Finance Minister Ali Hasan Khalil warned Monday that Lebanon would lose the $600 million soft loan provided by the World Bank if Parliament fails to meet and approve the draft budget soon.
“We should put Parliament back to work, and we in the Finance Ministry are especially aware of the harm that comes from the absence of legislation,” Khalil said during a ceremony to mark the opening of a new EU-funded auditorium at the Value Added Tax building in Beirut.
The World Bank approved $600 million worth of soft loans for Lebanon to build several projects, including dams.
“We are at risk of losing $600 million in projects approved by the World Bank that require the Parliament’s approval,” Khalil added. “If Parliament does not convene, we will lose $1.2 billion that Lebanon needs to fund many projects.”
The World Bank stipulates that any grant or loan provided to a country for a specific development project must be executed in a certain period or it will be obliged to withdraw the money and allocate it to other countries.
Khalil submitted the 2015 draft budget to the Cabinet last month but the ministers remained at loggerheads over whether to add the proposed public sector salary scale to the bill.
The budget deficit is projected to reach $5.1 billion at the end of 2015 and Khalil has proposed a series of taxes to finance the salary scale.
The minister said when he took office he thought that the deadlock at the legislative body was “temporary,” and that it would cease in a few months.
“The political situation in the country has imposed itself on us, and it is a reality that we reject,” he said. “We want the election of a new president and the formation of a new Cabinet that can fulfill its duties in the presence of a head of state.”
However, he emphasized the importance of taking legislative action to avoid the financial damage.
Christian parties have been boycotting legislative sessions since November, arguing that the country’s political institutions should not operate as if there was a president.
Lebanon has been without president since May 25, 2014, when former President Michel Sleiman left office at the end of his term.
The Lebanese Forces and the Free Patriotic Movement have agreed that they would keep boycotting sessions unless the top items on the legislative agenda were an electoral law draft and an expatriates naturalization bill.
Khalil dedicated his speech Monday to announcing new reforms his ministry would launch to reduce waste and enhance efficiency. He promised to carry out a reshuffling in most departments that are under the jurisdiction of the Finance Ministry.
Khalil added that the aim of this reshuffling is to improve efficiency, cut red tape and crack down on rampant corruption.
“Some may assume that they can continue to mass wealth at the expense of the Finance Ministry and the citizen. We are now on full alert to put an end to these practices and no one can stop us,” Khalil pledged. He noted that there were lots of irregularities that have been taking place for several years in many departments.
Khalil also announced plans to launch the one-stop electronic shop at the Finance Ministry to facilitate the lives of the taxpayers and citizens. The reforms include the digitalization of many bureaucratic procedures and creating a new system to help citizens report corruption. A new call center will also be launched for this purpose.
He underlined the need to improve Lebanon’s ranking in terms of ease of doing business, which is one of the lowest in the world.
EU Ambassador to Lebanon Angelina Eichhorst sponsored the event.