BEIRUT: Lebanon’s political leaders declared what they called an economic state of emergency Monday following a meeting aimed at finding a solution to the country’s economic crisis, raising concerns that more taxes will be imposed.
Lebanon has one of the world’s highest public debts in the world, standing at 150 percent of gross domestic product. Growth has plummeted and budget deficit reached 11 percent of GDP as economic activities slowed and remittances from Lebanese living abroad shrank.
The government hopes to bring down the budget deficit to 7.6 percent of the GDP this year and to 6.5 percent in 2020.
The meeting at the presidential palace discussed measures to be taken in the near future and as part of the 2020 draft budget.
Prime Minister Saad Hariri told reporters after the meeting that the leaders have agreed on “declaring an economic state of emergency” and the formation of a committee that will follow on the situation.
Hariri added that employment in the public sector will be frozen and work will begin for a new retirement system. He said officials will work on reducing the percentage of the debt through partnership between the public and private sectors.
President Michel Aoun said in a speech at the opening of the one-day session that everyone should make “sacrifices” in order to get one of the world’s most indebted countries out of its problems.
“We have to unite our efforts to come out with solutions to the economic crisis that is strangling the dreams and hopes of our people,” Aoun said.
No official details about the expected measures have been made public but economists who took part in preparatory talks for Monday’s meeting said they included raising tax on gasoline, boosting the value added tax from 11 percent to 15 percent on luxury items, as well as fighting tax evasion.
The meeting came 10 days after international ratings agency Fitch downgraded Lebanon’s ratings and as tensions on the border with Israel increased in recent days. Hezbollah on Sunday fired a barrage of anti-tank missiles in retaliation for an airstrike that targeted the group in Syria and an alleged Israeli drone attack south of Beirut late last month.
The recent developments have led for the first time in years for the US dollar to reach 1,560 Lebanese pounds on the black market, compared with the 1,500 that has been fixed since 1997.
Hariri vowed that the peg of the Lebanese pound to the American currency will remain in place.
Corruption-plagued Lebanon suffers from one of the world’s highest debt ratios, high unemployment and little growth.
In July, Lebanon’s parliament ratified a controversial austerity budget that aims to save the indebted economy.
Last month, Standard & Poor’s Global Ratings maintained its long- and short-term foreign and local currency sovereign credit ratings, saying the country’s outlook remains negative. The agency is scheduled to issue new ratings within six months.
Hariri said Lebanon has a period of six months to act and it is better “that we not become like states that collapsed.”
In January, Moody’s downgraded Lebanon’s issuer ratings to Caa1 from B3 while changing the outlook to stable from negative.

ALGIERS: Algeria’s powerful army chief says that the date of the nation’s long-delayed presidential election should be announced on Sept. 15 to quickly pull the nation out of political limbo.
By law, elections come 90 days after an announcement, which would mean a December vote.
The official APS news agency quoted Ahmed Gaid Salah as saying on Monday that an independent body “for the preparation, organization and surveillance of the election” should be quickly installed.
The country has been without an elected leader since longtime President Abdelaziz Bouteflika was forced out in April, in part by a grassroots revolt that still holds weekly protests. Many in the vast protest movement seek a transition period toward democracy rather than a quick election, and worry over Gaid Salah’s growing role as behind-the-scenes powerbroker.

BAGHDAD: The United Nations on Monday criticized Iraqi authorities for transferring around 1,600 people from camps to their areas of origin, saying the returns could put them in danger.
The returnees, who fled violence during and after the Daesh group’s 2014 seizure of swathes of Iraq, had sought refuge at displacement camps in the northern province of Nineweh.
Since August 23, Iraqi authorities have bussed about 300 families, an estimated 1,600 people, from the three camps to their provinces of origin.
The transfers took place despite humanitarian groups’ concerns that the families had no homes or access to services and may be targeted by their home communities for perceived links to Daesh.
The UN said Monday returnees had “expressed fears that they would be threatened upon their return, and had reportedly received threatening phone calls from community members in their areas of origin warning against return.”
“Despite such concerns, security actors confiscated the (displaced people’s) civil identification, informing the families that their documents would only be returned once they boarded the convoy,” it said in a statement.
More than 1.6 million people remain displaced in camps, unfinished structures or rented apartments across Iraq, nearly two years after the country declared victory over Daesh.
The government has stressed its policy is for all those displaced to return home and for camps to be shut.
Last week, AFP journalists witnessed transfers from the Hammam Al-Alil camp in Nineweh province of hundreds of Iraqis originally from Kirkuk, further south.
Women and children, some of them crying, were loaded onto buses by security forces. Some said they did not know where they were being taken.
The transfers often happened “with little notice or apparent planning,” the UN’s Iraq humanitarian coordinator, Marta Ruedas, said on Monday.
“I am concerned about the lack of organization and advanced communication with affected communities and humanitarian partners,” she said.
In some cases, the UN said, security forces denied families entry to camps in their home provinces, displacing them a second time.
In the worst case of violence against returnees so far, three hand grenades were thrown into the Basateen camp in Iraq’s Salahaddin governorate on Sunday, a day after the arrival of 150 displaced families from Nineweh.
“The grenades caused no damage, injuries or casualties (but) are a cause of great concern for the safety of the camp residents,” the UN said.
Other rights groups have already sounded the alarm, including Amnesty International, which has called the returns “premature” and urged Iraqi authorities to halt them immediately.
The Norwegian Refugee Council (NRC) called on the government to double down on reconciliation efforts to heal lingering resentment from the fight against Daesh.

MOSCOW: Russia’s Foreign Ministry says that its ambassador to Egypt has died. He was 68.
The ministry said Sergei Kirpichenko died suddenly Monday morning in a hospital in the Egyptian capital, Cairo. It did not name the cause of death.
A career diplomat, Kirpichenko was Russia’s ambassador in Egypt since 2011 and also served as Russia’s envoy to the Arab League, which is based in Cairo. He was previously posted in the United Arab Emirates, Libya and Syria.
The flag over the Russian Embassy in Cairo is flying at half-staff in Kirpichenko’s memory.

DAMASCUS: The Syrian government on Monday hailed Hezbollah’s strike the previous day on an Israeli military vehicle.
Hezbollah said it had fired anti-tank missiles into northern Israel on Sunday, destroying a military vehicle.
Israel’s army said it responded with around 100 artillery shells after Hezbollah fired two or three anti-tank missiles at a battalion headquarters and military ambulance, hitting both.
On Monday, the Syrian government threw its support behind Hezbollah, whose fighters have since 2013 been fighting on President Bashar Assad’s side in Syria’s civil war.
“The Syrian Arab Republic expresses its pride at the… operation that the Lebanese national resistance carried out against the military patrol of the Zionist occupier,” a source at the ministry of foreign affairs told state news agency SANA.
“Syria repeats that it stands fully by the Lebanese national resistance and its legitimate right — side by side with the Lebanese army — to work toward preserving the sovereignty of Lebanon,” the source said.
Sunday’s exchange of fire over the Lebanese-Israeli border comes one week after Hezbollah accused Israel of carrying out a drone attack on its southern Beirut stronghold.
On August 24, Israel also said it had carried out strikes in Syria to avert an Iranian drone attack on the Jewish state. Hezbollah said those strikes killed two of its members.
Israel has carried hundreds of strikes in war-torn Syria, mostly against what it says are Iranian or Hezbollah targets.