Paving the way for economic reforms?
Finally, the electricity bill law is approved by the Lebanese parliament. A draft law allocates $1.2 billion to boost Lebanon’s electricity production by 700 Megawatts of electricity.
Electricite du Liban (EDL), the state-owned company that provides power to most of the country, registers $1.5 billion in debt annually. Treasury transfers to EDL totaled $684 million, registering an increase of 22 percent by in the first half of 2011.
The international financial institutions and economic experts alike have for years called on the Lebanese government to implement structural reforms and find solutions to the core problems of Lebanon’s economy that will probably hinder its growth for years to come.
The International Monetary Fund (IMF) and the World Bank have repeatedly urged the Lebanese Government to adopt radical measures to reduce the EDL losses.
For economic experts, social and telecoms reforms would help increase investment, reduce public debt and spur economic growth.
Today, one of the major challenges is also to find effective solutions to the endemic financial and administrative problems of the National Social Security Fund (Fund) that is intended to provide medical and social services to more than 1.5 million Lebanese.
Underlining BMI's view that Lebanon's healthcare funding model is in need of an overhaul, the UN Development Program (UNDP) has estimated that reform of the country's National Social Security Fund could reduce healthcare costs by up to 15 percent.
The liberalization of the mobile phone market will double GDP by 16 percent between 2009-2014, according to the Telecommunications Regulatory Authority (TRA).
The Lebanese debt-to-GDP ratio, remains a key vulnerability. The high debt service and the deep deficit limit the ability of the Government to stimulate growth.
The paralysis of the political system in Lebanon has long hindered the economic progress. Following the electricity law approval, some economic experts hope Lebanon will take the first step in reform.
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