Earlier this month, Lebanon’s parliamentary majority leader Saad Hariri warned that Lebanon should not miss the “golden opportunity” to receive significant aid from Arab states and the international community.
Hariri, at an Iftar he hosted in Koreitem in honor of various economic committees, said: "We must not forget that the Israeli aggression has led, in addition to the destruction and killings, to severe direct and indirect economic damages for the short and the long term. The damages cover various sectors such as industry, agriculture, tourism and services. Tens of thousands of Lebanese will lose their jobs if we don't handle this issue in a serious and effective manner."
Hariri also mentioned the compensation mechanism for the private sector which is being established by Seniora government. In addition, he spoke about incentives and tax reductions which will be granted to business owners through agreements to be signed with various Arab and Islamic funds, the International Monetary Fund, and the World Bank.
Hariri pointed to the connection between the need to maintain political and security calm and the actual arrival of the much-needed funds. By this, he sent strong hints to Hizbullah, saying: "We are talking about funds provided mainly by Arab nations, but this depends on the optimal utilization of the current opportunity. This will be implemented during the next Arab League meeting while most of the aid will come from the international conference to be hosted by the Seniora government in Beirut by the end of this year. This is a golden opportunity for us today, and we should therefore take responsibility at this time, and direct efforts to stem internal political conflict which threaten our steadfastness and national unity."
The senior politician also stressed the hefty price Lebanon paid during the war. These comments were confirmed in a recent report published by the Lebanese Finance Ministry regarding the state budget, which indicated that the recent war significantly damaged the positive steps toward reducing the budget deficit when compared to the first half of 2005. According to the report, during the first seven months of 2006 the budget deficit amounted to 1,478 billion Lebanese Pounds (LP), or 23.96 % of total expenditures. This figure is some LP 40 billion lower than the same period last year, when the deficit stood at LP1,518 billion, or 26.3 % of total expenditures.
The most prominent claim of the report is that in July alone, the deficit reached 33 percent of total expenditures, compared to 20 percent in July 2005. During the first half of 2006, a profit of LP941 billion was registered, equaling 15.26 % of total expenditures compared to a profit of LP230 billion during the same period of the previous year. This was achieved thanks to improvement in tax collection, however in July 2006, taxes dropped to just LP6.4 billion compared to a monthly average of LP156 billion during the first half of 2006. In addition, a significant decline was reported in taxes and tariffs.
Lebanese economic authorities are not just concerned about the direct and immediate impact of the war, but also about Lebanon’s future economic sustainability, as the political situation continues to be less than stable. In statements issued by the chairman of the Union of Business Organizations and chairman of the Banks Union, a real concern was voiced that the war has moved from the foreign arena into the domestic one, and thus all political parties were urged to avoid internal disputes and rifts. In their statements, the chairmen hailed the government for its diplomatic campaign to end the crisis that Lebanon was dragged into. By doing so, these statements have actually directed blame for the party responsible for the war and the political situation left in its aftermath.
On the other hand, Hizbullah faces problems in implementing its reconstruction pledges. Spokesmen for the Shiite party have had to defend its policy and often choose to challenge the government. This was especially obvious during discussions on the compensation mechanism for the Hizbullah bombed stronghold – the southern suburb of Beirut , Dahia.
Regarding Dahia, which was bombed on an almost daily basis by Israel during the war, Hizbullah has had to cope with claims that it is trying to get state compensation in zones where many building violations existed. On this issue, the Lebanese deputy and Hizbullah member Hussein Hajj Hassan, stated that the violations were insignificant and thus claims against Hizbullah are not justified. For its part, the government insists that as long as criteria for compensations are not met, no money will be transferred for reconstruction. Hassan expressed his sorrow that, in contrast to other war-torn areas in Lebanon which received foreign aid, the southern suburb was left to fend for itself.
Regarding the compensation policy of Hizbullah, its leader Hassan Nasrallah clarified in a televised interview days after the war ended that Hizbullah would compensate rightful owners of damaged or destroyed homes, while reconstruction of infrastructure facilities such as roads and bridges would fall under the government’s jurisdiction. It seems Nasrallah’s words do little to serve his organization; while the process of rebuilding houses is complicated and involves a long bureaucratic process, the reconstruction of infrastructure has an immediate impact on the ground, and is beneficial to the public in general.
The Civil Works ministry has so far confirmed the repair of 55 out of 95 roads, and added that funds were raised for rebuilding 40 out of the 60 bridges destroyed. On October 3, the Lebanese press reported on a number of bridges reconstructed by the Civil Works ministry in cooperation with engineering units of the French Army, including the bridge to the airport which is located near the southern suburbs of Beirut . It was also reported that British engineering teams would be helping to rebuild bridges in southern Lebanon .
Furthermore, other Hizbullah bypassed channels of aid should also be noted, such as the direct transfer of US$12,000 per household from Qatar for the benefit of various villages in southern Lebanon . The aid from Gulf countries, especially the millions of dollars committed by Saudi and Kuwaiti governments, attests to the successful efforts by Seniora government and Hariri-led "Al Mustaqbal" bloc in the minds of many Lebanese citizens. If the US$70 million committed by the World Bank is taken into consideration, it seems Hariri's words on the need to "not to miss the golden opportunity" are well spoken.
