Lebanon wins pledges exceeding $10 bn in Paris
PARIS: Lebanon won pledges of grants and loans exceeding $10 billion on Friday at a Paris conference aimed at rallying international support for an investment programme to boost its economy, Finance Minister Ali Hassan Khalil said.
The pledges included $4 billion in World Bank loans, 1.1 billion euros ($1.35 billion) in loans from the European Bank for Reconstruction and Development, and the renewal of a previously pledged $1 billion credit line from Saudi Arabia, Lebanese officials said.
Lebanon has been battered by seven years of war in neighbouring Syria, and is hosting more than 1 million Syrian refugees.
It is seeking the funds for investment to overhaul its infrastructure and to lift economic growth, which Prime Minister Saad al Hariri said has sunk to less than 1 per cent from a previous average of 8 per cent.
Donors in turn want to see Lebanon commit to long-stalled reforms. In a nod to those demands, Hariri pledged fiscal consolidation to reduce the budget deficit — more than 150 per cent of gross domestic product at the end of 2017 — by 5 per cent during the next five years.
Lebanon needs international support for its investment plan and to carry out reforms to root out corruption and to improve fiscal governance, among other goals, he told the conference.
“In this effort, Lebanon cannot succeed alone,” Hariri said. “It needs the support of the international community,” he said, calling for “a clear and concrete indication of this support in the form of grants and concessional loans...”
The Lebanese parliament last week passed a 2018 budget that projects a narrower deficit than in 2017. Standard Chartered, in a research note, called the budget a “positive sign”.
The Paris conference, convening 50 countries and organisations, including Saudi Arabia, United States, Russia and Qatar, is expected to set up a follow-up mechanism to track progress towards reform.
The International Monetary Fund said in February that Lebanon’s fiscal policy needed a consolidation plan that stabilised debt and then began to reduce it.
Diplomats have said Lebanon’s success in attracting international support from donors and the private sector will hinge on reforms.
“Lebanon needs significant investments to upgrade its basic infrastructure, which today no longer allows it to provide all these citizens with essential public services in good conditions,” French Foreign Minister Jean-yves Le Drian said.