|Hamadeh expects deal next week on new minimum wage
|Sources say ongoing political crisis may scupper agreement
Lebanon's Price Index Committee is expected to reach a final agreement on a new minimum wage on March 27, resigned Labor Minister Trade Hamadeh said on Wednesday.
Hamadeh was speaking after a meeting of the committee, which is composed of representatives from the government, private sector and trade unions.
Hamadeh told reporters that all of the representatives agreed in principle that the minimum wage should be adjusted.
But the Finance Ministry did not send its representative to the meeting on Wednesday, in a move that raised questions about the ability of the committee to enforce any new decisions on the minimum wage.
The Finance Ministry was unavailable for comment on Wednesday. However, sources close to the government said that the ruling coalition will insist that Hamadeh first recognize the legitimacy of the Cabinet and start attending meetings again before any new salary increases can be discussed.
Hamadeh had last week rejected a new salary scale allegedly backed by the Grand Serail, saying that only the Index Committee has the right to set a new minimum wage.
The proposal, which called for a minimum wage not exceeding LL375,000, was announced last week by the president of the Beirut Chamber of Commerce, Ghazi Qoraitem, after he met with Prime Minister Fouad Siniora.
Hamadeh had said last week that Siniora may have encouraged Qoraitem to suggest the new minimum wage in order to test the public's reactions.
Lebanon's minimum wage has remained at LL300,000 since 1996, despite pressure from the General Labor Confederation (GLC) to adjust salaries.
The GLC has repeatedly demanded that the minimum wage be raised to LL960,000.
But well-informed sources say that the GLC and representatives of the private sector may agree on raising the minimum wage to between LL450,000 and LL550,000.
Economist Charbel Nahas told The Daily Star on Wednesday that the general consensus among economic experts is that the price of basic commodities in Lebanon has risen by more than 55 percent since 1996.
"No one can say that that cost of living, for example, went up by only 10 percent," Nahas said.
He added that the largest increase in the prices took place in the period from 1996 to 1999.
"From 2000 until 2005, the prices of basic items became more stable," Nahas said. "But in 2006 the prices surged again due to external factors such as fall of the US dollar and the rise in the prices of oil."
Nahas added that the influx of foreign capital to Lebanon over the past two years has boosted inflation.
But economist Marwan Iskander pointed out that the government may face difficulties raising the minimum wage now amid the current political crisis.
"We cant' deny that the prices of basic commodities have reached alarming levels, but there is interference in the local economy which made life more difficult for the Lebanese," Iskander said.
He added that the current climate is not encouraging for investors. "We used to brag in the past that Lebanon was one of the most liberal economies in the region," Iskander said. "But now several countries like Syria and Jordan are pushing for privatization while the political parties here are blocking all kinds of economic openness."
The Daily Star