New Lebanese government to prepare statement on policy goals

BEIRUT (Reuters) – Lebanon’s new government said on Saturday that it will start preparing its policy statement on Monday, as investors monitor its commitment to reforms aimed at boosting the economy.

Prime Minister Saad al-Hariri told reporters that he expected the cabinet to agree on it quickly and that it would resemble previous statements, avoiding areas of dispute between coalition members.

He added that the statement would affirm the reforms he promised at an international donors meeting last year, which could unlock billions of dollars in infrastructure investment.

“There are difficult decisions in all areas that we must take,” he said, after the first meeting of the coalition cabinet.

Public debt is 50% bigger than the size of the economy and annual growth has averaged 1%-2% for years.

It took rival parties nearly nine months to agree on the makeup of the cabinet after May’s election, apportioning portfolios according to party strength and a delicate sectarian power balance.

A committee formed by the cabinet to start preparing the statement will meet on Monday; Parliament Speaker Nabih Berri said that the committee will present it within a week.

Foreign donors have pledged aid and low-interest loans to help the economy by investing in Lebanon’s inadequate infrastructure, but they have tied the money to reforms.

At the Paris conference last year where the pledges were made, Hariri promised to reduce the deficit as a percentage of GDP by 5% in five years.

He said on Saturday that the biggest of Lebanon’s problems was its high spending on an inadequate electricity system. A World Bank official on Friday urged Lebanon to prioritize power sector reform.