PARIS – The tug-of-war for control of Lebanon takes a financial turn Thursday, with high-ranking officials from 35 mostly Western and Gulf countries meeting in Paris seeking to raise billions of dollars in aid for Prime Minister Fuad Saniora’s embattled government.
Saniora left Lebanon for Paris on a private jet Wednesday, a day after Hezbollah-led protesters who want to topple him clashed with government supporters across the country. At least three people were killed and dozens injured in the violence.
The United States and other Western nations that support Saniora see crucial stakes in Lebanon, hoping the country can emerge from years of war as an oasis of stability in the restive Middle East and stand on its own without interference from countries like Syria or Iran
Analysts expect the countries meeting in Paris to raise $5 billion in grants and loans to help cut Lebanon’s public debt and pay for rebuilding costs after the 34-day war between Israel and Hezbollah fighters last summer.
French President Jacques Chirac told Saniora on Wednesday that France would offer Lebanon a $650 million loan at "very advantageous" rates, said Chirac spokesman Jerome Bonnafont.
The European Union‘s executive commission said Wednesday it will pledge $522 million in aid and loans at the conference to bolster Saniora’s reform agenda.
The United States, meanwhile, has pledged to make a "considerable" donation that is expected to exceed the $230 million Washington contributed to the reconstruction effort last year.
Such support amounts to financial one-upmanship in Lebanon. Iranian-backed Hezbollah is thought to have doled out many millions of dollars worth of aid to residents of areas devastated by the fighting.
"There’s a high-speed race between this (international) aid and the aid from Hezbollah and Iran, which is more direct — more often in cash," said Joseph Bahout, a Lebanese-born professor at Paris’ elite Sciences Po political university.
Many parts of southern Lebanon remain a wasteland of destruction and rubble five months after the end of the war, despite pledges from the government, Hezbollah and the world to put roofs over people’s heads and bring the country back to its feet.
Lebanon’s worsening political turmoil has also raised worries that the government may be too paralyzed to fully deal with reconstruction even with newly injected funds.
While some of the foreign aid could go to reconstruction projects, analysts said most will go to reducing short-term debt — Lebanon faces a staggering $40 billion in public debt — and to paying daily expenses like soldiers’ salaries and electricity.
The aid will come with conditions — mainly assurances that Saniora’s government will make good on economic reforms announced this month that have infuriated labor unions and Hezbollah supporters. They argue that the international aid — which is expected to include loans as well as grants — will leave the country further indebted.
Lebanon’s economy is virtually at a standstill, despite two other Paris donor conferences since 1998 and another in Stockholm, Sweden, in August that pledged about $1 billion for postwar reconstruction.
"What’s happening this time is a bit of an injection of vitamins for the current government, to allow it to hold out for another year or so," said Bahout.
French President Jacques Chirac, motivated by his long-time friendship with slain former Lebanese Prime Minister Rafik Hariri, was to chair the Paris meeting — likely to be one of his last important international gestures with his 12-year tenure set to expire in May.
Secretary of State Condoleezza Rice, U.N. Secretary-General Ban Ki-moon and EU Commission President Jose Manuel Barroso were among those expected to attend the conference.
