A beaming Hariri gets budget approval
Lebanon, Economics, 10/4/1997

Lebanon's Cabinet has approved Prime Minister Rafik Hariri's austerity budget for 1998, ending nine days of political wrangling between officials.

Announcing the victory to reporters late Friday, a beaming Hariri said the new budget was a "cornerstone for the gradual recovery of an economy stifled by overspending and administrative inefficiency." The results of the cabinet's meeting, which lasted one a half hours were announced as follows:

7325 billion L.L. for the expenditure
200 billion L.L. to spend on municipalities
350 billion L.L. in unused allocations carried over from 1997.
4956 billion L.L. of revenues.

The deficit was narrowed down to 37 percent by streamlining expenditure, improving the collection of taxes and public utility bills and adding fees in 12 different areas that would not affect the poor.

The figures represent a nearly six percent rise in expenditure over last year's budget and a drop of more than 16 percent from the current deficit. The Cabinet's unanimous vote constituted a victory for Hariri who came up with the austerity budget after ministers last week voted down his plan to raise nearly $1 billion for emergency development projects. The cabinet rejected the plan because it included an unpopular increase of up to 50 percent in gasoline prices.

Hariri, who spearheads the multi-billion dollar project to reconstruct Lebanon from the ruins of the 1975-90 civil war, had said the extra money was needed to fund programs for rural development, rehabilitate people displaced by the war and pay debts owed to private hospitals providing public health care.

Last week's Cabinet vote against Hariri's scheme was considered a major setback in the prime minister's career, as he usually gets his way with ministers. His defeat led to wide-scale speculation that he would resign. Hariri, however, said he was determined to stay on and "continue work in a positive manner."

The session was preceded by contacts between Prime Minister Rafik Hariri, President Elias Hrawi, and speaker Nabih Berri. Hariri's call to Berri is the first since the cabinet's refusal to increase petrol prices, more than a week ago. Berri told reporters today that the present budget draft was reasonable and that his relationship with the prime minister was "good." Hariri jokingly said after the cabinet's session that southerners do not fight with each other. A meeting between the two leaders is expected next week, after Hariri's return from Paris, where he's spending the weekend with his family.

Minister of the Displaced Walid Joumblat, meanwhile, donated the 10 billion L.L. allocated for his ministry to the budget, affirming that it was not enough anyway. Joumblat did not attend yesterday's meeting.

The new budget bill promises improved ways to collect taxes and imposes additional duties on services such as car registration passports and residence permits for expatriate labor. The bill will be debated in parliament next week.

Previous Stories:
  No final decisions yet on Budget   (10/3/1997)
  A peaceful meeting yesterday   (10/1/1997)
  The meeting of the finance and budget committee   (9/30/1997)

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