In a country where most politicians need nerves of steel when facing opponents, Rayya Haffar-Hassan was chosen to sit at the helm of the finance ministry. This is the first time a woman has ever held such a top job in this the country over-burdened with nearly $50 billion (Dh183.5 billion) in national debt.

Many, including women activists and economists alike, welcomed Rayya's selection for such a key position.

Her appointment was announced on November 9, the same day the 30-member Lebanese national unity government was revealed.

"I have not felt it is a challenge I can't face," Rayya said. "Thank God the political environment is suitable, there is an agreeable atmosphere among the government team, and the economic situation today is better than it was two or three years three years ago. Now, circumstances are suitable to do something and succeed."

Despite being the first woman to hold such a prominent office in the modern Arab world, she does not see it as an obstacle.

"I don't believe that because I am a woman it will be more difficult," she told Gulf News from Beirut.

"I don't see any difference between myself and any other person with the same qualifications."

Rayya has worked for many years on these issues at different levels in government and says she is familiar with all of them, according to one local economist.

"She has handled different [finance] issues [before her appointment], and she is a highly qualified person," Kamal Hamdan, a veteran Lebanese economist said. "She has long years of experience and is an open-minded person."

Some others, however, warned of the difficulties she might face while she leads the finance ministry. Many Lebanese citizens look at that section of government as the one that introduces the "unpopular laws and regulations, including new taxes."

Rayya has worked with more than one prime minister on financial policies in the past ten years. Already she has been a target for opponents' criticism.


One press report noted that her "detractors deride her as a muse" of the era of Rafik Hariri, Lebanon's former prime minister, by calling her the "golden child of Hariri's financial policy".

A self-made tycoon, Hariri was widely credited for launching massive reconstruction projects in the aftermath of 15 years of civil war in a city that once was called the "Paris of the Orient". But his opponents also blamed his policies for burdening Lebanon with big debts.

Hariri was assassinated in a car explosion in February 2005.

Rayya said she started her financial career with former finance minister and prime minister Fouad Siniora, currently a member of parliament, and the late economic minister Basil Fleihan, who was also killed in the 2005 explosion.

"I am proud to say I graduated from their schools of thought … I learnt a lot from both of them, and God willing I will build on the great reforms they introduced," she said.

Rayya, meanwhile, said she will follow the general lines included in the government's plan of action, which is still being worked on. It has yet to be presented to parliament for a vote of confidence.

She says that the government's general policies will include "financial and monetary stability, reducing the national debt, continuing the reforms relating to customs, property and finance, as well as improving the services provided to citizens by the finance ministry."

However, economists believe the toughest and most complicated topic on Rayya's desk is to lower Lebanon's national debt, which is expected to top $50 billion this year.

"The $50 billion came as a result of failed work of the country's institutions" in the past years, Hamdan said. "To handle the debt, we need to make essential changes in spending policies, or reconsider our tax policies, or maybe the two options together."

By increasing revenues and cutting expenses, Lebanon can partly handle the chronic problem of its growing national debt, he said.

Priorities should be listed to achieve that target, Hamdan explained, noting that electricity and health insurance are behind the increase in the national debt.

"The electricity sector alone is responsible for nearly 40 per cent of the accumulated debt during the past 15 years," he said

Electricity should be given a "top priority status," he said. More attention should be given to the maintenance of the existing installations, building new ones, and making the process of transmitting power from generating plants to distribution centres more efficient and with less waste.

Top priority

Electricity is the third largest expenditure after debt servicing and salaries in Lebanon.

Some reports noted that Rayya has already joined the national debate on whether to privatise both telecommunications and electricity.

At the same time, social security and health payments are costing the government nearly 700 billion Lebanese pounds (nearly Dh1.70 billion).

The number of people receiving social security benefits is nearly 500,000, However, these funds usually go to the head of the household, so the fund actually reaches an estimated 1.2 million Lebanese.

There are also a number of other issues facing the economy that the new minister will have to deal with.

Amendments to the existing tax laws, including introduction of new taxes on property and adjusting Lebanon's high interest rates are also moves that must be taken in the coming months, economists said.

While interest rates are almost zero abroad, financial institutions are calling on Lebanon to lower its rates.

Interest rates on the Lebanese pound and treasury bills have continued to drop this year as the central bank encouraged commercial banks to lend to the private sector in Lebanese currency at low rates, economic reports said.

The interest rate on the five-year treasury bill currently stands at eight per cent.

Lower rates

The International Monetary Fund (IMF) agrees, the reports added, that lower interest rates on the Lebanese pound would increase the attractiveness of local-currency loans and over time would also reduce the need for subsidized local currency lending as a means of de-emphasising the US dollar's importance.

"Economists argue that if interest rates on the local currency continue to fall gradually then the government will be able to reduce the cost of debt servicing and hence better control the budget deficit," said one Lebanese press report.

However, economists expressed their reservations on introducing new taxes that would affect lower middle and low incomes.

While the finance issues awaiting the new minister seem tough, many economists say that in Lebanon the authority and capability of the finance minister are slightly different compared to those of her counterparts in other countries.

"She is a finance minister on one hand," Hamdan said, but on the other hand, she needs to maintain the balance of power represents in the National Unity Government.

Therefore, "she is not only responsible for drawing the financial policies of the government but for providing leadership and balance to other governmental issues that have a financial dimension."

The need for reforms and agreement amongst members of the government are all crucial elements, according to financial experts, in drawing up Lebanon's financial policies.

Profile: Rayya Haffar-Hassan

The newly-appointed Lebanese finance minister was born Rayya Mohamed Ali Haffar in 1967 to a well-known Lebanese family from Tripoli in northern Lebanon. She has a brother and a sister.

Her father was a general manager for Ericsson in Lebanon, while her mother was a senior employee at the tourism ministry.

After obtaining her bachelor's degree in business administration from the American University of Beirut (AUB) in 1987, she travelled to the US, where she received her masters in business administration from George Washington University in 1990. She majored in finance and investments.

In 1993, she started her career at the Ministry of Finance, where she worked till 1998. In 2000, she took on the responsibilities of an adviser to the Minister of Economy and Trade.

In 2005, she was chosen as programme specialist for the economic governance and pro-poor portfolio at the United Nations Development Programme (UNDP) office in Lebanon.

Rayya has been part of former Lebanese prime minister Rafik Hariri's team.

She worked at the office of the prime minister from July 2003 to February 2005, and from October 2005 to October 2009.

Among her several duties during these years, she worked most notably on the elaboration of the government's economic and social reform agenda under the Paris II and Paris III International Donor Conferences for Lebanon. She was also a member of the government's reform coordination office in charge of monitoring the implementation of the Paris III.

She also acted as a project director for the European Union-funded projects ‘Support to Implementation of Socio Economic Reforms', and also acted as project manager for UNDP project ‘Enhancing Decision Making Capacities at the Prime Minister's Office'.

Rayya is married to Dr. Janah Al Hassan, a gynaecologist. They have three daughters.