- 24
- Jan.
- 2024
The state finances are taking center stage these days. They are in the spotlight, dominating media headlines and the intros of television news with their Ibn Battouta-style prose. All of this is because we are on the eve of a new era: the state budget has been presented and is at risk of being adopted on time, for the first time in almost 20 years! The eyes of the world are astonished at this achievement. So, officials multiply ceremonial speeches, inflate their lungs, and inadvertently spit on cameramen. It is high time to reset the financial clock, if there is still one ticking in the state sphere, that is:
- Najib Mikati, sparkling with pride for his management of affairs, believes that 2023 saw a surplus in public finances for the first time in decades. First remark: you are not obligated to believe him. Since 2005, there has been no "closure of accounts" for the year, a document that must be duly verified and approved by the Court of Auditors and Parliament, as stipulated by the Constitution. In the meantime, anything can be said.
- Assuming this is true, this surplus would be the result of a financial practice that goes beyond austerity and borders on cheating. To reduce its expenses, the government no longer honors its commitments on Eurobonds or the interest on treasury bonds (in LBP) at the central bank, no longer provides enough for municipalities, hospitals, schools, the NSSF... and its own army of civil servants. It doesn't even bother to fill a huge hole on the highway, clear rainwater conduits or light up a tunnel. And it does not calculate the "treasury advances" it distributes to ministries, assuming they are recoverable when they never will be.
- In Davos, Mikati even boasted that he managed the country in 2022 with expenses of $750 million, while the budget for 2019 was $17.2 billion. "Manage" in this case is a monumental euphemism. But it still raises a fundamental question: if the country can be managed with $750 billion, does that mean they squandered $16.5 billion in 2019?
- The same goes for the 2024 budget, which is about to be promulgated by Parliament, or, failing that, by the government. Nothing will change, except for heavier taxation that will accentuate tax evasion (we will return to this in another discourse). But officials remain optimistic. They predict that the initially projected deficit may turn into a surplus for at least two obvious reasons: first, a new source of revenue or a miscalculation has been discovered at the Ministry of Finance. Probably a case of faulty calculators.
Second contribution to the revenue chapter, the land registries, a main source of income, will reopen. What is surprising is that a call from the Minister of Finance was enough to get back to work. A late call that comes after 14 months of closure and 50,000 accumulated files.
But why wait so long to unlock the situation? This remains a mystery to some. But, in reality, it is not really a mystery; it is just another way to punish an area (Mount Lebanon) that is the economic heart of the country and to continue the work of dismantling the state.
- On the expenditure side, the budget provides for almost no investment, precisely the kind of spending that fosters growth. Even planned multi-year projects will come to a standstill. The Minister of Public Works, despite his rigorous inefficiency, cries out in despair. The 2024 budget would only cover 20% of the minimum road maintenance needs. This is nothing new; the hole that burst your tires in 2020 is still there, and the subsidence of the road on the Chekka highway still blocks traffic on that stretch.
- To meet unsatisfied needs, the government still relies on international assistance, considering it a vested right. However, the international community is starting to get tired of funding this addiction to aid in a country that cannot even manage its affairs at a minimum. And the dance began with the Aman program to help the poor. But the Minister of Social Affairs does not see it that way and cries foul when he learns that the annual $147 million will be reduced to $33 million. So, there is still money available only until the end of March. He even pretended to be shocked.
According to the most plausible scenario, some donors must have explained to him that dramatic events are happening elsewhere in the world, that monumental tragedies are soliciting their aid, and that their budgets are already undermined by inflation, while their own populations are losing purchasing power.
And he must have replied to them what that beggar in the famous London musical 'Fiddler on the Roof' replied to a neighbor who gave him a Kopek (former small currency in Eastern Europe):
- … But last week you gave me two Kopeks!
- I had a bad week
- If you had a bad week, why should I suffer?
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