Lebanese CP - Monthly Political

Lebanese CP - Monthly Political Bulletin 11

Lebanese Communist Party

May 12, 2010

www.lcparty.org, mariedebs@dm.net.lb


This report deals with the main political and socio-economical regional and international developments, as well as developments of the internal Lebanese situation; in particular it addresses:

  • The international crisis in capitalism and its unfolding in the United States.

  • The main developments in Latin America and Africa.

  • General conditions in the European Union and the response and the struggle of the working class.

  • The Middle East in between the memorandum of Robert Gates and the Iranian Military Maneuvers.

  • The conditions in the Arab Region from Palestine to Iraq.

  • Lebanon under Israeli threats and insolent American intervention.

  • The socio economic crisis in Lebanon and the inability of the government to formulate a solution.

Firstly, regarding the international crisis in capitalism and its unfolding in the United States.

Despite the apparent optimism in the late 2009 report published by the UN, which predicted significant improvements in international growth rates, including 2.2% for the USA and 8.8% for China by the end of the third quarter of 2010; (and despite the emergence of some studies which see the USA emerging from the economic crisis which started unfolding as far as 2001); the indicators for economic recovery remain faint and temporary, since unemployment is still rising, and the number of bankrupt companies and banks are still rising (where until the end of last March 158000 American companies, each employing between 20 to 1000 workers, had filed for bankruptcy).  These developments are accompanied by a reluctance to open the doors for the creation of new jobs in the private sector, which makes the end of the current crisis very hard to predict.  Indeed while the dollar has witnessed some improvements lately, this on its own cannot be considered as a positive indicator; especially if we take into account the ongoing financial scandals, the last of which was the Goldman Sachs scandal with AIG (American International Group - the number one company for insurance and financial services).  It seems AIG is unable to recover from its crisis despite the fact that it had previously received federal funds in excess of 180 billion US dollars.  The implications of a possible collapse of AIG (with 74 million customer in 130 countries worldwide) can have implications and cause ripple effects in the form of further collapses and bankruptcies in both the US and worldwide.

In addition to the above difficulties, the USA is facing another severe contradiction between its attempts to maintain its hegemony on the rest of the world and to prolong the life of the Neoliberal system (despite its failure which is seen in economic losses estimated at hundreds of billions of dollars) on the one hand and the internal US socio-economic conditions on the other hand.  Indeed now 50 million Americans, constituting 16% of the American population, are living under the poverty line.  Approximately an equal number of Americans do not have any health insurance (this number has increased by 4 million in the last two years alone).  In other words, the USA can provide health insurance and can generate job opportunities, at least for a proportion of those unemployed and without health insurance, if it chooses to narrow its military stretch and presence worldwide ranging from bases through stations and fleets.

However the new American Administration, under Barack Obama, has not effectively diverted from the path adopted by Bush Jr. which is characterized by an expansion of aggression against the people of our world and also characterized by continuous ongoing efforts to build additional military bases, especially in the Asian continent.  These policies are based on the conviction that the military bases represent “the empire”; and therefore maintaining existing ones and building other additional bases is effectively what ensures the ascendancy of the empire, represented by its uni-polar American head, and the hegemony of the empire on the world to be able to continue to exert control over its natural resources and wealth.

This view was manifested during the recent nuclear security summit, and indeed is the dominant one in the ongoing discussions regarding the future role of the NATO alliance which is due to be elaborated in the forthcoming meeting in Portugal scheduled to take p[lace at the end of the year.

Secondly, main developments in Latin America and Africa

1. Latin America

The American offensive against some Latin American countries is gathering pace, especially after the Cancun summit in Mexico which agreed to strengthen the political, economic and cultural integration of Latin American countries, as a means of resisting ongoing American intervention and meddling in all its military, economic and political dimensions. 

The Latin American countries are currently preparing for the Caracas summit in Venezuela in 2011, by reforming public policies to address social issues, especially to reduce poverty and the associated instability (where it is estimated that there will be 9 million new poor people, according to the economic committee of the Latin American - Caribbean Region).  While the Latin American countries are undertaking these preparations; the US is attempting to carry out several political and military “changes” in various countries within the region in an effort to re-establish (or in some places strengthen) its control over the oil and gas and mineral resources and wealth, as well as exerting its control over the significant water finds in Brazil and neighboring countries (Argentine, Uruguay and Paraguay) which is estimated to be in excess of 45000 km3.

