Sabounjian says Lebanese economy in recession

Social benefits cuts to boost Lebanon's industry

GMT 07:57 2012 Tuesday ,15 May

Arab Today, arab today Social benefits cuts to boost Lebanon's industry

industry minister, Vreij Sabounjian
Beirut – Riyad Shumann

industry minister, Vreij Sabounjian Beirut – Riyad Shumann Lebanon has entered into an economic recession, the industry minister, Vreij Sabounjian, said Monday, warning of the worsening of economic conditions if the government fails to take action. Sabounjian’s remarks, followed a meeting with members of the Industrialists Association, who also warned of the negative impact of a recent hike in National Social Security Fund  (NSSF)subscription fees.
"Industrialists cannot bear any additional burdens under critical economic conditions on the local, regional and international levels," Sabounjian said.
Ziyad Bakdash, deputy head of the Industrialist Association, said the government would do better to pay off its own dues to the NSSF instead of approving a hike in subscription fees.
The NSSF recently increased the ceiling on the salary bracket, on which sickness and maternity fees are applied.
Bakdash said the NSSF decision weighed heavily on the industrial sector; particularly as it followed a Cabinet decision to increase wages for private sector employees.
Sabounjian said the timing of the NSSF decision should be reconsidered to avoid a negative economic fallout.
"The decision comes at a time when the Lebanese industrial sector is facing increased pressure on several fronts", Bakdash said.
He added that local political instability and a deteriorating security situation, coupled with turmoil in Egypt and Syria, two of Lebanon’s main trading partners, have negatively affected Lebanon’s industrial sector.
"The transit of goods through Syria to other Arab states, is affected due to violence sweeping the country", Bakdash said, highlighting declining sales to Syrian merchants as Lebanese industrialists hesitate to sell on credit.
"However, part of the negative impact of the Syrian crisis on Lebanon’s industrial sector is offset, by an increased demand on certain products that the Syrian industry is no longer capable of manufacturing", he added.
Bakdash urged the government to work on opening new markets for Lebanese industrial exports.
Among recent government efforts to boost Lebanon’s industrialist sector, the Cabinet approved in late March, a draft law slashing export taxes by half.
Bakdash has reviewed the visions of the Industrialists Association, and has adopted the following basis:
-        Improving, activating and rationalising the administration and financial security, through the amendment of the Social Security Act, so that the law is compatible with the needs of the Lebanese society.
-        The Lebanese state  paying out its dues, through contributions and taxes which it has received.
-        Stopping waste and activating the administrative and medical regulations in all security devices and circuits.
-        Organising special groups to achieve a financial balance, as their social benefits are paid for by other sectors.
According to Sabounjian, the draft law was aimed at helping Lebanese industries partially offset the high cost of production, and would allow industries to increase export-oriented production and reduce prices, which would bolster competitiveness in foreign markets.
Bakdash said the government should implement stricter regulations of the NSSF and cut squandering, by implementing administrative reforms aimed at fighting corruption within the fund.
The labour minister, Selim Jreissati, said the NSSF had agreed to endorse the hike, after the government promised to increase the payout limit of NSSF sickness and maternity fees.

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