Sunday, 21 October 2007

Class struggle 2008

An IMF/Paris III proposal to reduce Lebanon's $40 billion debt (run up over the last decade) will hit hardest those who can least afford it.

In 2008 the Siniora government will attempt to dump the burden of the economic crisis on working class.

In brief this plan will involve:
• Implementation of fiscal measures equivalent to around 10 percent of GDP over five years.

• Reduction of government debt to under 130 percent of GDP by 2012— from the current 180 percent.

• Introduction of a “global income tax” as of 2008.

• Restraint on current spending— social projects, wages etc.

• Energy and social sector reforms with the reduction in fuel/gasoline subsidies.

• Privatisation of the telecoms industry (one of the few that makes money for the government)

• Tearing apart the pensions system

• A full scale assault on public sector workers, such as civil servants. Government workers, who are banned by law from strike action, will face cuts in “staffing and remuneration”.

Alongside this will be “reducing the costs of doing business”. In effect dumping "red tape"— such as employment protection, benefits, health and safety, travel subsidies.

This won't come easy.

The IMF warns of the “political implementation risks and shocks to the macroeconomic environment”. As these “reforms” will hit the poor, working class and lower middle class, the IMF proposes that a few poor relief schemes are put into place to deflect the coming anger.

They recommend “reallocating social spending toward better targeted redistribution schemes.” The "undeserving poor", no doubt, will go to the wall.

It notes that, “unless the reforms enhance social and economic conditions for the population at large, it may prove difficult to maintain the reform momentum.”

The question that is always put when neo-liberal policies are challenged is: where should the money come from? The majority of Lebanon’s debt is private (unlike with most countries in the Global South). The one sector that has been booming, and is awash with cash, is banking.

The second source is, of course, the billions of dollars salted away by the rich.

Lebanon has always had a complex interplay between class and sect. Today the "political crisis" plays itself out along sectarian lines. The economic struggle, in contrast, is firmly rooted in the exploitation of one class over the other.

The caption reads: "A crowd watches the roadblocks burn, Beirut, 23 January 2007. Thousands of Lebanese demonstrators blocked main roads in the capital and around the country, burning rubble and tyres, protesting against the government." Picture Dina Debbas/IRIN

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