Photo of caretaker Prime Minister Najib Mikati during the government meeting on Feb. 28, 2024. Photo from X account @grandserail
Despite protests organized by depositors and army retirees in front of the Grand Serail, the government met on Wednesday as scheduled to examine several leading issues.
Speaking at a press briefing following the meeting, caretaker Information Minister Ziad Makary announced that the government had agreed to raise the salaries of all serving and retired civil servants to a range between the equivalent in pounds of 400 and 1,200 dollars –including principal and bonus – or roughly 36 million and 108 million Lebanese pounds, taking into account the market rate of LL 89,500 to the dollar. The increases are retroactive to Dec. 1, 2023.
On the other hand, consideration of the draft law on bank restructuring and the distribution of the country's financial losses has been postponed, as ministers have been invited to present their alternatives and remarks. It could be back on the table in "one to two weeks," according to Makary.
The minister also announced that the government had mandated the Council for Development and Reconstruction (CDR) to carry out a preliminary study measuring the economic benefits of building a highway linking Beirut to the Bekaa, to be operated via a BOT (Build, Operate, Transfer) contract, a contractual model in which a public organization partners with a private company to finance, design, build and operate a project for a defined period. Also present alongside Makary, the caretaker Minister of Public Works and Transport, Ali Hamieh, gave no further substantive details of the project.
Mikati's Gaza speech
The meeting's agenda contained 23 items in all – including the appointment of a lawyer in the case involving the former governor of the Central Bank, Riad Salameh, and the reduction of diplomatic staff – on which Makary did not give any details. Contacted by L'Orient-Le Jour, however, the minister said that no decision had been taken on either dossier, but that discussions had progressed.
The senior official read out in full the speech made by caretaker Prime Minister Najib Mikati at the start of the meeting, which focused mainly on the situation in Gaza and South Lebanon.
"We reaffirm the need to work to halt the Israeli aggression on Lebanon, and to act realistically with foreign initiatives, which I consider welcome," said Mikati in his preamble to the government meeting, which convened shortly after 4 p.m.
The caretaker head of government also reiterated his call to the international community to "put pressure on Israel to cease its aggressions and violations of Lebanese sovereignty," before adding: "We greatly appreciate the French and American efforts to protect Lebanon, and we are counting on their action to deter the enemy. We reiterate our call for all the prerogatives of resolution 1701 to be applied and for Israel to be compelled to implement it."
Civil servant salaries
When they voted on the 2024 budget at the end of January, MPs had ratified an increase in civil servants' salaries already enacted by decree, but which has not offset the depreciation of the national currency since the start of the economic crisis in 2019.
While the exchange rate was multiplied by 60, i.e. between the time when the official parity of LL 1,507.5 to the dollar was exceeded by the market, and its current level of LL89,500 to the dollar, salaries were only multiplied by six for members of the armed forces and by seven for civil servants. The budget also earmarked a productivity bonus for certain members of the civil service and provided for the mobilization of LL 20 trillion to finance them.
These adjustments were deemed insufficient by civil servants, who launched a new strike a week ago. Mikati, for his part, decided to suspend the payment of productivity bonuses last Thursday in order to put the issue back on the table of the government, prompting Ministry of Finance employees to go on strike, and incidentally paralyzing the settlement process for all civil service salaries passing through them.
According to information that was confirmed by a union source at the Ministry of Finance before the Minister of Information spoke, the formula put on the table to satisfy all categories of administrative staff provides that:
- Public administration employees receive two more salaries, for a total of nine.
- The transport allowance has been increased by LL 4 million ($44.7) for the military and security forces, to LL 9 million per month (around $100).
- For civilian civil servants, the transport allowance is calculated in cans of petrol (up to a maximum of LL 1.5 million per 20-litre can, i.e. almost $17, slightly less than the official price, which currently stands at almost 1.7 million). This allowance varies according to category (from 16 for the most senior civil servants to eight for those in category five), provided they are present 18 days a month.
- The allowance is subject to a minimum attendance requirement of 14 days per month.
- Retired officers who decide not to have a driver (normally paid for by the state) receive an allowance of LL 5 million ($55.6) per month in exchange.
- According to the union source contacted at the Ministry of Finance, an attendance bonus of $150 is also provided for those who come to work at least 20 days. Contacted by L'Orient-Le Jour, Makary said that the amount had not yet been fixed.
According to the information obtained by L'Oreint-Le Jour, this formula also stipulates that employees of municipalities, public hospitals and public institutions who have not been granted an increase will benefit from these increases, as will public administrations.
Finally, the drafters of the bill expect the cost of these increases to be around 2.7 trillion pounds per month (almost $31 million), and that the government will have to request an additional appropriation of around 10 trillion pounds ($111 million) for the year 2024 to cover these increases. Under this proposal, pensioners received LL 1.2 trillion of the LL 2.7 trillion – over 40 percent of the total.
The announcement of these measures seems to have been well received by civil servants. Shortly after Makary's press conference, the official National News Agency (NNA) announced that it would resume work immediately.
This article originally appeared in French in L'Orient-Le Jour.