These “changes” can be summarized as follows:

  • Opening of a second military base, this time a naval-based one, on Honduras land, north to the “Gracios a Dios” region, under the pretext of combating illicit drug trafficking.  The US ambassador to Honduras states that the leadership of this base will be a joint one between the two countries.  Concurrently, Barack Obama has reneged on his demand for the return of president ZeLaya, and the assassinations and military presence and maneuvers in the north of the country have increased in an attempt to terrorize the organised peasants and stifle their demands in order to subjugate them under the new regime.

  • Ongoing negotiations with Brazil to establish a US military base near Rio De Janeiro, at a time when the US is increasing its intervention efforts to stifle the chances of the presidential candidate supported by President Lola from reaching office in the forthcoming November elections.

  • Ongoing conspiring and subversion attempts by the US against Cuba, in addition to the blockade against the island, which is ongoing as another demonstration of how Obama has reneged on yet another promise during his election campaign – namely to lift the blockade against this small yet formidable island that still stands out against the invaders….  In this context, it is stated that as many as 300 senators (including 52 democrats) have received in excess of 21 million US dollars, since 2004, in order to prevent the lifting of the blockade against Cuba.

2. Africa

While poverty, epidemics and corruption continue to spread in Africa, and while the food crisis is intensifying in an alerting manner, the African continent is being subjugated today, yet again, to a new wave and a new type of pillaging which started two years ago and intensified at the beginning of this year.

This pillaging is manifested by the appropriation of large areas of agriculture lands by various multinational companies (specifically American and Korean), through contracts estimated at millions of dollars.  This new policy has led, until now, to the expulsion of a large number of small farmers and also led to the intensification of the process of alienation and marginalization of the poor in a very apparent manner.  The devastating results of these policies can be seen in many places starting with Madagascar (where this policy started in 2008 and intensified last year and at the beginning of this year) and up to Mozambique.

In addition to the above, the political conditions are being aggravated in more than one country, with the intensification of civil wars in some countries and the spread of instability in other petroleum-producing countries (at the forefront of which is Nigeria).  All these events are unfolding against a background where the economy of the continent is becoming more and more marginalised, and the recession is spreading to most countries in the continent and the percentages of abject poverty and misery is increasing amongst the people of Africa.

Thirdly, regarding the general conditions in the European Union and the response and struggle of the working class

The conditions within the EU are characterized by a recession and an intensification of the crisis, due to the economic and financial policies of the EU which is straying in various directions; the most dangerous of which is the decision (adopted earlier this month) to involve the IMF as a party in the decision making process for financing of a way out of the crisis which Greece is experiencing.  A crisis which arose as a result of the policies adopted by the Social-democrat government which led, after controlling the collapse, to a continuation of borrowing through the floating of government bonds with a value of one and a half billion Euros and with interests rates in excess of 3.65% for a period of three months.

These dangerous policies, combined with the attempts by the government to place the burden of the crisis on the poor and the marginalised,  have led to nation-wide strikes which crippled the country especially on 21-22 April; when hundreds of thousands of demonstrators took to the streets and where factories, companies and ship yards where shut for business.  Even Piraeus Port was shut as a result of a decision taken by the progressive federation of unions (PAME) with support and guidance from the Greek Communist Party.

It should be recognised that the unfolding situation in Greece is not the only one within the EU; which raises the possibility of the IMF being put in charge in other countries such as Italy (where the popularity of the prime minister has decreased significantly), Portugal, Spain, Ireland and perhaps even France (which is witnessing large problems, including putting an end to unemployment benefit to more than one million unemployed persons by the end of March).

At the same time the Euro continues to lose value with respect to the Dollar, creating a significant flaw in the financial conditions for a number of EU countries; while unemployment is on the rise (both official and masked); and living conditions continue to worsen.  At the same time, the big banks are reeking in profits again, and providing “gifts” (in some cases reaching millions of dollars) to their top management.  And the military-industrial sector, including the arms dealers, is prospering as a result of a direct decision by the EU under the pretext of improving the economic conditions and maintaining jobs.

