy plants should serve to reduce the loss at the Ministry of Energy by $1.5 billion dollars a year (based on previous average oil price of $100 a barrel). This would amount to $30 billion dollars over the next twenty years

We have put an interrogation mark against the principal contributor toward that saving because there is no clear understanding as to who will be responsible for planning and supervising the construction of these two plants, once the project is adopted. We assume that the Council for Development and Reconstruction (CDR) could be the institution in charge for implementing this essential initiative.

 Fighting to protect the health of the citizens against greed, corruption, and neglect is probably the most noble achievement of them all, though it cannot be measured or quantified. Our current Minister of Health, HE Wael Abou Faour ought to be commended for this unique gesture.

We cannot conclude this list of contributions by five Lebanese citizens toward the development of Lebanon’s economy and the sustainability of its public finances, without mentioning the efforts deployed by our current Health Minister to fight corruption and promote the protection of citizens’ health in this country.

Reforming our health protection policies represents an extremely valuable initiative that no one can ignore, let alone underestimate. However the efforts of the Ministry of Health alone will not be enough to produce the required results. At least some six other Ministries should be directly involved if one wants to achieve our ultimate goals in this domain. Though there is no way to quantify or price such health improvements one cannot but acknowledge the vital necessity to introduce the needed reforms in all the public sectors

POST NO. 1

FIVE LEBANESE CITIZENS CAN HELP SAVE LEBANON

PLEASE CLICK PICTURE TO ENLARGE IT

 The picture above should be self-explanatory. However, just to dispel any misunderstanding, allow me the following comments:

1. Reforming our health protection policies are extremely valuable initiatives that no one can ignore. However the efforts of the Ministry of Health alone will not be enough to produce the required results. At least some six other Ministries should be directly involved if one wants to achieve our ultimate goals in this domain. Though there is no way to quantify or price such health improvements one cannot but acknowledge the vital necessity to introduce the needed reforms in that sector.

2. Recuperating the full amount of the 6% real estate registration fees would increase the State’s revenue by some $1.7 billion US dollars a year. We are prepared to provide full details of the estimates that have led us to this conclusion. We understand that Finance Minister, HE Hassan El Khalil has already undertaken some serious investigations into the Real Estate registration procedures, as a result of which some 55 public functionaries were officially questioned over their possible involvement in fraud and manipulations. We personally believe that the best way to stop these serious misdeeds would be, in addition to making registration compulsory, to publish monthly in the Official Gazette or some such public registry, the full details of all individual real estate registrations conducted during the month. Such transparency would best serve to prevent subsequent large scale fraud in the future. 

3. We believe that the readers would be quick to realize that the largest contributor toward the enhancement of the performance results of the Lebanese Governments over the next twenty years, stands to be a non-governmental entity represented by the Lebanese Bankers ‘Association, the largest holders of our public indenture bonds, who, along with the foreign bondholders, would be requested to reduce the average rate of interest on these bonds by two per cent per year. This reduction, if consented, would serve to reduce the country’s Debt by some $114 billion US dollars over the next twenty years. 

4. The construction of the two planned for Energy plants should serve to reduce the loss at the Ministry of Energy by $1.5 billion dollars a year (based on previous average oil price of $100 a barrel). We have put an interrogation mark against the principal contributor toward that saving because there is no clear understanding as to who will be responsible for planning and supervising the construction of these two plants, once the project is adopted. We assume that the Council for Development and Reconstruction (CDR) could be the institution in charge for implementing this essential initiative.

5. The final contributor toward improved management of public funds stands to be the Minister of Energy and Water Resources, HE Arthur Nazarian who should be in a position to confirm that as much as five hundred million dollars a year can be saved at Electricite du Liban (EDL) by exercising stricter control over this institution. It is worthwhile mentioning that the fact has already been identified and pointed out on the web in the past, by EDL’s foreign auditors, and in public declaration by EDL’s higher management.

6. More information on the subject is available to would be enquirers on our blog site at: http://www.a-planned-development.blogspot.com

7. MAY I BE ALLOWED TO CONCLUDE BY FERVENTLY WISHING THAT A PROSPEROUS AND FREE FROM DEBT LEBANON BECOMES A REALITY IN 2032.