Election dollars: political money “revives” the market!

Since before the civil war, it has not been possible to separate party and organizational work in Lebanon from the influence of political money, sometimes linked to a petrodollar, as was the case with Iranian and Saudi financial support for some parties today , or Iraqi and Libyan in the past. As far as election money in particular is concerned, in addition to the effect of external support, it has often – and still is – linked to the ability of self-funded candidates to support their individual campaigns, or even lists that have agreed to include it in exchange for financial support. In short, and in the absence of organized and transparent party funding mechanisms adopted in some Western countries, the country of this money on specific candidates, regardless of its source, is one of the criteria that allows a real fight to be fought.

Money is simply the backbone of the electoral logistics process: from delegates’ fees to the cost of television and radio advertising, to the rental of billboards of various shapes, types and sizes, in addition to the price of information systems for recording and tracking votes. , and rents for polling stations and meeting rooms, with all that that entails Salaries for full-time employees. The most important thing that has developed in recent years is to sell the air of the local TVs yourself, so that the TV interview, news coverage, or broadcasting of the events of election festivals and conferences becomes a service that in exchange for a certain fee, according to the timing and duration of the television space, and the percentage of viewers of the program (in cases of interviews). The elections thus turned into a season that was able to revive the budgets of media organizations, even at the expense of the credibility of programs and the priorities of news coverage, which are now subject to election funds.

fresh dollar infusion
All of the above costs associated with the election process are now priced and paid in fresh dollars, or in pounds, according to the parallel market price. The election season thus turned into an opportunity to inject a mass of dollars into the market, within a short period of no more than two months. The beginning begins with the large number of delegates who need the voting machines in each district, whose number is estimated in the hundreds for each list in each of the fifteen districts. And the wages of these people could exceed $ 400 on average in hot constituencies like Beirut’s first district, and they could drop to tens of dollars in the suburbs. What is striking is that the “delegates’ market” in the vast majority of constituencies is dollarized, requiring the candidate to provide these costs in cash dollars.

Baltozai, on the side of the delegates’ market, the rental property market is booming for a few weeks, and each list needs dozens of them in towns and neighborhoods in all constituencies, to be used as temporary polling stations. These centers’ rental costs double as the election date approaches, prompting most of the lists to discuss it months before the election date, especially for the ground shops near the polling stations, which are in high demand due to their importance in Election Day operations. Particularly in the Beirut region, the vast majority of landlords have moved to apply for rent grants in cash dollars, given the multitude of candidates to apply for land shops near polling stations, which has increased rental costs in some neighborhoods to more than $ 5,000 in exchange for using it for a few weeks.

As for the media institutions, their budgets have been increased by the dollars of the funding candidates, or the parties and funding platforms that support the candidates, after turning every hour of air into a source of fresh election dollars as the price of the interview on the air ranged between $ 20,000 and $ 60,000, depending on the timing, station and duration of the maintenance. Note that some stations offered the candidates known as the Package Agreement, that is, an integrated package that includes press conferences, events and celebrations, with interviews and news coverage, in exchange for a fixed grant of $ 150,000 can exceed.

The market that many do not pay attention to is the market of “experts” in the organization of election machines, who have the technical expertise in managing data and delegates, and who often have the appropriate relationships with the election keys in each district, in addition to the experience of purchasing and organizing the appropriate information systems. They, in turn, usually wait for the election seasons to offer their services to the candidates, especially the financiers who do not have strong party structures capable of managing these issues, nor do they have historical machines to support them. Note that it is precisely this category of “experts” who often move around in search of the highest pay among candidates on different lists, or even within the same list, while the race for preferential votes rages.

Reduce spending on organizing the election process
The other side of the financial movement related to the election is related to spending on the organization of the election itself by the Lebanese state, which in 2018 exceeded $ 54 million. This year, spending on the rule of law has been reduced to just $ 15.5 million, due to the drop in the dollar exchange rate between the two sessions from £ 1,500 in 2018 to £ 27,000 today. Knowing that a large part of the funds allocated as part of the election process are denominated and paid in Lebanese pounds, such as compensation for transport allowances for voting leaders and clerks for election day, the advancement of the Lebanese army and internal security powers, in addition to the advances of governors, remuneration to the Electoral Supervisory Board, and the allocations for personal status directorates and political affairs and the joint administrative directorate in the Ministry of Home Affairs. And all these expenses, will not be included among the factors that directly affect the movement of hard currency in the market.

What can not be monitored is election bribery (transport grants, assistance in kind, services …) and vote buying. All of this constitutes a major expense equal to what we mentioned and perhaps more.

In short, in recent weeks, the elections have been a source of liquidity entering the hard currency market, contributing to the shift of various sectors related to the elections, such as rental property and the media. As far as election day in particular is concerned, another mass of liquidity is expected to fall on the market, linked to the fees of the deputies, who often receive their fees after the long election day and the results are counted. As for the elections, and with the expiration of the deadline given by the Governor of the Banque du Liban to control the exchange rate of the dollar in the market, by a pump through the platform, the foreign exchange market will have another challenge, in terms of the availability of hard currency and its exchange rate.

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