With Lebanon slipping towards what looks increasingly like a civil war, its rulers met in Paris on 25 January 2007 to negotiate more loans to pay off part of the country’s enormous debt – and sell off its electricity, water, telephone and air transport sectors.
At the Paris III conference, hosted by Jacques Chirac to collect aid for Lebanon and support its governing coalition, prime minister Fuad Siniora secured more than $7.6 billion towards government expenditure, social programmes and the reconstruction of infrastructure destroyed by last summer’s Israeli attacks. Saudi Arabia, the US, the Arab Monetary Fund and the EU were among the leading donors.
A poisoned chalice
But there is no such thing as a free lunch, and the bill for this new ‘aid’ package might end up being paid by the Lebanese population, as a closer look at Lebanon’s finances reveals.
Lebanon was virtually debt-free until the end of the civil war in 1990. By 1998, however, after six years of Sunni rule under the Hariri government and ambitious borrow-and-build schemes that made the World Bank proud (and allegedly filled the pockets of the Hariri family), Lebanon found itself owing $17 billion. It was using 89 per cent of government revenues to service the interest.
Today, that figure has reached $41 billion and accounts for 188 per cent of GDP – the world’s second highest proportion of debtto- GDP (after Malawi). The current prime minister can hardly be absolved of this: he served as Lebanon’s finance minister from 1992 to 1998, and again from 2000 to 2004.
Under these circumstances, it is hard to see how more borrowing (most of the ‘donations’ are actually loans) can be a solution to anything. Studies have shown that Lebanon’s primary deficit, the difference between public expenditure and public revenue, is very low. This points to the fact that the debt service payments are the major cause of the country’s further indebtedness.
As usual, the ‘aid’ money not only comes with high interest rates but with a demand for ‘structural reform’. The IMF and other donors claim that public expenditure and constraints upon the market are the problem. So, on 2 January, a few weeks before the donor conference, the Lebanese government presented an ‘ambitious’ five-year plan ‘‘to impress the Paris III donors’’. The plan promises social and financial reforms, the privatisation of the telephone and electricity sectors, water and sewage systems, air transport and a 2 per cent VAT hike.
According to the IMF, the revenues from privatisation ‘could bring down the debt ratio to under 150 per cent in 2011’. But the Fund acknowledges that this would still be a ‘dangerously high’ ratio, meaning that the current reforms will ‘not be enough to steer the country on a safe path toward debt sustainability’ – in other words, more ‘reforms’ will be necessary in future.
The IMF and international donors are urging Lebanon to borrow more money and sell its public services in order to pay off part of the country’s debt, but at the same time acknowledge that the current plans would not offer any significant economic improvement.
So, as the Lebanese trade unions have pointed out, the majority of the population will be worse off after the increase in indirect taxation and inevitable lay-offs in the privatised industries, and the state will lose the stable revenue provided by some of its best publicly-owned companies.
The government plan approved by the IMF is based on a series of flawed and irresponsible assumptions. These include the expectation of a return to economic growth of 4-5 per cent in 2007 on the back of a predicted tourist sector boom.
This is little more than wishful thinking and shows a dangerous lack of realism. The Paris conference was held only days after a general strike that saw the first military curfew since 1996, and violent clashes in the streets of Lebanon that resulted in several people dead.
Paving the way to civil war
It is unclear how a government as delegitimised as Siniora’s will be able to implement any of the promised reforms or social programmes. So far, the 29-page ‘reform’ proposal has only served to encourage more workers and trade unionists to join the opposition movement.
In early January 2007, Lebanon’s 200,000-strong Federation of Labour Unions (CGTL) called on its members and the general population to take to the streets.
In doing so, it declared that that ‘all successive governments since 1992 have contributed to the economic deterioration’ and that ‘those who were responsible for the economic plight in the country do not deserve to solve the problems of the Lebanese’.
On 23 January, just two days before the Paris Conference, the CGTL called a general strike that was backed by the rest of the opposition groups, whose supporters have been camping out in front of Siniora’s government offices in central Beirut since the beginning of December.
In this context, it looks like the IMF and donors’ recipes do nothing but pour oil on the fire of an already explosive Lebanon.
With friends like these, the Siniora government’s days are numbered.
Let’s just hope it does not take the whole country with it.
Hilary Wainwright argues against reclaiming populism for the left and for a leadership that supports people’s capacity for self-government
It may seem as though these apps are working for us, but we are also working for the apps, writes Kurt Iveson
It's over 100 years ago that domestic workers began to organise to demand the same rights as other workers. Yet with LSE cleaners on strike this week, historian Laura Schwartz asks: how much has really changed?
Omar Barghouti asks whether Donald Trump, in his recent break with America’s long-standing support for the two-state solution, has unwittingly revived the debate about the plausibility, indeed the necessity, of a single, democratic state in historic Palestine?
