SAWT BEIRUT INTERNATIONAL

| 4 May 2024, Saturday |

Increasing public sector salaries, will it develop or exhaust the economic?

“Information International” distributed a report on “workers in the public sector”, in which it stated:

“Workers in the public sector announced a warning general strike on Tuesday18th and Wednesday19th  to demand an increase in their salaries and wages and an improvement in their purchasing power that has been eroded by inflation, high prices and the collapse of the exchange rate of the lira against the dollar. There is no accurate official census on the number of employees in state institutions for several reasons, including the multiplicity of job designations: employee, contractor, employee and dealer, and the multiplicity of departments, public institutions and municipalities, but the correct number is around 320 thousand distributed as follows: 120 thousand in the security and military forces of the army, internal security forces, public security, state security and Parliament police, 40 thousand in Official education: 30,000 in ministries and public administrations, 130,000 in public institutions and municipalities, and to these are about 120,000 retirees, the majority of whom are military and teachers.

Before the salary payroll was approved in 2017, the cost of public sector workers was about 8,300 billion pounds. After approving the chain and making new employment for about 9 thousand employees and increasing salaries due to the increase in years of service, the cost of salaries and wages of workers and retirees is now about 12 thousand billion pounds annually, which was equivalent to 8 billion dollars, or about 1,000 billion pounds per month, and this high cost constitutes  86 percent of the total imports of the Lebanese state amounting to about 14 thousand billion pounds.

As a result of the financial and economic collapse in which the Lebanese live, their purchasing power has decreased by 85 percent, especially the employees who receive their salaries and wages in Lebanese pounds, correcting salaries and wages and improving purchasing power is a right and a necessaty, for no one can work for a low salary that is sufficient for few days only.But raising the public sector salaries has many difficulties

The number of workers must be reduced before any increase, perhaps by half, and this matter is impossible in light of the current conditions, the lack of job opportunities and the rise in the unemployment rate.

– Any increase that does not match the value of the inflation occurring is useless, and therefore if half of the inflation rate, i.e. 43 percent, is adopted, the cost of the increase may reach 5,000 billion pounds, so that the total cost of workers in the public sector will be about 17 thousand billion pounds, which is 120 percent of the  state’s imports.

This increase is supposed to be covered, either through the imposition of taxes and fees, which is not possible in an exhausted and destroyed economy, or by borrowing and increasing the public debt, which amounted to $ 97 billion, and even this borrowing is not possible because banks no longer have sufficient liquidity, and thus money should be borrowed from Banque Du Liban  so borrowing becomes from a bank. Lebanon is the solution, and that means more inflation and the erosion of purchasing power.