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Beirut hoping for windfall from foreign donors

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Beirut hoping for windfall from foreign donors


The current political strife in Lebanon comes at a time when the country is still struggling to ease the impact of years of conflict. While observers say the internal rifts could derail plans for economic reform, the government is hoping to attract billions of euros in aid at a foreign donors conference in Paris this week.

Ministers say the conference is crucial if a financial crisis is to be avoided. “The Lebanese people have been exposed to aggression from the opposition led by Hezbollah,” said the minister of youth and sport. “The aggression is against their right to go to work, especially to Beirut airport. They are finishing what the Israelis did in breaking the Lebanese economy.”

Lebanon’s total gross public debt is estimated to have reached 31.6 billion euros. In 1992 the figure was 2.3 billion. Debt repayments will work out to be about 5.3 billion euros this year and seven billion next year. Commentators say the main cause of this debt remains political instability since the civil war between 1975 and 1990. The cost of last year’s war between Israel and Hezbollah was 2.1 billion euros in terms of direct losses alone.

At the donors conference on Thursday, the government is expected to get substantial pledges from the likes of the US, France and Saudi Arabia. Hezbollah says foreign assistance is welcome, but only if there are no strings attached. It says it won’t accept reforms that include tax increases, subsidy cuts and privatisations.

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