International donors pledge $7.6bn in package for Lebanon

LEBANON: France, the US, the EU and the United Nations were among 36 countries and 14 international institutions who met in …

LEBANON:France, the US, the EU and the United Nations were among 36 countries and 14 international institutions who met in Paris yesterday to pledge a total of $7.6bn in aid for Lebanon, even as violence continued in Beirut.

The international conference was convened by President Jacques Chirac and named after Rafik Hariri, the former Lebanese prime minister who was assassinated on February 14th, 2005. It was attended by the US Secretary of state Condoleezza Rice, the new secretary general of the United Nations, Ban Ki Moon, the president of the European Commission, José Manuel Barroso, and the president of the World Bank, Paul Wolfowitz.

The US will provide $770m for Lebanon's reconstruction, Ms Rice said, raising the total US contribution to $1bn. When Israel was bombing Lebanon last summer, Ms Rice repeatedly refused to ask for the bombing to stop - 1,084 Lebanese civilians were killed in the 33-day war, which did $3.6bn worth of damage.

"We hope the people of Lebanon will take this as an expression from the American people of their admiration and friendship and their belief in the Lebanese ability to overcome difficult times," Ms Rice said.

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Mr Barroso pledged €500m on behalf of the EU, the same amount offered by France. If all European donors are considered, he said, Europe is contributing €2.4bn, or 40 per cent of the funds raised yesterday.

The conference expressed support for Lebanese prime minister Fouad Siniora's economic reforms. It was intended to relieve the pressure of Lebanon's staggering $41bn debt, equivalent to 180 per cent of GDP.

The conference also sent a powerful political message to Damascus and Tehran, whose Lebanese allies demand the resignation of the Siniora government: "Hands off. We support the Siniora government."

"I call on Lebanon's neighbours to fully respect its unity, independence and sovereignty," Ban Ki Moon said. "Lebanese democracy can only work if its leaders are free to make decisions and pursue reconciliation without fear of external pressure or interference."

Neither Syria, Iran, nor their Lebanese allies attended. The current Lebanese crisis started when five Shia Muslim cabinet ministers from the Hizbullah and Amal parties resigned on November 11th. They have been joined in opposition by Gen Michel Aoun, a Maronite Christian, who hopes to become president of Lebanon. Under the 1943 national pact, the presidency is reserved for a Maronite.

News of more deaths, bringing the total so far this week to at least seven, reached the conference in the afternoon. "I would appeal to all Lebanese to refrain from fanning the flames," Mr Siniora said. "I am deeply affected by the loss of lives today. We are here to fight for Lebanon, in the interest of Lebanon. No one can help a country that doesn't help itself."

In their street protests, Hizbullah have brandished posters of Mr Siniora clutching Ms Rice by both hands when she visited him in Beirut during last summer's bombardment. "It's okay, Condi. We haven't lost all our children yet," says the caption in Arabic.

On Wednesday, Hizbullah called Mr Chirac "the spiritual guide" of the Siniora government. Yesterday Mr Chirac and the Saudi foreign minister, Prince Saud al-Faisal, said they rejected the inevitability of a "clash of civilisations"; that Lebanon must instead be a place of "dialogue of civilisations".

But the country has become polarised along civilisational lines, with the Sunnis, represented by Mr Siniora and the Hariri family, Druze and affluent Maronites allied with the powers represented at yesterday's conference. Hizbullah, Amal and lower-class Maronites who follow Gen Aoun have cast their lot with Eastern civilisation, under the aegis of Iran and Syria.

It is not yet clear whether the Western camp that convened here yesterday will opt for a carrot or stick in dealing with Damascus and Tehran. In the face of Saudi, Egyptian and US opposition, Mr Chirac abandoned a plan to send an envoy to Tehran.

But there are regional diplomatic efforts under way to resolve the Lebanese crisis. This week, Saudi Arabia dispatched Prince Bandar Bin Sultan, the head of its national security council, to Tehran to see his Iranian counterpart, Ali Larijani. Saudi Arabia, which is close to Lebanon's Sunni community, has been the biggest donor to Lebanon for many years. Prince Saud yesterday announced another $1.1bn in Saudi aid for its "brother country".

All the ingredients of the 1975-1990 Lebanese civil war are present, except that the fault lines are clearer. This time, the confrontation pits rich against poor, Sunni against Shia. Lebanese officials say their people learned the lessons of the 1975-1990 war and would not fight each other again. But the students who clashed in the streets of Beirut yesterday were infants when the last civil war ended.

Mr Siniora, an upper middle class Sunni banker, is perceived to be out of touch with Lebanon's poor. The $7.6bn pledged yesterday will ease the debt burden, but may have little effect on their lives. Meanwhile, Iran has already handed out $150m in cash, via Hizbullah, to families whose homes were destroyed in the Israeli bombardment.

Lebanon had expected 6 per cent economic growth last year. Instead, Mr Siniora said, it is now suffering from minus 5 per cent deflation. His reform package would privatise the telephone and electricity companies, raise VAT, remove a ceiling on fuel tax and impose uniform income tax. Though it also foresees "special action in favour of vulnerable groups" in health and education, critics say liberal economic policies are the last thing the country needs now.

Mr Chirac, who was a close friend of the slain Mr Hariri, organised two previous conferences to alleviate Lebanese debt. In 2001, Paris I raised €500m; the following year, Paris II €4.2bn. Both were meant to support economic reform in Lebanon; almost the same plan as the one presented by Mr Siniora yesterday. But the government has been unable to carry out reforms in the past because there was no consensus to do so.