The Center of International Private Enterprise (CIPE) recently convened the CEO of LIMS, Dr. Patrick Mardini, for a roundtable discussion and a podcast on Lebanon’s economic landscape, for the second consecutive year. Dr. Mardini started by reflecting on the previous year’s meeting, where the focus centered on the alarming currency instability in Lebanon, witnessing the Lebanese pound’s decline by over 95%. During that juncture, LIMS championed the establishment of a currency board as a stabilizing mechanism. A year on, there is a notable turnaround—the Lebanese pound has achieved a sustained period of stability, albeit without the implementation of a formal currency board. The central bank’s operations, however, have emulated the principles of such a board. Concurrently, Lebanon went through an L-shaped recession, with the economy poised to stabilize at a contracted output level, contingent on the containment of spillover effects from the Gaza conflict. Yet, the looming threat of a larger conflict remains, casting a shadow over prospects of further economic decline.
The dialogue then pivoted to the critical issue of the government’s faltering provision of basic services, particularly in electricity and waste management—an issue reverberating through the local economy. The exorbitant cost of electricity is impacting vital sectors such as industry, agriculture, schools, and tourism, all reliant on a dependable power supply. Simultaneously, a burgeoning waste crisis, evidenced by nearing capacity landfills and visible garbage on the streets, poses a significant challenge for the commercial sector and tourism dependent on foot traffic. In response, LIMS initiated the PRISM project (Private Initiatives to Service Municipalities), gathering municipal leaders and the business community to craft innovative solutions for service delivery.
LIMS proposed the adoption of the user-payer model that envisions the private sector establishing solar farms and waste treatment facilities. Replicating the success of the Toula experience, solar farms enable the sale of electricity to end-users at a 50% reduced cost and ensure a continuous 24-hour power supply when coupled with private generators. Similarly, sustainable waste management could be achieved if the private sector spearheaded garbage collection and recycling, with end-users covering the associated service costs.
To advocate for these reforms, LIMS orchestrated three town hall meetings in collaboration with chambers of commerce in different regions of Lebanon. These gatherings served as a nexus for municipal leaders, businesses, citizens, and parliamentarians. LIMS policy analyst illuminated the potential for private sector and municipal collaboration, citing existing legal frameworks such as the Electricity Law of 2002 and the Law of 2018 on Public-Private Partnerships. However, bureaucratic hurdles in obtaining authorization necessitate a streamlined legal framework.
Municipal leaders and businesses exhibited enthusiasm for collaboration, with parliamentarians pledging to facilitate legislative changes that would expedite private sector involvement in local renewable electricity and waste management. Simultaneously, LIMS launched a media campaign amplifying the significance of private sector engagement in municipal service delivery. Together, these concerted efforts aim to forge a path towards a more resilient, sustainable, and efficient future for Lebanon’s municipal services.
- The Current Economic Situation in Lebanon: Catching Up with Dr. Patrick Mardini, One Year Later, December 7, 2023: CIPE, Interview EN