Glenn Greenwald was interviewed by Amandla Thomas-Johnson over the phone from Brazil. Here is what he had to say on the War on Terror, Trump, and the 'special relationship'
In 1972 David Widgery wrote about the bitter intensity of love in capitalism
Andrew Dolan on how the left must match the anti-establishment rhetoric of the right, but with a different politics
Emma Snaith speaks with directors Emer Mary Morris and Nina Scott about the power of theatre to encourage community resistance to estate demolitions.
In the first of a series of interviews with migrants' rights and racial justice activists from the US, Marienna Pope-Weidemann speaks to Peter Pedemonti, co-founder and director of the New Sanctuary Movement in Philadelphia
Photos from The World Transformed festival in Liverpool, by David Walters
Red Pepper’s race section: open editorial meeting 19 April
On April 19th, we’ll be holding the second of Red Pepper’s Race Section Open Editorial Meetings.
Changing our attitude to Climate Change
Paul Allen of the Centre for Alternative Technology spells out what we need to do to break through the inaction over climate change
Introducing Trump’s Inner Circle
Donald Trump’s key allies are as alarming as the man himself
Secrets and spies of Scotland Yard
A new Espionage Act threatens whistleblowers and journalists, writes Sarah Kavanagh
#AndABlackWomanAtThat – part II: a discussion of power and privilege
In the second article of a three-part series, Sheri Carr reflects on the silencing of black women and the flaws in safe spaces
How progressive is the ‘progressive alliance’?
We need an anti-austerity alliance, not a vaguely progressive alliance, argues Michael Calderbank
The YPJ: Fighting Isis on the frontline
Rahila Gupta talks to Kimmie Taylor about life on the frontline in Rojava
Joint statement on George Osborne’s appointment to the Evening Standard
'We have come together to denounce this brazen conflict of interest and to champion the growing need for independent, truthful and representative media'
Paul O’Connell and Michael Calderbank consider the conditions that led to the Brexit vote, and how the left in Britain should respond
On the right side of history: an interview with Mijente
Marienna Pope-Weidemann speaks to Reyna Wences, co-founder of Mijente, a radical Latinx and Chincanx organising network
Disrupting the City of London Corporation elections
The City of London Corporation is one of the most secretive and least understood institutions in the world, writes Luke Walter
#AndABlackWomanAtThat: a discussion of power and privilege
In the first article of a three-part series, Sheri Carr reflects on the oppression of her early life and how we must fight it, even in our own movement
Corbyn understands the needs of our communities
Ian Hodson reflects on the Copeland by-election and explains why Corbyn has the full support of The Bakers Food and Allied Workers Union
Red Pepper’s race section: open editorial meeting 15 March
On 15 March, we’ll be holding the first of Red Pepper’s Race Section open editorial meetings.
Social Workers Without Borders
Jenny Nelson speaks to Lauren Wroe about a group combining activism and social work with refugees
Growing up married
Laura Nicholson interviews Dr Eylem Atakav about her new film, Growing Up Married, which tells the stories of Turkey’s child brides
The Migrant Connections Festival: solidarity needs meaningful relationships
On March 4 & 5 Bethnal Green will host a migrant-led festival fostering community and solidarity for people of all backgrounds, writes Sohail Jannesari
Reclaiming Holloway Homes
The government is closing old, inner-city jails. Rebecca Roberts looks at what happens next
Intensification of state violence in the Kurdish provinces of Turkey
Oppression increases in the run up to Turkey’s constitutional referendum, writes Mehmet Ugur from Academics for Peace
Pass the domestic violence bill
Emma Snaith reports on the significance of the new anti-domestic violence bill
Report from the second Citizen’s Assembly of Podemos
Sol Trumbo Vila says the mandate from the Podemos Assembly is to go forwards in unity and with humility
Protect our public lands
Last summer Indigenous people travelled thousands of miles around the USA to tell their stories and build a movement. Julie Maldonado reports
From the frontlines
Red Pepper’s new race editor, Ashish Ghadiali, introduces a new space for black and minority progressive voices
How can we make the left sexy?
Jenny Nelson reports on a session at The World Transformed
In pictures: designing for change
Sana Iqbal, the designer behind the identity of The World Transformed festival and the accompanying cover of Red Pepper, talks about the importance of good design
Angry about the #MuslimBan? Here are 5 things to do
As well as protesting against Trump we have a lot of work to get on with here in the UK. Here's a list started by Platform
Who owns our land?
Guy Shrubsole gives some tips for finding out
Don’t delay – ditch coal
Take action this month with the Coal Action Network. By Anne Harris
Utopia: Work less play more
A shorter working week would benefit everyone, writes Madeleine Ellis-Petersen
Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant