Monday, June 27, 2005

Looking Always At The Bright Side Of Lebanon

We think it's the end of the world; a setback almost because Berri is back to head the Parliament. Yes, our blog was one of the first on this blogosphere to broach the issue of the constitutionality of the Parliament Speaker's mandate and Berri's role in Parliament and the dire need for a change. But, I will not let his return, due to power balances and strategic circumstances beyond our control, bring me down.

I'll tell you why. I got amazing news yesterday that the Civil Service has approved several new government positions entitled "NGO Liaisons"! Do you know what this means? It means that our government for the first time recognizes the existence of civil society and the need to work with them in order to achieve its intended goals.

Has this piece of news struck you yet?!

Two years ago, I interned at a certain Ministry, and at that time USAID, the World Bank, the EU and other multinational and foreign entities were offering the Lebanese government small grants to achieve high-impact, short-term goals; the twist to these grants was that the government needed to partner up with a local NGO in order to secure the funding. Government agencies then were scrambling for grant writers to prepare their grant proposals. But not only were they looking for grant writers; they were also looking for people who might have connections to certain NGOs that might be willing to parnter up to implement the grants.

The process was difficult and chosing NGOs to forge partnerships with was very ad hoc. Any talk at that time of employing civil servants as NGO liaisons was indeed alien.

I recall suspecting that our public administration will be eventually conceding to a worldwide trend which is namely recognizing the presence of civil society (as opposed to just the private sector) and the need to partner up with its diverse organizations to achieve essential goals, such as awareness, the provision of public and educational materials, outreach, among many other services.

Fast forward two years: It is happening! The new government (which will be sworn in in ten days) will be signing off on those new positions. Now, government agencies will be looking for employees with knowledge and background in nonprofit management, including contract management and grant writing.

For me at least, this news was cause for celebration! This piece of news is intended for those who are pessimistic about our country. Don't be! I myself long for returning now. Our public institutions are finally able to react to international and Lebanese social trends. Finally what I have studied in a class, I can see being achieved in reality!

I am an optimist by nature, but not a foolish optimist. I can point out the silver linings in the midst of darkness. It pays off sometimes to dig deeper and to see that there are still a few good men and women in our public agencies who believe in the public good. Thank you for staying there and fighting the fight. We will be coming soon to join your forces!

"Nobody knows how many rebellions, besides political rebellions, ferment in the masses of life which people earth."


Anonymous said...

Oh for god's sake- and lebanon's most hated individual as prime minister?! the TAXMAN!?!?!?!?!!!!!!!!!!!!!!!!!!!!!!

Raja said...

most hated? if only other bureaucratic entities were made to function as well as the finance ministry, most of Lebanon's problems would be solved.

if only Lebanese paid their taxes as they should, a lot more problems would be solved.

popular perceptions are one thing and reality is an altogether different matter

Anonymous said...

running a good bureaucracy is one thing, running a good economy is another. sanyoura's "indirect taxes" legacy has crippled the poorest and exonerated the richest. come on, popular perception is a million times more effective (as in has an effect on everyday life) than what you call "reality".

Doha said...

anonymous 12:52pm:

I have saved an article, I believe a Daily Star article, a couple of months back (before Hariri's assassination) that actually stated that the VAT has brought in substantial revenues for the state. Of course, it was difficult and challenging and unpopular moving to that system. Even the US hasn't imposed a VAT, which they are toying around with the idea, in fact. We're ahead of the ball curve.

But my post was not about siniora!

JoseyWales said...

Ok Doha, lets assume they raised more revenue. For what? Who got it? or what was it spent on?

Also did it help the economy? Just raising revenue is not an end by itself of course.

Also, The US is in better shape than Europe economically, we should try to emulate the former, if anyone.

Doha said...

