ECONOMICS & POLICY
equilibrium is in order. The narrative building up towards a modified and increasingly global social restructuring has been thickening from the street protests of the Arab Spring and subsequent outcries for greater social equality to the protectionist political populism and entire social classes’ fears of being left behind in the 2010s to the pandemic-responding initiatives for nationally debt-financed or externally financed social safety nets.
It fits with this perception that in economically plagued Argentina parliamentarians have recently passed a one-time wealth tax for the richest in society – which has conceptual similarities to the aforementioned proposal for a levy on the richest fortunes in Lebanon – and that there is an ever-growing number of countries to which the issuance of SSN-themed loans by the World Bank has ballooned far beyond the $1.5 billion it had committed between 2000 and 2010. Lebanon, if the political squabbles in the country don’t block the agreed $246 million ESSN loan, is just the latest country to be provided with such a loan.
BEYOND IDEOLOGY:
A NEW SOCIAL CONTRACT
Most recently in the global picture of social assistance, the World Bank actually has had a strong hand in the release of the first-ever State of Economic Inclusion report. The report, by a multi-stakeholder initiative that calls itself Partnership for Economic Inclusion and is hosted by the World Bank, released its inaugural SEI at the beginning of the year, saying that it is necessary to increase knowledge on how to help the world’s poor and that multidimensional programs are needed to move to greater economic inclusion – the next big word in the issue and the latest upgrade to concepts such as social assistance and social safety nets.
According to the IMF, countries with limited fiscal space – a euphemism for the inability to formalize an economy and collect taxes efficiently for which Lebanon is a textbook case – should in the coming period prioritize spending on health and transfers to the poor. “Only when infections are durably declining and economic activity is normalizing, should countries begin to gradually roll back these lifelines – while still cushioning the impact on the most vulnerable,” IMF deputy managing director Antoinette Sayeh told an academic forum in the UK at the beginning of February.
Such advice implies that an internationally debt-financed social safety net or poverty mitigation fund – irrespective of the generosity and affordability of repayment terms and interest rates – will not suffice for economically hit countries but rather that creation of a new social system and contract will be vital. This need for technical expertise and a new moral compass applies unreservedly to Lebanon, where a resilient social safety net and fiscal transfer system is as direly needed as a new social contract that by broad consensus of academic economists, business media, and civil society has been overdue for years if not decades.
Knowing that in the past, at least since the Black Death, societal shocks have been triggers of epochal social innovations that, while initiated with some delays, have resulted in longlasting changes such as social security legislations in developed countries. In this sense, the 2020s may be the period to advance from the – by their initial deadline of 2030, now unachievable – ideologically inclined and politically shaped globalized social targets of the SDGs to a mutli-dimensional, more socially inclusive, and economically productive re-globalization of social realities. It seems as if there was never a more paradigmatic time than now for a combination of technical expertise in designing social safety nets, constructing social transfer systems and initiating productive public-private partnerships in taxation and citizenship of public servants and corporates with a simultaneous construction, strengthening, and calibration of a profound moral compass – a moral compass that shows true north for a digitized and climate-challenged world which is as different from the world of the superpowers and cold war as it is from the European days of the scholastics and religious reformers.