It is worthwhile pausing on this latter point, due to its implications on the Arab countries, and specifically Occupied Palestine: where the EU has decided to give the arms producers a direct central role in the “defensive military industry” field: despite the fact that such decision is in direct contravention to EU laws.

The most dangerous element of this law is perhaps the decision to give more prominence to the role of Israel (which is considered the largest non-European partner) in the “defensive” research programs of the EU.  In addition Israeli universities and companies [including Israeli companies which produce arms and technologies which has been used (and continue to be used) to kill Palestinian civilians in the West bank and Gaza] are participating in 12 out of 58 programs termed “security related research” which has been funded by the EU in the last few years.

Fourthly, regarding the Middle East in between the memorandum of Robert Gates and the Iranian Military Maneuvers

As regarding the situation in the Middle East, it continues to worsen and get more intertwined; where in addition to the exacerbating conditions in Pakistan and Afghanistan, the Iranian “dilemma” has constituted the main crisis in the last few weeks.  The US has not yet accepted its failure to try to take advantage of the popular Iranian gatherings and demonstrations.  Since these events were aimed at the regime, yet at the same time these events resisted foreign American intervention and conspiracies.  In this context it has to be recognised that Iranian interests occasionally overlapped with the American interests in Iraq, Afghanistan and Pakistan (contrary to what the US had originally hoped).  In addition the ongoing spread of Iranian influence in most Arabian Gulf countries has come to pose a threat to Washington which is not yet accepting any competition in this region sitting on large amounts of oil and gas reserves.

The latest “secret” memorandum of Robert Gates, US defense secretary, which refers to “critical alerting indicators” the first of which is the “absence of an effective American Strategy in case Iran continues its efforts to develop nuclear weapons” must be seen in this context.  Gates memo is merely an indication of the new American efforts for political escalation against Iran manifested by more severe sanctions and the threat of the possibility of resorting to military measures.

This leak was not the only one to take place in recent weeks.  On the 19th of April, the CNN network quoted sources within the administration that efforts are ongoing to develop plans to target military strikes against Iranian nuclear locations; so all options will be ready for the While House in case Obama decides to pursue such a course.  These leaks and indications are in line with the campaign led by the US and Israel regarding the possible breakout of fighting in Lebanon again under the pretext of the arrival of “Scud” missiles from Iran and Syria to Hezbollah in Lebanon.  In this context, one must note the position of Obama, manifested during the recent nuclear security summit, which focused solely on Iran as a uranium enriching country while complete ignoring the fact that Israel possesses nuclear weapons which pose a threat to the Middle East and the World at large.

In this context, the Iranian maneuvers, which took place in the third week in April, shows the criticality of the situation.  This is particularly true, if one takes into account, the Israeli interest in driving the situation in the region to escalation and war on more than one front.  This push for war is being done under several pretexts; the first of which is that Iran and the resistance in Lebanon have come to pose a threat to international peace and security and that Israel (and with it “the free world”) is under threat of being “wiped out of existence”.  And so, as the Israeli story goes, the free world must promptly deliver a devastating conclusive strike to all the forces that are putting obstacles against the Israeli plan for the region and the American plans which are represented by a further division of the countries in the region along sectarian and ethnic basis, and wiping out the forces of resistance, to exert full control over these countries and continue to pillage their natural resources.

Fifthly, the conditions in the Arab region from Palestine to Iraq

1. Occupied Palestine

In Palestine, where Israel is no longer satisfied with building illegal settlements and with worsening the lives of ordinary Palestinian Arabs to prevent them from returning to the towns, cities and villages – where the Palestinian residents of East Jerusalem are at the forefront of those suffering from these policies. Indeed the new plan (in view of the publicly declared American decision to support of the State of Israel and to consider Israel the “State of the Jews in the World”) is to implement the “ethnic purification” which was declared by the Netanyahu government few months ago.  This comes within the predesigned plan to begin the “transfer” (or rather the illegal forceful expulsion) of approximately 70 to 80 thousand Palestinians from the Occupied West Bank under the pretext that they are illegal infiltrators into the area without any Israeli permission.  This implies emptying the West Bank not only from some of the residents of Gaza but also from more than 50000 Palestinians who are holders of foreign nationalities or who are from Jerusalem but who work in Gaza.  This racist apartheid policy (which also relies on the destruction of some of the historic features of the city of Jerusalem in order to complete its “purification”) is accompanied by suspicious maneuvers by some European countries (with Germany at the lead) to withdraw the European citizenship from a large number of Palestinians carrying such citizenship; and is also accompanied by the statement by UNRWA (UN relief and works agency for Palestinian refugees) that it will withdraw the ID card for every Palestinian refugee who has obtained a second citizenship.

