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With all the seminars, speeches and articles on privatization and its role in reviving the economy, one can argue that Lebanon is already “privatized” by taking a look at the workings of the parliament, government and definitely the pubic utilities sector.

The fuel market, for example, is controlled by a handful of companies (refer to Ii Monthly Issue 0 for details), the mobile phone sector by two companies, while Electricite du Liban is run by concessions in Jbeil, Aley and Zahle, in addition to more than 30% of the Lebanese public who refuse to pay their electric bills. Private health and education institutions are not only free to charge what they like, but are also supported by the public sector through tuition and health allowances to employees to the tune of $550 million annually. Government donations through the Ministry of Social Affairs can also be considered “privatized” since they are restricted to confessional and politically linked NGOs which receive more than $50 million annually.

As for the cellular operations dilemma, two companies monopolized the mobile phone sector through a non-transparent contract approved by the same interests that had this contract cancelled when it began to benefit the state. Those interests are now insisting on a course that is mostly beneficial to them - a 20-year lease. We cancelled the contracts not to “privatize” the sector, since it was already privatized, but to liquidate it. Yes, Lebanon is pursuing a course of liquidation and not privatization.

There seems to be a consensus by the ‘international community,’ the Lebanese government and the majority of the parliament on privatization. Those opposed to this path have approached the subject from an ideological perspective, stressing the role of the state in achieving social justice and preventing the control of public resources from being in the hands of a few.

But the issue is not about numbers, efficiency or ideology. It is about public morality. Can the country embark on a privatization course with the politicians having vested interests in it?

It is time that politicians abide by the Illicit Wealth Law and liquidate their INTERESTS in public utilities, instead of liquidating THEM. Only then can we debate the merits and plan the phases of efficient and fair privatization. The World Bank and the IMF would do well to give this advice to Lebanon’s decision makers.

Jawad Adra

 



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