"Lebanon's value-added tax (VAT) has become the main source of income for the government, which is desperately struggling to reduce the budget deficit.
According to a report by the Finance Ministry released last week, revenues from VAT in the first nine months of 2004 represented 26.3 percent of total budget income. Revenues from VAT rose to LL1.241 trillion ($827 million) in the third quarter of this year, an increase of 30.29 percent compared to 2003. The 10 percent VAT was introduced in Lebanon in late 2002 and since then consumer tax became one of the main source of government income. Before the introduction of VAT, Lebanon depended on revenues from customs duties to reduce a large percentage of the budget deficit." (Daily Star, Dec 15, 2004)

I attended a briefing at the Brookings Institution here in DC last December where the domestic policy agenda of the second Bush term was discussed. Interestingly, U.S. economists from the right and the left are advocating for introducing the Value Added Tax into the American tax structure. As the U.S. economy incurs a larger and larger budget deficit, economists are pushing for such a move in order to better service their debt and create a new revenue source.

So...Lebanon is ahead of the ball game in terms of introducing the VAT. The VAT, apparently is a European-style tax according to American economists. And as we see, the VAT is bringing in substantial revenues to the Lebanese treasurey, however, our burdensome debt of more than $35 billion can overshadow any successful tax policy move...

I hope this info helps. But all in all, I have no idea how this Anonymous person just took the discussion towards Siniora. I was talking about our government's recognition of civil society and how this recognition was given more than just lip-service and was indeed institutionalized into our civil service.

Please, let comments revolve around the post contents. Moreover, I only see pessimism, and more criticisms, and nothing constructive...we need to believe in our country more.

Anonymous said...

hi doha, thanks for the article, but i raised sanyoura in response to the optimism you were calling for. not to put you down in any way, but because i was myself (although a fellow optimist by nature) shocked by the idea of sanyoura running the show at a time the lebanese needed a fresh face to lead them. granted, we dont need too fresh because we need some experience, particularly in face of lahoud and berri. berri will now be running the legislative for a total 17 years!!!! if that's not a dictatorship, what is?! so we are getting sanyoura who is obviously a very tough bureaucrat, but definetely not a leader figure. Sanyoura is an old guard who has, under rafik hariri, made every person in the street curse the day the hariri government was born- and with berri back and lahoud not going anywhere soon, i find it hard to look on the bright side, there is nothing NEW in this presentation to the people...

I come from the belief that perception is more "real" than reality, and that because of the individualistic characteristics of the lebanese people - as extremely resourceful entities lead by an egotistical need to achieve more (not for the common good, but for their own individual good, which is fine as long as it leads to an emergent social good), a "perception of change" is more effective in giving the society the dynamic it needs to pull itself out of its misery.

i don't want to put you or anyone else down, but patronising (albeit beautiful) lectures in optimism don't help if people on the ground (the average citizen, not the blogospherizens) feel otherwise.

again, sorry to have gotten these comments off-topic, but obviously no one else was even inspired to comment on the "yippee there's a new NGO office in parliament" issue of the post itself. (even though i do see your point and i do personally believe the NGOs would and should play a crucial role in the needed systemic changes).

that anonymous person.

Doha said...

Anonymous, it's definitely interesting to write some posts that are upbeat and some that are critical, because a blog at the end of the day is a personal account. If my post only lead you towards thinking about more and more negative aspects of our system, then perhaps I failed to convey an upbeat message to you. However, I myself am still upbeat about this piece of news, something good in the midst of a lot of uncertainty and little change (but at least some change, which we cannot discount).

JoseyWales said...

Ok, I'll ask again,

What is being done with the money? Other than financing a bloated and inefficient (and in the case of intelligence, dangerous) public sector?

The tax payer is paying for jobs to make Berri, Lahoud's, Hariri's and others' people happy. In most cases incompetent and corrupt people.

Seniora's VAT, seems to me, was just an answer to "we need more money to finance the deficit" and get Paris-whatever going. Correct me if I am wrong, but it was not part of any re-thinking of taxes or the economy at large.

Mustapha said...

To me, the very fact that our political discussions are turning into nitty-gritty number-crunching is a sign of good health.

This is why i'm signing up for Doha's optimism

Doha said...


Thank you for signing up!


I swear, I wasn't the one who brought up the whole Siniora issue. And I'm not a staunch advocate of VAT, perhaps because I'm not a tax expert.

