Lebanese Prime Minister Rafiq Hariri was provided the opportunity on Tuesday, February 27, to make his case for a €500 million ($455 million) aid package to a group of international financial institutions at a meeting in Paris, called by Jacques Chirac, the French president and a close friend of Hariri.
The meeting itself was called to discuss Lebanon’s $25 billion foreign debt burden. Servicing the debt is expected to cost Lebanon $6.6 billion during the course of 2001.
Among the officials attending the Paris meeting were James Wolfensohn, the president of the World Bank, and Romano Prodi, the president of the EU Commission.
Hariri asked that one-third of the €500 million package be given as a direct grant, with the rest as a long-term low-interest loan. One third of the money would come from the World Bank, one-third from the EU via its MENA (Middle East and North Africa) program and the remainder from European investment banks.
Hariri was no doubt aware that the funding would not be given without any strings attached. Speaking to the meeting, he acknowledged that it would be linked to government programs and specifically privatization.
Hariri reportedly left the meeting with a positive impression regarding the international financial community’s readiness to lend a helping hand. At the same time, it was stressed that, before help would be forthcoming, the Lebanese government would have to show that it is ready to control spending, ease investment restrictions and fight money laundering. The privatization of Lebanon’s Middle East Airline is considered to be a test case of Hariri’s intent
Hariri told the meeting that he was determined to maintain the level of the Lebanese pound. Devaluation, he stated, would hit home hard because exports are only one-tenth of exports. Following the gathering, sources said that a follow-up would be necessary before any final decisions are taken. — (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)
