Thursday, January 25, 2007

Paris conference pledges aid to struggling Lebanon

Paris conference pledges aid to struggling Lebanon
By Crispian Balmer REUTERS

Promises of aid topped $4 billion at a donors' conference on Thursday after Lebanon appealed for funds to help it recover from the war between Israel and Hezbollah guerrillas. A Saudi Arabian pledge of $1.1 billion, on top of grants and loans from France, the EU, the United States, the Arab Monetary Fund and World Bank, brought the total to around $4.6 billion. French President Jacques Chirac opened the one-day donors' conference saying Lebanon needed generous support to overcome economic woes caused by the "appalling clashes" in 2006.

The meeting comes two days after some of the worst street violence Lebanon has seen in years, with three people killed and more than 100 injured during a general strike called by the Hezbollah-led opposition. The militant Shi'ite group has accused Prime Minister Fouad Siniora of being in the pocket of the West and Lebanon's pro-opposition al-Akhbar daily said on Thursday the Paris conference was designed to help the government, not the country. French diplomats said they were worried some countries might hold back from offering aid because of the political turmoil. "(Lebanon) is a country that is obstinately seeking rebirth and more than ever needs the unanimous support of the international community," Chirac told the conference. High ranking representatives of more than 40 countries and organizations were attending the meeting, including Siniora, U.S. Secretary of State Condoleezza Rice and United Nations Secretary-General Ban Ki-moon. The conference appeared set to beat the goal set by French officials of raising at least as much as a previous donors' conference in Paris in 2002, which raked in $4.2 billion in aid and loans.


Lebanon is still struggling to rebuild after its 1975-1990 civil war and is weighed down by $40 billion of debt, equal to 180 percent of gross domestic product. The July/August war against Israel seriously exacerbated Lebanon's problems, with much of the country's infrastructure bombed and many Shi'ite villages and districts wrecked. "After Israel's onslaught on our country we are now on the edge of a deep recession," Siniora told the conference, adding that his government would stand firm against the Hezbollah-led protests and try to enact a planned financial reform. "The cost of failure is too great to contemplate, certainly greater than the cost of implementing success," he said. Hezbollah is funded by Shi'ite Iran and has promised to provide its own financial aid to the war victims. Western countries and Arab Gulf states are anxious to show the Lebanese people they have deeper pockets and are the better allies. "The process of reconstruction must be a priority for the Lebanese people, but they need help in order to do it," British Foreign Secretary Margaret Beckett told reporters, saying London would offer some $48 million, primarily for refugees in Lebanon. British officials said London was also pledging $115 million over the next four years in direct aid to the Lebanon government to be spent on reconstruction projects.

Some donors are likely to link their aid offers to Siniora's ability to push through his potentially unpopular reform package, which was unveiled this month and includes plans for privatizations, cutting state spending and hiking taxes. "Even in times of great despair our determination has never diminished. We have faith in the people of Lebanon," Siniora said.

(Additional reporting by Arshad Mohammed and Francois Murphy)

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