Delay in gov’t formation hinders Lebanese economy..analysts
BEIRUT, July 3 (Xinhua) — Lebanon must speed up the formation of a new government in order to start the needed reforms to save the country’s economy, local analysts said.
“The formation of a new government would send a signal to the international community that authorities in Lebanon are serious and eager to start structural reforms and benefit from international support,” Nassib Ghobril, chief economist and head of the Economic Research and Analysis Department at Byblos Bank, told Xinhua.
Lebanon succeeded in holding the first parliamentary elections in nine years in early May, but it still faces numerous hurdles to the cabinet formation.
If Lebanon wants to benefit from the pledged at CEDRE, an international conference in support of Lebanese development and reforms held in Paris on April 6, a new government must be formed at the soonest to start reforms required by the conference, Ghobril noted.
Lebanon secured more than 11 billion U.S. dollars in soft loans and grants from international donors at CEDRE to revamp its ailing infrastructure and bolster its economy.
Ghazi Wazne, a Lebanese independent economist, agreed with Ghobril’s comments, saying a new reform-oriented government is needed because the economic situation is very bad.
“A new government must be formed as soon as possible to start the needed reforms such as preparing the 2019 draft budget, carrying out reforms in the electricity sector and working on improving economic growth,” he said.
Wazne believed the delay in the formation of the government is sending a negative message to both investors and tourists.
“The unstable political and economic situation is affecting the arrival of tourists to Lebanon in addition to consumption by expatriates,” the Lebanese economist noted.
For instance, tourism in Lebanon has suffered from the lack of Gulf tourists in the past few years.
Pierre Ashkar, head of the hotels owners syndicate, said Gulf tourists may only return if the new government is formed.
“Gulf authorities will assess the situation following the formation of the government to decide whether to allow their nationals to visit Lebanon again,” he told Xinhua.
Jassem Ajaka, another independent economist, warned that the delay in the formation of the government until the end of September means a 0.25-percent drop in the GDP, which is equivalent to 125 million dollars.
According to the International Monetary Fund, Lebanon’s economic growth remains low, estimated at about 1 percent to 1.5 percent in 2018.