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Budget discussions continue, World Bank blames elite for crisis, ministers to sign energy deals: Everything you need to know to start your Wednesday

Here's what happened yesterday and what to expect today, Wednesday, Jan. 26

Budget discussions continue, World Bank blames elite for crisis, ministers to sign energy deals: Everything you need to know to start your Wednesday

Mikati's cabinet met for a second consecutive day Wednesday.

Lebanon’s cabinet met for the second consecutive day yesterday, focusing this session on the draft budget law. The meeting was mired by disagreement as well as absences. Energy Minister Walid Fayad disapproved of tackling the budget line by line, and said that the focus should be on an overall recovery plan. His sentiment was echoed by Tourism Minister Walid Nassar. Nassar also said he will not approve the proposed granting of special powers to the finance minister, and expressed his reservations about provisions of the bill related to income tax. There were also some notable absences. The energy minister reportedly left the cabinet meeting in order to receive his Syrian counterpart at the Bekaa border crossing. Justice Minister Henri Khoury was absent due to an official visit to Iraq and President Michael Aoun had to leave the meeting to meet with American Ambassador Dorothy Shea. The cabinet adjourned around 2 p.m. and did not reconvene as initially planned. Later in the day, the Land Transport Union held a protest outside the Grand Serail, the headquarters of the Lebanese government. The cabinet is expected to reconvene today to continue discussing the draft budget.

The World Bank has blamed Lebanon’s elite for the ongoing financial crisis. In its latest economic monitor report, released yesterday and titled “The Great Denial,” the organization estimated that Lebanon's economy contracted by 10.5 percent in 2021. This, the report says, was the highest contraction among 193 states last year. Government revenues have halved year-on-year to 6.6 percent of GDP. Moreover, the report linked the rise of inflation to the removal of subsidies last June. The Central Administration of Statistics estimated inflation to have risen by 224.39 percent year-on-year in December 2021. The one silver lining in the report was Lebanon’s tourism numbers, which saw a 101 percent jump from 2020. Meanwhile, Transparency International has ranked Lebanon 154th out of 180 countries in its World Corruption Perceptions Index.

Jordan and Syria’s energy ministers are in Beirut and are set to ink two deals that would bring Jordanian electricity to Lebanon via Syria. Yesterday, Syria’s energy minister arrived in Lebanon where he was met by Energy Minister Walid Fayad. The two ministers later met with President Michel Aoun in Baabda. Jordan’s energy minister is expected to arrive this morning via plane. The signing ceremony for both deals will take place at 10 a.m. The first agreement to be signed is between Lebanon and Jordan for the supply of electricity to Lebanon. The second agreement is with both Jordan and Syria, and will secure the transfer of the electricity through Syria to Lebanon. Last Thursday, Fayad announced that Jordan would provide Lebanon with electricity in the next few months. The announcement came after Jordan’s energy minister said that the country would supply Lebanon with between 100-250 megawatts of power, depending on the time of day. Lebanon’s already ailing electricity sector has not been able to meet demand for years, and due to the recent economic crises, has been only able to produce a few hours of electricity a day. This has forced the country to rely on private, unregulated and heavily polluting generators.

Speaker Nabih Berri has called for a joint session between Parliament’s finance and budget; administration and justice; and national economy, trade, industry and planning committees today at 10:30 a.m. They are set to discuss the Competition Law Proposal, a proposal to amend Article 80 of Law 144 of the 2019 Budget Law, and a law aimed at recovering money and assets transferred after Oct. 17, 2019. On that date, banks closed for two weeks, and after they reopened refused to pay out dollar deposits in full amounts, forcing clients to withdraw their money in lira at a discounted rate.

In case you missed it, here’s our must-read story from yesterday:Aoun vs. Berri: a war until the last breath


Lebanon’s cabinet met for the second consecutive day yesterday, focusing this session on the draft budget law. The meeting was mired by disagreement as well as absences. Energy Minister Walid Fayad disapproved of tackling the budget line by line, and said that the focus should be on an overall recovery plan. His sentiment was echoed by Tourism Minister Walid Nassar. Nassar also said he will...