Lebanon

International conference on Lebanon's reconstruction: Lebanon's reform programme

Format
News and Press Release
Source
Posted
Originally published
The reform programme was adopted by the Lebanese Council of Ministers on 4 January 2007.

The reform programme will be gradually implemented over the period 2007-2011. Its objectives are to

  • boost the economy by improving the business environment and supporting the productive fabric;

  • improve living conditions for all Lebanese;

  • return to overall financial equilibrium (cut Lebanon's debt from 180% of GDP in 2006 to 144% in 2011).
The programme is based on the following macroeconomic parameters:
  • a growth rate of -5% in 2006, rising as from 2007 to roughly 4% to 5%, returning to the trend line observed before last summer's fighting;

  • an inflation rate of 7.5% in 2006, stabilising later to between 2% and 2.5%.
The five-year reform programme comprises four main pillars:

1. Social: specific action in favour of vulnerable groups, extension of social security benefits, action in the fields of education and health, etc.

2. Structural: reform of public administration, improvement of the legal environment for business, reform of the financial sector and debt management, enhanced funding for small firms, etc.

3. Budgetary:

  • Increased tax revenues: VAT to be raised from 2008 to 2010; gradual removal of the fuel tax ceiling; higher taxation of financial products; introduction of a unified income tax from 2008, etc.

  • Controlled expenditure: reduction in State expenses; restructuring of Electricité du Liban; fewer civil servants hired, etc.
4. Privatisation: disposition of mobile telephone service in 2007, and of Liban Telecom in 2008. Revenues from these privatisations will be allocated to repaying public debt.

The programme will be implemented in 2007-2011 with the financial and other support of the international community.