Sunday, February 24, 2008

Tie die

I've been meaning to write this post for a few days now but I've extremely busy. People who follow what's going on in Lebanon (and I mean the economic events, not the drum beating), will know that the government is trying hard to privatize electricity. I have blogged about this issue a few times, easily found using the search function. It is important: this would be the first of the public services to be privatized. The World Bank (!) has tried to dissuade the government, but it is still set on doing that. The electricity problem is also important because 7 youth died and 30 were wounded in incidents related to electricity shortages in January. The government and the March 14 cronies tried to imply that the people of the southern suburbs steal electricity by hooking up to the mains (which they do), and that this is why there are shortages. I have blogged many reports from Al Akhbar's excellent economic page in which it investigates the claims: it appears that all regions of Lebanon are stealing electricity. But Al Akhbar went further and obtained copies of documents showing that it is the Government, through its various agencies and "gifts" that is the biggest drain on the Lebanese electricity sector: it owes "Electricite du Liban" an unbelievable $500 millions in arrears. Yes you have read well, this is not a typo. The government responded to these "allegations" and Al-Akhbar stuck with its data and responded back.

This was last Wednesday February 20. On the same day, there were a lot of interesting information. The front page of Al Akhbar was about Prime Minister Sanioura allowing, by special decree, smuggling of fuel oil and heating oil and diesel and foodstuffs and farm products from Syria. Weapons are still forbidden. This is a tremendous action, as for decades, Lebanese farmers have been asking for a control of smuggling of farm products from Syria. This is NOT protectionism, this is just the rule of law, now being broken by decree. Al Akhbar says the true reason is that Saad Hariri promised to relax smuggling laws so that the people of Akkar (to whom he promised $53 millions in "private" aid) could benefit from the smuggling which is an important part of their livelihood. Akkar is the main recruiting grounds for the Hariri Future movement's large demonstrations, and this came in the wake of the February 14 demonstration.

On the same day, Assafir ran a very interesting report on the status of the balance of trade in Lebanon. A few interesting facts:
  • The trade deficit in 2007 was $ 9 billions, up $2 billions from 2006.
  • We import (in order of importance): metallic products, electric goods, chemical products, transportation equipment, ordinary metal, and food ($756 millions, 6%).
  • We export (in order of importance): ordinary metals and products, pearls, precious and semi-precious stones and precious metals, electrical equipment, food and foods industry products ($283 millions, 8%), and electric goods.
  • We import from (in order of importance): the US ($1.14 billions), Italy ($1.06 billions), China, France, Germany and Egypt.
  • We export to (in order...): Switzerland (this must be the gems. Or Ghandour chocolates), UAE, Syria and Saudi Arabia.
It ties in nicely together, right?

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