Lebanon: Probable uprising

Lebanon: Probable uprising

Is Lebanon next?
Arabic nation to face the fate of Tunisia?

The many years-long, pro-democratic battle of Syrian civilians against the existing regime may have not met with much success but the movement is now creating a cascading effect in its conflict-riddled neighbouring nation, Lebanon. Recently, there has been a surge in anti-government movements. Recent incidents in Lebanon vividly showcase the same. The situation further worsened when a very popular Sunni leader named Sheikh Ahmad Abdel Wahed, who was a vocal supporter of Syrian revolutions, was shot dead on Sunday May 20, 2012 at a checkpoint in the northern Lebanese region of Akkar. This led to mushrooming of some protests and clashes between some anti and pro-Lebanese factions in different parts of the Lebanese capital Beirut and the northern city of Tripoli. This was the biggest protest in Lebanese history since the civil war of 1989.

There are many reasons for citizens to demand a change of regime. Government functioning has proved to be ineffective. Even the Taif Agreement which aimed for equal representation among different religions and sects (Sunnis, Shias and Christians), has failed to uphold the true essence of a 'Republic Nation' ignoring the best person in the job.

The intolerance of sectarianism is further adding to the woes. Sunnis are being marginalised in many ways even during the government formation (in spite of  the Taif Agreement). In response, Shia pilgrims have been kidnapped and abducted while they were returning from Iran. The Shia dominated Hezbollah government which came into power in 2011, has instigated more fear among the Sunnis, thus increasing the fissures between these two denominations. As far as the religious demography of Lebanon is concerned, 59.7 per cent of the population is Muslim with 27 per cent being Sunnis while 39 per cent are Christians. Additionally, Lebanese Sunnis are aiding Syrian revolutionaries. All these could be indications that revolutionary movements similar to other Arab nations  may occur in Lebanon in the near future.

However, an uprising in Lebanon is expected to have a much deeper impact and might result in a change of regime far more easily than in the case of Syria, owing to a weaker government. Moreover, the government doesn’t have a quick response mechanism in place to address contingencies. There have been a series of peaceful protests all around so far. On March 30, 2012, there were demonstrations while on May 15, 2012 people came out on streets. In such a situation, if an emergency arises, the international community should come forward to rescue Lebanon, especially considering the fact that Al Qaeda is believed to have been searching opportunities amidst crisis in Lebanon.

Austerity: Pros and Cons

Is it logical to cut the bills?
The proposed austerity drive might fall flat.

“I am not hesitating to bite the bullet if it achieves the goal, not if it ends in a fiasco," retorted Pranab Mukherjee, the Finance Minister of India, on measures the ministry would resort to in the face of the grim economic condition. In the backdrop of a Eurozone crisis which is casting a global shadow and the current economic slowdown in India, the FM indicated the implementation of austerity measures to put the Indian economy back on track.

To put things into perspective, India’s GDP growth has slipped to 6.9 per cent in the last fiscal after achieving 8.4 per cent in each of the two preceding years. The future outlook does not project a bright picture either. To exacerbate it further, the value of the rupee against the dollar hit new lows and touched 56.52 on May 31, 2012. Risk aversion in the global market is likely to put more pressure on the currency which is already under pressure from the country’s growing current account and fiscal deficits. Interestingly, high government spending is one of the main factors pushing the rupee lower. The inflation too is hovering around a worrisome 7.3 per cent.

To sum it up, India is facing a daunting challenge of curbing expenditures, particularly for the subsidies. While the finance ministry is yet to reveal the list of the austerity measures, it is expected to be a mere repeat of the measures unveiled in July last year when the government directed to cut foreign tours, asked officials to refrain from hosting conferences in five-star hotels and banned introduction of new posts. In 2009, the Finance Ministry had asked various ministries and departments to reduce non-plan expenditure by 10 per cent. But despite all these efforts, the government struggled to meet the fiscal deficit target of 4.6 per cent of GDP. The fiscal deficit has risen to 5.9 per cent of GDP and there is enough doubt about the government’s ability to meet the 5.1 per cent target set for 2012-13.

High subsidies, which were as high as Rs. 65,000 crore in fuel alone, are putting pressure on fiscal deficit. However, the government is looking for a fiscal consolidation by reducing the subsidy bill eventually to 1.75 per cent of GDP.

Surprisingly, this move came at a time when globally the austerity measure is fast losing on its popularity especially in the Eurozone. For the uninitiated, German Chancellor Angela Merkel’s party Christian Democratic Union (Germany) suffered a crushing defeat for being stringent on austerity. Moreover, citizens across various nations in the Eurozone expressed their dissatisfaction against austerity which was further reflected in the election results in Greece and France. Moreover, the austerity measures have failed to resurrect the tumbling economies in the Eurozone and resulted in a rise of unemployment and further reduction in growth. In such a situation, how much the austerity drive can do to spur economic growth in India remains doubtful.