These Israeli measures, in addition to what has been declared by Germany and UNRWA, forms the basis for a new wave of forced expulsion of the Palestinian people, at a time when Israel continues to blockade the Gaza sector, continues to worsen living conditions in the Occupied West Bank, continues the illegal detention of 11000 Palestinian citizen (4000 of which have gone on strike few days ago in response to the physical and psychological barbaric torture campaigns which they are continuously being subjected to).

2. The Official Arab Regime

While the Arab masses are preparing to remind the world of the anniversary of the loss of Palestine; Israel is preventing the Palestinian people to commemorate this anniversary this year.  Simultaneously, the people of the world are mobilising to condemn Israeli treatment of the Palestinians and to reject the blockade against Gaza.  While these commendable preparations are taking place, we are witnessing the Palestinian authority reopening negotiations (albeit indirect) with the Netanyahu government – this government who refuses to go back on its decision to expand settlements but on the contrary threatens to forcefully expel thousands of Palestinians from their land.

As for the official Arab regime, it has not changed its position of complete subordination to the American will, whether regarding its response to the Israeli settlement policy (where the response was limited to a simple call for Israel to stop its practices) or whether making sure that no serious attempt is made to develop a comprehensive policy to resist this new “transfer” policy being pursued by Israel.  In addition, according to knowledgeable and well placed sources, some of the Arab regimes continue their secret communications to achieve full normalization of relationships with Israel, first economically and the politically.  The insolence of some of the Arab rulers has reached unprecedented stages where now some of them send congratulatory letters to the Israeli government in the anniversary of the loss of Palestine!

3. Iraq

Iraq remains without government, as a result of the emerging balances in the wake of the latest parliamentary elections.  For Washington remains unable, as a result of a lack of communication with Iran, to seal a deal between Maliki and Allawi.

Hence the worsening security situation is back to the forefront of events, and the explosions that kills tens of civilians are starting again, at a time when there is increased talk about a recounting of the votes and not only in Baghdad.  Some sources indicate that there is a possibility to change the coalition that was formed prior to the election between Saudi and Syria for support of Allawi to head the new government.

Against the background of this political stalemate which is accompanied with a worsening security situation; an increasing number of analysts confirm that the promise of Barack Obama, made in the wake of his election more than a year ago regarding withdrawing from Iraq in 2011, is merely political posturing and point-scoring with no substance.  This is particularly true since the latest statements by Obama regarding Iraq focuses on the following:

  • Decreasing the number of troops in central and south Iraq permits the deployment of additional troops in North Iraq as well as other places in the Middle East.

  • The redeployment of these troops can achieve three objectives simultaneously: 1. Securing the achievements in North Iraq (i.e. control over the area and over the Kurdish situation); 2. Alleviating mounting fears of Washington allies and confirming that Washington is staying to resist Iran (or to temper its maneuvers and ambitions); 3. Continuing deployment against Al Qaeda operations especially in view of the partial victories represented by the capture or killing of a variety of leaders from this organisation.

The above should be augmented with what has been stated in the American National Defense Strategy regarding Iraq (2008) especially regarding the need for Washington to expand the locations of its troop deployment in Asia and directly associating this deployment with the sources and transportation routes of oil and gas.  Against this background, we can safely conclude that the Americans plan to stay in Iraq (if they are able to) for long after 2011, and the security treaty with Iraq allows them to do so.

Sixthly, Lebanon under Israeli threats and insolent American intervention

In view of the above, and in view of the ongoing influence of regional factors which is negatively impacting on the internal Lebanese situation, Lebanon is witnessing a moment of extreme tension, particularly in relation to the threat of renewed Israeli aggression and escalation which have been aggravated by insolent American interventions.  In addition, the municipality elections will be held one year after the parliamentary elections; according to an unfair and unjust law since the government and the house of parliament has reneged on their promise to reform the municipality electoral law.  Therefore it is expected that these elections will cause another rift (both religious and sectarian) in more than one city and region within Lebanon.

