The World Bank and European Union have pledged $458 million in aid to help Lebanon recover from its economic crisis, visiting Lebanese Prime Minister Rafiq Hariri said Tuesday, February 27, after meeting with officials from both institutions.
"They plan to grant €500 million ($457.6 million) that will be given as part of projects aimed at helping the Lebanese government with its privatization program," Hariri told reporters.
He spoke after meeting with the heads of the World Bank and the European Commission, James Wolfensohn and Romano Prodi, the deputy president of the European Bank of Investment Francis Mayer and French Finance Minister Laurent Fabius. The talks were hosted by President Jacques Chirac.
"This meeting was a major leap forward in that it expressed very strong support by all those present for the economic and structural program that the Lebanese government is adopting," Lebanese Finance Minister Fuad Siniora, who was accompanying Hariri, said.
Siniora said the aid package promised by the World Bank and the EU would also send a strong message to financial markets.
According to Hariri, 30 percent of the aid package would be given in the form of a grant and the remainder will constitute loans at a reduced rate.
"We outlined during the meeting the need for Lebanon to receive international backing, the challenges it is facing and possible solutions ... and all the participants gave their full backing to the government's program," Hariri said.
Wolfensohn, Prodi and others who took part in the meeting declined comment afterwards. A statement issued said they welcomed the willingness of the Lebanese government to push forth with its program to boost Lebanon's economy. "The international financial community stands ready to back this initiative," the statement said.
It said a new meeting between Lebanese officials, international financial institutions and Lebanon's trade partners would be held in the future to further discuss the issue.
During the meeting Hariri outlined his program to privatize Lebanon's ailing state-owned industries, reduce the country's mounting budget deficit and encourage foreign investment, the statement said.
Lebanon's state debt of $25 billion — with more than a quarter in overseas debt — represents 147 percent of the country's gross domestic product (GDP). In 2000, Lebanon's economy posted negative growth for a second consecutive year.
Debt servicing payments account for 44 percent of the $6.6 billion budget for 2001, and exceeds revenues.
Hariri, a billionaire entrepreneur, started his second stint as prime minister in October, having held the post from 1992 to 1998. — (AFP, Paris)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com )