Southern Lebanon taking initial steps toward economic stability
Ever since the May 25th Israeli military withdrawal from Southern Lebanon, the Lebanese Government has been working hard on trying to jump-start the economic life of the region. According to the Economic Minister Nasser Al-Saidi a special committee has been formed to assess the situation and offer practical suggestions.
During the 22 years of occupation, Israel was Southern Lebanon’s main supply of goods and resources, including fuel, bottled water, phone services and medical supplies. After the withdrawal, all Israeli exports to the region were terminated.
To exacerbate the problem, after the borders closed, many people were forced to leave their jobs in northern Israel. Shops were shut down since many of the South Lebanese Army members fled, together with their families fled, leaving a severely depleted consumer base. Moreover, the unsteady and unpredictable political situation has left the international community wary of any investments. This situation is likely to continue in the absence of a formal peace treaty or cease fire agreement with Israel.
According to Al-Hayat daily, Al-Saidi recently presented a plan aimed at rejuvenating the economy and creating new opportunities for employment. These are to be implemented alongside the United Nation's five-year plan for the region.
The minister's plan consists of new tax incentives geared towards creating new opportunities in the local business sector. It offers six years of full income tax exemption to any company that sets up a business in the south within the next three years. Those companies already operating in the area are to receive 60 percent tax rebates. In addition, the government will facilitate loans for small and medium-sized companies, who are not be capable of supplying sufficient collateral for bank loans. Businesses are guaranteed loans of up to LL100 million for a maximum of five years at 3.4 percent annual interest.
The goal of the UN aid package is to upgrade the economic infrastructure of the South, and includes building roads, communication systems, water and sewage systems, and hospitals.
Other sources of funding have been established. Kuwait has already pledged $20 million while Qatar has granted $7 million in aid. According to Arab News, the Islamic Development Bank has agreed to contribute $100 million, of which $90 million will be used to fund the rebuilding of major roads, power lines and the power distribution networks. The remaining sum was given as a "soft loan" for the reconstruction of schools and health centers.
In addition, an $80 million loan from the World Bank has already been approved. Its representative in Lebanon, Hari Prasad, said that that the bank will possibly organize a joint effort with the European Union, the United States, Italy and various Arab countries to help establish a new and thriving economy in the South. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)