1. Israeli Escalation

Notwithstanding the lustful desire of the Israeli authorities to avenge their humiliating defeat in 2006 (as a result of which they went ahead with the destruction of Lebanon) as a result of the heroic resistance of the Lebanese people; this new Israeli escalation also stems from the attempt of the US to pressurize Iran and coerce her to cooperate in Iraq and Afghanistan, in addition to the issue of Uranium enrichment.  This escalation manifests itself in the following forms:

  • Israeli military advancing inside Lebanese territory, along the Abbasiyeh border region.

  • The launch of light bombs above Lebanese lands.

  • The ongoing violation of the military Israeli military aircraft planes above Lebanese airspace.

However the main form of this escalation is the American-Israeli campaign which started two weeks ago under the pretext that Syria has provided Hezbollah with Scud missiles; in addition to Israeli military statements stating that Israeli is ready to bomb the transportation convoys moving these missiles!!

In addition to the political objectives referred to above, it is noteworthy that this campaign aims to shift focus and attention away from the Israeli spy networks which have been recently discovered and which continue to be discovered on Lebanese territories.  This campaign was launched from two locations; namely Britain and Kuwait, where the Sunday Times newspaper and the Kuwaiti Raii newspaper published mid last month news that Hezbollah has received the Scud missiles from Syria.  These news articles were accompanied by threats to both Lebanon and Syria to bomb them back to the “stone age”, through targeting energy stations, fuel depots, and strategic infrastructure.

It should also be noted that this campaign was accompanied, at the internal Lebanese front, with renewed talk about the weapons of the Lebanese resistance from some forces that remain “friendly” to Israel.  This issue was discussed in the latest national dialogue session (which contains exclusively leaders of main Lebanese sects and religions without any representation for nonsectarian forces) from two different perspectives:

  • The first stating that the decision for war and peace should be under the jurisdiction of the government (and the army); as an explanation to what happened in 2006.  In other words implying that Israeli aggression against Lebanon is the result of the presence of a Lebanese resistance.  This is a logic that our party views as defeatist. 

  • The second stating that Israeli aggression on Lebanon is not due to the arms of the Lebanese resistance; because this resistance was not organised in 1948 when Israel occupied 7 Lebanese villages in the south and later annexed them; neither was this resistance organised in 1967 when Israel targeted Lebanon again, and so on …

While the Israeli statements towards the end of May attempted to reduce the intensity of the tension by stating that Israel has no desire to attack Lebanon; the Israeli military maneuvers recently completed as well as the ongoing military preparations, together with the development at the political stage worldwide in general poses two very important questions.  Firstly, is the US preparing to open a new battlefront in the Middle East to alleviate its economic crisis?  And secondly, will the United States again attempt to start an Israeli aggression on Lebanon to reclaim the initiative which it had lost in Iraq and also to pressurize Syria and her allies to prevent her from going forward with its desires to create a three way economic alliance which includes Syria, Turkey and Iran?

2. The insolent American intervention

We pose these questions to show that American attempts to hide behind Israeli aggression against Lebanon and other Arab countries are now more apparent to most.  It is the American administration which directed Israel to invade Lebanon in 1982 and again in 2006. And it is the American administration which have always permitted and even encouraged Israel in its aggression against the Arab people and at their forefront the Palestinian people; and it is the American administration that supplies Israel with weapons.  And this American administration is now maneuvering both politically and through its security apparatus on Lebanese soil.

The statements of the US secretary of state Hillary Clinton regarding unconditional commitment for the security of Israel (and the threats which it launched against Syria and Iran regarding the consequences which can arise as a result of any shift in the balance of power available for Hezbollah); was accompanied by an infiltration of a high level American security team to the border area between Lebanon and Syria to survey the conditions there without any formal permission from the Lebanese government and even without its prior knowledge.  In addition the UN is under ongoing and continuous pressure so that the UN forces in the South of Lebanon continue to ignore Israeli violations to Lebanese land and airspace.  The UN is also under pressure to insist on the implementation of UN resolution 1559 specifically regarding disarming the Lebanese resistance and the delineation of the border with Syria (which is what was announced by the UN envoy).  While the blue line (which is the temporary border with Israel) remains the de facto border between Lebanon and Israel thereby effectively keeping Shebaa farms and the hills of Kfarchouba occupied and Israel continues to steel the water of the rivers in the south of Lebanon, in broad daylight and under the sight of the international community which always remains accommodating to American “higher commands and wishes”.

