Rolling blackouts and billions spent on subsidies to a failing state-owned electricity company have been facts of life in Lebanon the last several years. Government losses from managing the problem account for forty-five percent of Lebanon’s total debt, putting the country on the brink of a Greek-style bankruptcy. In 2016, the Lebanese Institute for Market Studies’ (LIMS) launched a campaign to open up the electricity sector to private competition—and in 2019, the government approved a plan that will enable private options and save billions in taxpayer money. The success of their campaign will save $5.4 billion dollars, which translates to an additional $125 saved by the average taxpayer each month.
“Three years ago, when LIMS suggested allowing private generation of electricity, no one in Lebanon had even thought about this option,” said LIMS President Dr. Patrick Mardini. “Today, private production of electricity became inevitable—thanks to our well-structured advocacy campaign.”
With LIMS’ ideas guiding the way, the Lebanese government has created a legal framework that will enable private independent power producers to be the sole providers of all future electricity generation projects, and has also pledged to allow the development of an infrastructure that can support electricity 24 hours a day.
The campaign’s focal point was the magnitude of media exposure and advocacy, including 33 television interviews on prime-time news and talk shows, 20 radio discussions, 42 newspaper interviews, and 50 online articles and mentions. By having a presence in the media the evenings before and day of cabinet meetings, LIMS dominated public discussions on the issue. “Our campaign managed to make electricity a central topic in the 2019 parliamentary elections,” said Mardini, describing a scenario that would have been impossible even a few short years ago.
In addition to media exposure, LIMS held more than 30 meetings with ministers and members of Parliament to discuss the limits of the government’s plan to rent offshore “powerships” as well as the benefits of free-market alternatives. Five political parties adopted LIMS’ recommended reforms and used them as examples during cabinet meetings and in media interviews.
“In 2018, the campaign successfully saved $2.4 billion of taxpayers’ money,” said Dr. Patrick Mardini, president of the Lebanese Institute for Market Studies. “We stopped Lebanon from renting two additional power ships, which would have cost $1.8 billion, and promoted private— rather than state—production of electricity in Deir Ammar, which saved another $0.6 billion.”
“The Lebanese Institute for Market Studies is very effectively transforming Lebanon through solid research, sound management, and pro-liberty strategizing in a country weary of public failures, which are especially evident when the electricity goes off,” said Dr. Tom G. Palmer, Atlas Network’s executive vice president of international programs and George M. Yeager Chair for Advancing Liberty.
When LIMS’ reforms are fully implemented, competition will improve the reliability of electricity supply without the need for additional government spending, which will help reduce the budget deficit. According to Mardini, the new changes will help Lebanon improve its ranking on The Fraser Institute’s Index of Economic Freedom by 3 points.
“LIMS’ hard work led to the removal of the state’s monopoly on electricity production, will enable private investment, and will create competition in that key industry,” said Palmer. “Those steps are transformative and will bring economic benefits to industry, homes, schools, and hospitals and pave the way to greater peace, stability, and freedom. And this is just the beginning.”
About Lebanon Institute for Market Studies:
The mission of Lebanese Institute for Market Studies is to restore economic freedom in Lebanon by working with policy makers and opinion leaders.
About Atlas Network’s 2019 Templeton Freedom Award:
Awarded annually since 2004, Atlas Network’s Templeton Freedom Award is named for the late investor and philanthropist Sir John Templeton. This prestigious prize honors Sir John’s legacy by recognizing Atlas Network’s partner organizations for exceptional and innovative contributions to the understanding of free enterprise and the advancement of public policies that encourage prosperity, innovation, and human fulfillment. The Templeton Freedom Award is generously supported by Templeton Religion Trust and will be presented during Atlas Network’s Freedom Dinner on Nov. 7 at the Intrepid Sea, Air & Space Museum in New York City. The winning organization will receive a $100,000 prize, and five additional finalists will receive $20,000 prizes.
The finalists for Atlas Network’s 2019 Templeton Freedom Award are:
- Centre For Development and Enterprises Great Lakes, based in Bujumbura, Burundi; for their “Birashoboka” project.
- Foundation for Economic Freedom Inc., based in Quezon City, Philippines; for their work to deliver property rights to landowners.
- Lebanese Institute for Market Studies, based in Amsheet, Lebanon; for their work to liberalize the electricity market in Lebanon.
- Pacific Legal Foundation, based in Sacramento, California, United States; for their litigation work to roll back unconstitutional regulation.
- Platte Institute, based in Omaha, Nebraska, United States; for their occupational licensing reform initiative.
- Reason Foundation, based in Los Angeles, California, United States; for their work to advance public pension reform.