Eighteen countries and financial institutions from Europe, North America, the Middle East and Asia committed Saturday, November 23, to provide Lebanon with $4.3 billion aid, following the Paris II meeting, which convened to reschedule the country’s massive foreign debt in an effort to scale it back to affordable levels.
The package, which includes about $3.05 billion in soft loans at low interest rates and $1.3 billion for development projects, is expected to give Lebanon a timely boost as it faces the threat of financial crisis. The Saudi kingdom pledged the lion’s share of the aid package—$700 million—while France offered $500 million. Kuwait, Malaysia and the United Arab Emirates (UAE) each will contribute $300 million, reported AP. Bahrain pledged $200 million.
Further assistance, from the United States, Denmark, Germany and Spain is contingent on the conclusion of a medium-term agreement between Lebanon and the International Monetary Fund (IMF), which requires Lebanon to press for tough structural reforms.
The Paris II meeting was called only after the Lebanese government, headed by Prime Minister Rafik Hariri, pledged adopt specific measures to reduce public debt, including the long-delayed privatization of state enterprises —specifically cellular phone, tobacco and energy—and cutting government spending by nine percent.
Lebanon's is saddled with a mounting public debt, which is expected to top $31 billion by year-end 2002. This figure exceeds 170 percent of the country's gross domestic product (GDP). — (menareport.com)
© 2002 Mena Report (www.menareport.com)
