Lebanon is at risk of losing a large chunk of the $11 billion pledged at this year’s CEDRE conference as politicians jostle over shares in a new Cabinet, a source revealed Wednesday.
“If Lebanon doesn’t do anything about this Cabinet impasse, many other countries are in need of this money,” the source told The Daily Star. World Bank officials have repeatedly suggested Lebanon may be deprived of the pledged soft loans if the government fails to use the allocated funds in a specific deadline.
This message was made clear last week as World Bank Vice President for the Middle East and North Africa Ferid Belhaj and Regional Director Saroj Kumar Jha met with Lebanese officials.
“Farid is one of the biggest defenders of Lebanon and the need for it to receive the financial aid,” the knowledgeable source added.
But the World Bank is made up of 25 executives on the board of directors, to represent over 190 countries.
These officials see Lebanon as a small dot on the map, compared to the need of money for countries such as Yemen, Libya, Syria, Iraq and Jordan.
The source noted that the World Bank is scheduled to hold a conference in Amman next February to discuss a support program for Jordan.
“I hope it’s not the case, but if a government isn’t formed in Lebanon by then, the money could just go right to Jordan.”
The World Bank pledged $4 billion in soft loans to Lebanon by far the largest donor at CEDRE.
Lebanon’s government formation has been at a standstill since May 24, when Prime Minister-designate Saad Hariri was nominated to do so.
Hezbollah put the brakes on all progress made in the last months after it demanded that six Sunni MPs outside of Hariri’s Future Movement be represented by one minister in the Cabinet.
Caretaker Foreign Minister Gebran Bassil has unsuccessfully tried to find a compromise for the March 8 Sunni representation.
Hariri has adamantly refused to give in to the demand of the March 8 Sunni group.
“Belhaj told Hariri that one minister here or one minister there is an internal Lebanese problem, but ‘You all can’t continue like this without a government,’” the source explained.
Donor countries at the CEDRE conference, which was held in Paris on April 6, pledged more than $11 billion in grants and soft loans to finance investment and infrastructure projects in Lebanon. Lebanon was required to commit to a series of reforms that would contribute to a better implementation of CEDRE.
On Sept. 25 and Sept. 26, Parliament convened to discuss a series of urgent draft laws pertaining to CEDRE. But as the country awaits the formation of a new government, the implementation of the CEDRE-related laws is in doubt at a time when Lebanon reels under a high public debt, slow GDP growth and rising unemployment.
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