$6.2 billion in infrastructure
Spending on infrastructure through Public Private Partnerships (PPP) would stimulate the Gross Domestic Product (GDP) in the medium and long terms, according to Ziad Hayek, the Secretary General of the Higher Council for Privatization.
He said: “Lebanon needs $6.2 billion in the sectors of power, water, transport, and services, through PPP.”
Hayek, who was speaking at a workshop at the Basil Fleihan Institute, said that these investments would boost GDP growth by 4.4 percent. A spending of one percent on infrastructure leads to 0.22 percent growth in GDP. “It would generate 216,000 new jobs in the short term and other jobs in the medium and long term,” he said.
Only four percent of the State’s annual budget was spent on infrastructure during the past 20 years. Current infrastructure is valued at $31.5 billion, according to Hayek.
Implementing PPP projects has a greater advantage for the economy. “We don’t have to wait for a long time to receive funds. On the other hand, execution of projects solely through public funding entails new taxes or lending,” he said. The interest rate on sovereign debts would rise due to an increase in the value of loans.
In PPP projects, the private sector could obtain better discounts on the prices of materials. The public administration has difficulty managing risks such as high prices and surpassing deadlines, according to Hayek.
Reported by Yassmine Alieh
Date Posted: Nov 12, 2015