Friday, January 26, 2007

Some of the aid comes with strings attached

Some of the aid comes with strings attached
The Daily Star

BEIRUT: The $7.6 billion in aid pledged Thursday was toward the upper end of projections, though the nature of some pledges remained unclear when The Daily Star went to press.

Saudi Arabia headed the list of donors with a promise of $1.1 billion, $100 million earmarked for direct financial assistance and the remainder for development projects.

The United States pledged $770 million pending congressional approval, one third of which will fund security related projects - $220 million for military equipment and training, $184 for peacekeeping, and $60 million to equip and train the Internal Security Forces - and $300 million in the form of direct budget support. US Secretary of State Condoleezza Rice said $250 million will be "liquid cash assistance" and the rest will fund "projects." Rice said "there are expectations about continued progress on economic reform," and "benchmarks," rather than conditions, will accompany the financial support package.

The Arab Monetary Fund offered $700 million of funding to be dispersed over five years, and the International Monetary Fund pledged the same amount to "support the implementation of the government's program," $400 million of which could be made available this year.

France pledged a $649.4 million loan with "very favorable conditions," and the European Union pledged $400 million worth of grants and soft loans. The European Investment Bank pledged a total of $3 billion, of which $520 million is for priority investments, notably in the electricity sector, and $725 million for the private sector. The UAE promised $300 million and the Arab Investment Bank $250 million. The Islamic Development Bank offered a financial package of $250 million for social services and basic infrastructure.

Britain pledged $48 million to the UN refugees agency in Lebanon and $115 million over the next four years for reconstruction projects with no conditions. Belgium chipped in with $26 million and Oman pledged $10 million. Italy offered $156 million, made up of $84 million in low-interest credits and a gift of $71 million. It also offered a suspension of Lebanon's commercial debt repayments to Italy. Spain pledged a $45 million grant over 2007-08, and Brazil offered a $1 million donation. Malaysia promised $1 million, and signaled its willingness to discuss rescheduling existing bond maturities. Sweden will give $5.85 million to be channeled through the UN Development Program. Austria pledged $1.3 million to help improve living conditions and for economic reforms, Slovenia pledged $130,000 in 2007, while Greece will give $6.5 million in aid for reconstruction, and Ireland offered $2.4 million, as a grant with no conditions. Germany will give $133.6 million, including $82 million for reconstruction work and $51 million for equipping security forces on the Lebanese border. Norway offered a $15 million aid package to fund coastal management, the petroleum sector, and support for Palestinian refugees and work against cluster munitions. Egypt's $44 million donation will go toward the rebuilding infrastructure.

The nature of Canada's $17 million pledge was not specified, nor was the South Korean offer of $1 million and China's promised $3.86 million. Denmark's $3.5 million will be focused on improving conditions in South Lebanon. Finally Australia will channel $3.9 million to the UN for relief activities, planning to allocate a further $2 million to high-priority community-action programs. - Agencies

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