Lebanon’s Budget Deficit Amounts to $4 Billion Annually

Kataeb Party President MP Sami Gemayel meets with the head of the Association of Banks in Lebanon, Joseph Tarabay. (Kataeb website)

Lebanese ministries and state departments suffer from a surplus in the number of their employees, thousands of whom receive monthly salaries without assuming any work.

Public institutions have employed more than ten thousand people in the last two years, despite the government’s decision to stop hiring or contracting for state positions for two main reasons: the surplus of employees and workers and the attempt to reduce the high rate of wages that afflict the state treasury and increase the annual public debt.

Experts and specialists agree that the continuation of this policy undermines the ability of the state to carry out the necessary reforms and prevents the containment of the deficit.

The irony is that violating the government’s decision to prevent employment was committed by the ministers, who themselves took the decision to stop hiring, according to the former head of the Shura Council Shukri Sader.

In remarks to Asharq Al-Awsat, Sader said that some ministers have willingly violated the decisions of the cabinet.

The employment rate in Lebanon’s state departments is the highest compared to other countries in the world, with the number of employees in the public sector amounting to 40 percent of the total number of workers in Lebanon.

“The number of people employed in the past two years reached around 10,000, 5,000 of whom are holding positions in military and security establishments, and the rest in ministries, departments and municipalities,” said Mohammed Shamseddine, a researcher at Information International.

These figures have prompted the Finance and Budget Committee to address a letter to the Central Inspection Department, requesting a list of all new posts in the ministries and state departments, in order to hold the ministers responsible for this matter.

Shamseddine sounded the alarm over the fact that 65 percent of the state revenues go to salaries of employees in the public sector.

He added: “It is known that the annual revenues of the state are estimated at $12.5 billion, of which $8 billion are paid for salaries and wages, $5.5 billion to debt service, and $1 billion for projects and services, and $2 billion for electricity deficit, which makes the budget deficit reach up to $4 billion annually.”

Meanwhile, the head of the Kataeb Party, MP Sami Gemayel, called on the Association of Banks in Lebanon (ABL) to devise a reform agenda, warning of a comprehensive collapse of all sectors.

Following his meeting with ABL President Joseph Tarabay, Gemayel stressed that the political parties were “not aware of the seriousness of the economic and financial situation at a time when Lebanon is collapsing.”