Time to Repeal All Subsidies and Open Sectors to Competition


The initial budget draft included a 5.25 trillion Lebanese pounds (LBP) loan to Electricité du Liban (EDL), Lebanon’s national electricity company. Furthermore, the budget included another 1.8 trillion LBP subsidy clause that covers gasoline, diesel, propane tanks for households, telecom and electricity service providers, and power plant maintenance.

LIMS explained that covering EDL’s deficit with a treasury loan, instead of including it in the general budget’s expenses only serves to nominally bring down the budget deficit, giving the illusion of better fiscal discipline. With the government subsidizing multiple failing sectors, the biggest of which are the electricity and telecommunications industries, LIMS objected against all forms of subsidies, as they have repeatedly proven to be disastrous. In fact, the government has nothing to show for the accumulated $48 billion of electricity subsidies, except countrywide blackouts. EDL needs to close its deficit by increasing prices and lowering non-technical losses and the high production cost, rather than through continuous borrowing. Additionally, LIMS stated that the practice of pricing below cost cannot go on, be it for electricity, telecom services, or fuel. Keeping subsidies will only serve to widen the government’s budget deficit, especially with rising oil prices worldwide, due to the war in Ukraine.

Moreover, government-run/protected monopolies must be opened to competition to guarantee better quality, and inexpensive services. Lebanon is the sole country in the world that has government protected exclusive agencies—where specific goods can only be sold by selected businesses. With over 3,000 exclusive agencies, all these entities need to be terminated in favor of a freer imports market.

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  • The Government Owns The Biggest Monopolies In Lebanon, Port Of Beirut Was Among The Worst Worldwide, February 24, 2022: VDL, Radio Interview AR
  • Market Competition Constrained By Huge State Monopolies, February 26, 2022: Nidaa Al Watan, Article AR
  • On Air Podcast – Episode 7, February 27, 2022: MTV, TV Interview AR
  • Electricity Sector Must Be Unbundled Into Separate Production, Transportation, And Distribution Divisions, February 28, 2022: MTV, TV Interview AR