I was like many, while a student at AUB, complaining about another burdensome tax liability, the VAT. And I was one of those who wanted to rant for the heck of ranting and used to call Siniora names. But then I read the Daily Star article about how the VAT was beginning to work. And I also learned that we have implemented a tax structure that even US experts claim that their country is in need of such a structure to better finance their burgeoning debt.

I don't claim to have the answers to your questions, but I can say that moving towards impelementing the VAT was perhaps a recommendation from the EU and the IMF to finance our debt and also because it's a rather innovative taxing system (knowing that our tax systems in Lebanon are obsolete). Granted, it was an unpopular move because it was implemented at the wrong time, but its positive effects are just kicking in.

I'll do more research and get answers, but I believe it's OUR job to do that research, not just me. This is if we care about our country.

Doha said...

To everyone,

The Ministry I pointed out in my original post was the Ministry of Economy and Trade. I wasn't the one who started talking about the Ministry of Finance, in fact it was Raja in response to the Anonymous's comment on Siniora. Just for clarification. Both Ministries, however, have been doing great compared to other ministries.

Raja said...

doha, no research is needed. Josey Wales simply doesn't like VAT, and whatever you write will not convince him.

The fact of the matter is that VAT is simple, and very difficult to evade. Everyone is taxed equally and collection is done at business enterprises that meet certain specifications and keep receipts and records of transactions (hence making tax evasion much more difficult than say personal taxes). Therefore its simplicity and effectiveness make it a very popular tool, at least among governments. Moreover, all this hubbub about VAT making life for the desperately poor even more miserable is nonsense, since both basic necessities such as food and certain medicine are not taxed, and business entities which are small mom & pop shops are not taxed either.

But Josey doesn't care about that. He’s saying that we should look at where the money is going, not how it is being collected.

Well, my response to Josey is this: "no taxation without representation." In other words, when people are taxed effectively they will begin to seriously question (and care) where their money is going. Furthermore, how can the state function effectively without any resources? Borrow more?

Josey, Doha pointed out how state institutions are beginning to take small (but sure) steps towards getting their act together. True she pointed to one ministry, whereas the entire government bureaucracy is basically screwed. But by posting that, she did, at least partially, address your concern: one ministry (an extremely important one, mind you) trying its best to use tax-payer liras more effectively.

Now shouldn't you at least acknowledge that improvement (as well as the efforts of those who made it happen), rather than bash every bit of good news that comes out of Lebanon?

JoseyWales said...

Doha, Raja, Mustapha:

I don't want discuss the technical details of the VAT, which may or may not be a good thing in Lebanon.

Raja, of course the state needs revenues, but it can tax the economy 10% and it can tax it 50%. Also do not forget that corruption acts like a tax too. And people need to know, or be told, what the money is doing for them to feel responsible an involved.

I disagree when Steve says it's a good sign we are discussing details. We cannot shove things under the rug, that is always a recipe for disaster.

Security is the number one issue, and like it or not it is tied to: arms, palestinians, syria, Lahoud, Hezballah, etc...

It is a mistake, and bound to disappoint you and others to pretend that fixing a tax here, and getting a competent bureaucrat there will solve things.

Don't get me wrong, these things may need to be done , but they will remain very marginal and subject big setbacks if we do not address the BIGGER issues.

The Palestinian armed presence issue was ignored in the 60s, civil war ensued.

The Syrian relation issue was avoided in the 70-80s, a devatating occupation lasted 30 years.

Now, shhh again, lets talk taxes not security. The UN investigators will not provide security by themselvse. 2 (or 3?) people got killed just from "joy" after Berri's election, HA and Israel are shelling each other again in the south today.

Just as Paris XVI or money from the IMF or Saudi will not solve our economic problems in the long run. You just need a sound economic environment.

You can have a Nobel economist in every government job in Lebanon, and no good will come of it, as long as the environment is NOT SAFE (first physically=security, then legally=corruption, and then fiscally=taxes).

So I guess we disagree a bit on the order of priorities. Of the pols, as usual, will find it easier to avoid the big issues.

PS. Raja, you guessed right, I am a small-governmnet guy. But please don't put words in my mouth. I'll look at the VAT and consider it, I do not know enough about it now. But to defend it because the Europeans have one is meaningless to me.