The illusion of economic progress: Lebanons struggle with public sector salaries and customs tariffs

The illusion of economic progress: Lebanons struggle with public sector salaries and customs tariffs

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2023-04-13 | 09:37

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The illusion of economic progress: Lebanon's struggle with public sector salaries and customs tariffs

On Tuesday, two key points were proposed on the agenda of the cabinet meeting.

The first was to increase salaries for public sector employees, while the second was to adjust the customs tariff fees.

With the increase in the cost of public sector salaries, the government is once again resorting to raising the customs dollar to cover the deficit.

However, the problem is that the state's revenue is in Lebanese lira regardless of how much money enters the treasury.

Meanwhile, most of the state's expenses are in dollars, including the salaries of the public sector, which are paid through Sayrafa platform.

With the shortage and absence of any dollar revenues, the Banque du Liban (BDL) is burning through what remains of its reserves to cover the expenses of the public sector and the state. This has forced the bank to collect dollars from the market, which raises the price even higher and devalues the salaries. We have been living in the same loop every day since the start of the crisis.

Therefore, neither raising the customs dollar nor increasing salaries is a solution to the public sector crisis. It's a