International donors conference to help Lebanon economy

An international donors conference for Lebanon has opened in Paris with the United States, France and the European Union pledging close to US$2 billion dollars to support the government of Prime Minister Fuad Siniora.

More than 40 states and international bodies participated in the one-day meeting Thursday to raise funds to help rebuild the country. Experts predict the funds offered - in the form of debt relief, low-cost loans and aid - will likely total $4 billion to $7 billion.

French President Jacques Chirac opened the meeting with an appeal for help to Lebanon where "terrible confrontations have brought death and destruction." "A very substantial and immediate financial support from the international community is absolutely indispensable," Chirac told the gathering at a Paris convention center, according to AFP.

Ahead of the meeting, US Secretary of State  Condoleezza Rice declared US$770 million in new aid to Lebanon, two-thirds of which is to go to strengthen Lebanon's security forces with training and equipment. On his part, Chirac announced a US$650 million loan as part of the aid package while the European Commission pledged US$519 million.

Saudi Foreign Minister Prince Saud al-Faisal said his Kingdom would give more than US$1 billion in aid to Lebanon.

Lebanese officials have claimed they need several billion dollars to rebuild villages and infrastructure damaged in the July-August war between Israel and Hizbullah.

Lebanon's public debt has reached US$41 billion, more than 180 percent of gross domestic product (GDP).

To help the economy, Siniora's goverment has introduced a five-year reform plan that would see a hike in value-added tax from 2008 and more privatization. Siniora said at the Paris III conference Thursday that the Lebanese government can’t implement its reform plan without the support of the international community.