eWizzard wroteAccording to the
government's reform plan the LBP won't stay fixed at 3,500 to the dollar as there shall be a more flexible exchange rate (page 10) and public sector employees shall see an annual wage increase as an adjustment for inflation.
Same problem as everywhere...
At one side it is not acceptable at all that depreciation put some of them below poverty line. But it puts everybody.
At another side, if trade balance is not fixed before that, all this banking tricks (audi * 2 for fresh money, etc) + wage increase - will cause lira to skyrocket even more, and private sector who only can help country to recover will be totally dead, because they can't just follow "trend" and increase salaries by changing numbers. It seems to me fair to tie public sector salaries to average private sector salaries.
Therefore, any public sector employee who are choking private sector will understand that he is strangling himself in an indirect way.
And IMO knowing how the IMF works, no one will give Lebanon loan with such plans, unless other spending reductions and taxes increase - will please them. But guess what, taxes increase is even worse for private sector.