|Siniora stands by reform package
|Prime minister says plan will spur growth, create employment
Prime Minister Fouad Siniora fiercely defended his five-year economic reform bill Friday, predicting that the program would create new jobs and increase economic growth.
"The Lebanese have expressed in various ways a pressing need for a policy of economic, financial, administrative and social reforms," Siniora said a conference in Beirut.
The controversial plan has not been well received - even by allies of the prime minister, who have argued that higher taxes would put additional strain on the economy. Siniora made the comments during a speech at the 5th Middle East and North Africa Development Forum, a three-day regional conference where more than 750 experts and officials will discuss how to make reforms work in the region. The forum is organized by the MENA Think Tanks, the World Bank, the Lebanese Center for Policy Studies and the UN Development Program.
Outlining the goals of the program recently put forward by the government, Siniora said that structural reforms would be implemented in order to establish a modern economy, while legal and administrative barriers would be removed to attract investors.
Siniora also referred to the social dimension of his program, which he said would "improve the social situation, reinforce safety nets and reform Social Security."
"The third part of the program aims to maintain financial and monetary stability, reduce the public debt, implement the privatization program, reduce expenditures and increase the revenues of the Treasury," he told the conference.
Meanwhile, the World Bank's vice-president for the MENA region, Christian Poortman, complemented the many economic and political reforms taking place in the region. He added, however, that "there are reasons to continue to be concerned."
He said that although the MENA region had enjoyed average GDP growth of 6.1 percent a year over the last three years, per capita growth remained below the average for developing countries and insufficient to deal with continuing pressures on job markets.
"The region has to create 90 million jobs over the next 20 years," he said, adding that unemployment rates had not declined enough to create higher-quality jobs for a young and increasingly educated workforce.
Poortman stressed the need to tackle poverty issues, linking a shortage of economic opportunities to difficulties in reducing poverty. In most of the MENA countries outside the Gulf Cooperation Council, he said, "20 percent of the population is living below the poverty line ... This is an increase of 6 million people compared to 1987."
Warning that the recent economic boom might deflect pressure for additional reform, he recommended a larger role for the private sector as "the main engine for growth and job creation" - but added that the state should better fulfill its roles as a regulator, a protector for the poor, and a provider of adequate levels of public goods.
Poortman added that economic reforms could only be fruitful if accompanied by social transformations, including educational improvements, greater gender equality and better governance mechanisms.
During the forum, participants will discuss the following topics: reforms for development in the MENA region; what does and does not work in fostering reforms; empowering agents of change for reforms; and key reforms for the region's future.
In addition, 12 themes will be debated, including local governance, rethinking the role of the state, trade reforms, corporate social responsibility, gender and community empowerment.
The forum will also be an occasion for decision-makers from MENA, Iran and Turkey to trade experiences with civil society and the private sector.
Raed El Rafei
The Daily Star