Confusion Threatens International Trust In Lebanon's Government

 Lebanon’s Prime Minister Hassan Diab signs a request for assistance from the International Monetary Fund at the government palace in Beirut, Lebanon May 1, 2020. Dalati Nohra/Handout via REUTERS
Lebanon’s Prime Minister Hassan Diab signs a request for assistance from the International Monetary Fund at the government palace in Beirut, Lebanon May 1, 2020. Dalati Nohra/Handout via REUTERS
TT
20

Confusion Threatens International Trust In Lebanon's Government

 Lebanon’s Prime Minister Hassan Diab signs a request for assistance from the International Monetary Fund at the government palace in Beirut, Lebanon May 1, 2020. Dalati Nohra/Handout via REUTERS
Lebanon’s Prime Minister Hassan Diab signs a request for assistance from the International Monetary Fund at the government palace in Beirut, Lebanon May 1, 2020. Dalati Nohra/Handout via REUTERS

A dispute over the implementation of the government’s electricity rehabilitation plan has drawn local and international attention and criticism over the Cabinet’s “inability to respect its decisions.”

The government went back on an earlier decision to annex the Salaata power plant project to the second phase of the electricity rehabilitation program.

President Michel Aoun had asked the Cabinet Friday to reconsider a decision to postpone the building of a power plant in the village of Salaata on the northern coast. To diffuse tension with Aoun, Diab found an exit to reconsider his government’s decision, despite rejections from the Amal Movement and the Marada Movement’s ministers.

The plan is also opposed by other political forces such as the Mustaqbal movement, the Lebanese Forces, and the Progressive Socialist Party.

Parties against the plan said that building a third plant in Lebanon requires tens of millions of dollars by the time the country is suffering from a dire economic and financial crisis.

A minister, who had voted in favor of the decision before the government retracted it, stressed that Diab has “mismanaged his battle” against the head of the Free Patriotic Movement, MP Gebran Bassil.

Speaking on condition of anonymity, the minister told Asharq Al-Awsat that he was not aware of the reasons behind Diab’s decision, which came after his meeting with Aoun, before the Cabinet session that “politically harmed his government on the one hand, and caused him international and Arab embarrassment, on the other.”

A deputy also commented on the government’s move, saying: “The government’s performance is dominated by improvisation and confusion… which is hindering key financial, banking and administrative appointments.”

This would shake the government’s credibility before the International Monetary Fund (IMF), the deputy noted, especially as bold moves are required to implement the approved reform plans.



Saudi Arabia's Non-oil Business Sector Resilient in March

The Saudi capital Riyadh. AFP
The Saudi capital Riyadh. AFP
TT
20

Saudi Arabia's Non-oil Business Sector Resilient in March

The Saudi capital Riyadh. AFP
The Saudi capital Riyadh. AFP

Saudi Arabia’s non-oil private sector activity grew rapidly in March with new orders boosted by lower prices and improved economic conditions, although the rate of growth slowed from January’s near 14-year high, a survey showed on Monday.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) edged down to 58.1 in March from 58.4 in February but remained far above the 50 mark signaling growth.

The new orders subindex slipped to 63.2 in March from February’s blistering 65.4 reading, Reuters reported.

Despite the slower momentum, businesses engaged in stockpiling, anticipating sustained sales growth.

Employment growth was driven by increased sales volumes and efforts to boost capacity. The survey data pointed to the best quarter for job creation in over 12 years.

Naif Al-Ghaith, Riyad Bank’s chief economist said that improved business conditions are supported by government efforts to enhance regulatory frameworks and infrastructure investments, paving the way for greater private and foreign investments.

Saudi Arabia’s Vision 2030 plan to diversify its economy away from hydrocarbons aims to increase the non-oil sector’s contribution to GDP to 65 percent by 2030. It is currently over 50 percent.

Input cost inflation eased to a four-year low in March, prompting companies to reduce selling prices for the first time in six months amid strong market competition.

Backlogs of work increased sharply, the fastest since August 2018, due to higher orders and constrained capacity.

The survey showed a marked softening of business activity expectations for the year ahead across the non-oil economy, however.