Finally, in addition to the above, the notable role of the previous American Ambassador to Lebanon and the current assistant to the Secretary of State, Geoffrey Feltman in the security agreement recently uncovered must be noted.  This agreement gave Washington the right to have access to all international telecommunications and calls to and from Lebanon.

3. Municipality Elections

These elections started on the first of May and will continue until the last Sunday of the month.  It is based, just as stated in our previous report, on a backward electoral law which is agreed upon by all the sectarian representative of the bourgeoisie, as a means to be able to continue to seal deals amongst themselves so that each can carve their share of Lebanon– just like what happened in the electoral elections.

Indeed the new political scene is witnessing some interesting electoral lists which, in some towns and villages, have combined representatives from Hezbollah, the national patriotic movement and the Lebanese forces….

Whereas the leftist, democratic forces, which include the communists, have focused their activities on the following:

  • Combine between resistance activities and between supporting the steadfastness of the people particularly through development plans, especially in the South.

  • The priority of having non-corrupt candidates.

  • The importance of developing an action plan in order to change the municipality election law so it becomes more democratic, particularly towards giving a bigger role for youth representation.

  • Activities for implementing decentralized administration and development.

4. The socio-economic crisis

This section addresses the socio economic conditions in Lebanon, together with some important indicators which have been produced during the previous month, particularly regarding the following issues:

  1. The indirect taxes to service the public debt for the benefit of the bank owners

  2. Corruption

  3. The value of government bonds and the main buyers

  4. The budget for 2010

a. The indirect taxes to service the public debt for the benefit f the bank owners

Recent statistics indicate that the taxes on salaries and wages now constitute 2.76% of the total revenues of the budget; in comparison to 5.75 % constituting the contribution of all producing sectors (most of which are banks, insurance companies, multi national foreign companies etc).  In other words the workers and the wage laborers are bearing a burden half as high as all other sectors combined.  This is the first gift from the regime to the workers to celebrate their international day: Insolent policies that does not put any limit to greed; policies that show once more the true classist face of the ruling “elite”!

In this context we stress yet again that raising taxes on consumption does not build a fair society; and what is often quoted as an excuse “the trickle-down effect” or in other words that the rich spend more has been scientifically proven to be wrong (i.e. this does not lead to redistribution and to a fair tax system).  Furthermore the contribution of the VAT tax to the budget now constitutes 22.7% of total budget revenue even though the banks and the insurance companies are exempt from these taxes.

Therefore on the eve of international workers day, our party has re-stressed in its statement to the working people of Lebanon that the reform of the taxation system, the strengthening of the producing economy and limiting the nonproducing sectors of the economy are amongst our main demands and the demands of the poor of Lebanon.  Our party also stressed the importance of taxes on company profit, taxes on higher brackets of wages (escalatory taxation); in addition to the importance to adjust wages to be in line with inflation and to raise the minimum wage to a value of one million Lebanese pounds as a prelude to a mobile wage-ladder.

b. Corruption

The scandals of corruption have increased in our country ranging from the scandal of the rotten sesame seeds, to bad and expired medicine, to rotten wheat all the way through to rotten corn.  This is not surprising since a corrupt regime can only sustain itself through corruption and corrupt policies.  In this perceptive our party stresses the importance of developing a law for food security which will lead to the development of an independent committee to secure the minimum acceptable level of food security to the Lebanese.  Finally our party also stresses the importance of legally pursuing those corrupt officials responsible for importing bad food and medicine into our country.

c. The value of government bonds and the main buyers

The value of treasury bonds which have been issued since 2009 have reached a total of 70400 billion Lebanese Pounds (approximately 46.7 billion US dollars); which is distributed between treasury bonds issued in the Lebanese Pound with a value of 43758 Lebanese Pounds constituting 62% of the total value of bonds and foreign currency bonds totaling 17700 million US dollars representing 38% of total value of government bonds.

The bonds issued in the Lebanese Pound mature within a period of five years (2010-2014) while the maturity period for the foreign currency bonds extend till 2024.  The stated amount of the bonds is the nominal value i.e. without the interest whereas the effective value of the bonds issued in the Lebanese Pound is 44577 Billion Lebanese Pounds and the effective value of foreign currency binds is eighteen billion US Dollars.

The treasury bonds are distributed between mainly two parties: the central bank and the Lebanese banks.  The Lebanese banks have approximately 62% of these bonds; and the Lebanese people struggle to pay ever increasing interests on these bonds, at the expense of the poor of our country, and for the benefit of the rich represented by bank owners and their protectors posing as leaders of sects.

Indeed the total interest which have so far been paid on these bonds from 1993 till 2009 have reached 65636 billion Lebanese Pounds which constitutes 85.2% of the total public debt.  And the government will reissue new treasury bonds and the banks will buy these again at the expense of ordinary citizens and wage laborers form the working class the middle class.

d. The budget for 2010

After a delay which continued for two and half months the finance minister has finally submitted the project of the budget, which widely opens the door for privatization.

Indeed it seems that the leaders of the sects have agreed upon themselves against the interests of the Lebanese people, where several indicators point to a political agreement to pass the budget bill.  The political consensus is based on postponing the increase in VAT taxes from 10% to 12% or to 15% in exchange for agreeing on major privatization “initiatives” without giving any further details on the forms of privatization and the services to be privatized and its implications on the budget.  This is particularly true since the total number of expenditure in the budget has increased by 2816 billion Lebanese Pounds, which is the same figure quoted by Prime Minister Hariri as a pretext to increase VAT taxes or adopt privatization scheme, during his consultation process with the various parliamentary blocs.

In addition the total investment expenditure has increased by 1214 billion Lebanese Pounds (from 819 billion pounds last year to 2033 this year) which is again the same figure that was quoted by the government in the past.  In other words adopting privatization did not lead to a drop in expenditure which was one of the main claims of the government.

These facts pose a series of questions regarding the real reasons behind the campaign for the increase of VAT taxes and then exchanging this demand by proposing privatization.  Perhaps privatization will constitute, as it is being currently circulated, the way out for the excessive liquidity crisis which Lebanese banks are experiencing and which is estimated at 13 billion US dollars.  This last issue becomes more important in view of reviewing the budget, where it can be seen that the total amount for servicing the public debt for the current year has only increased 7.4% from 6087 to 6450 billion Lebanese pounds (i.e. an increase of only 453 billion pounds).  Bearing in mind that the ministry of finance participates with the central bank in absorbing the excessive liquidity, and that it has accumulated a surplus in the treasury accounts in excess of 10000 billion Lebanese pounds, for which we will all pay interest; and bearing in mind that the current budget includes an increase in the public debt equal to the budget deficit which is estimated at 6056 billion Lebanese pounds we can make the following conclusion:  If our apprehensions are correct, the government has first ripped our people of taxes to put in the pockets of the rich from the bank owners and their protectors posing as Sect leaders; and then under the pretext of excessive liquidity will rob the people of their remaining possessions (i.e. the public property of the State) to put it once again in the pockets of the bank owners through a process of privatization- and this triangle of theft will only be complete once the new owners of services which would have been privatized will raise the prices of these essential services to steal from the Lebanese people as they have done in the past.

According to various studies, some of which have even been published by the world bank, the privatization of the electricity sector and private investment in the electricity sector will increase the production price of one kilowatt hour between 1.6 to 3 cents; which implies an additional increase in the production cost estimated at hundreds of millions of dollars.  The same thing applies to the sectors of water, transportation, roads, ports and waste collection and treatment.

Against all the above background, which exerts a heavy toll on the living conditions and standards of the poor and working classes of our country, the government budget tells us of the good news of reducing the inheritance tax of the first bracket, which means increasing the amount of inheritance exempt from inheritance tax three folds in order to protect the rich and their heirs.  For as feudal leadership seems to be transferred from generation to generation in our country without any accountability so it seems they want to transfer and pass their material wealth.

Beirut 30 April 2010

International Affairs Committee

Lebanese Communist Party