$11bn in pledges for Lebanon’s reconstruction
▶ France’s Macron says that the world is helping the region by supporting Beirut in its bid to build economy
International donors pledged more than $11 billion (Dh40.4bn) for Lebanon at a conference in Paris, as nations sought influence in a country that has borne much of the weight of the Syrian war.
The Cedre conference was held to show international support for a country with a population of 6 million, including at least 1.5 million refugees from neighbouring Syria.
French President Emmanuel Macron said the world was helping the region by supporting Lebanon.
“Lebanon must be a pole of stability in the region,” Mr Macron told the conference on Friday. “It is no longer about grants, it’s about investments and structural reforms.”
Maitha Al Shamsi, Minister of State, who led a delegation to Paris, said that the UAE had always been ready to extend a helping hand to Lebanon to support its independence, sovereignty and stability.
Ms Al Shamsi said the UAE would support “every effort seeking to consolidate Lebanon’s political and economic stability as this will have a positive impact on combatting unemployment, poverty and improve living standards of the Lebanese people. This serves the UAE’s message for giving”.
Before the session, western diplomats were sceptical that it would be a success, doubting it would come close to the requirements of Lebanon’s $16bn investment programme. They were wrong.
The re-pledging of a $1bn credit line from Saudi Arabia, which was offered then withdrawn about 10 years ago, and $670 million from France helped the conference to exceed the most optimistic Lebanese estimates.
Other pledges included $1.35bn in loans from the European Bank for Reconstruction and Development and $500m from the Kuwait Fund for Development.
Pledges from non-state financial institutions were also significant, with the World Bank announcing $4bn in soft loans and the Islamic Development Bank pledging $750m.
“Lebanon has done its duty to the world, and it is time for the world to do its duty for Lebanon,” said Kristalina Georgieva, chief executive of the World Bank.
Lebanese Prime Minister Saad Hariri said his country had for so long endured the burdens of other countries.
“We are a very small country, hosting 1.5 million refugees,” Mr Hariri said. “We bear the weight of many nations. Lebanon has history of at one point facing civil war and being refugees ourselves. This does not mean we can do it forever.”
Officials from 50 countries gave a standing ovation as Mr Macron announced that the final figure exceeded $11bn.
But he and Mr Hariri emphasised this was not a call for aid. About $860m of the pledges were grants but much of the money came with conditions – reform and transparency.
Mr Hariri said the conference was the first step to modernise the Lebanese economy, renovate infrastructure and allow the private sector to flourish.
He said he aimed to reduce the country’s budget deficit by 5 per cent in the next five years.
An investment conference for Lebanon in Paris in 2001 led to donations of less than $1bn.
France under Mr Macron has tried to increase its engagement with Lebanon, over which it held mandate power in the first half of the 20th century. Many believe the influence of Saudi Arabia, whose royal family is close to the Hariri clan, has waned in recent years.
In 2016, Saudi scrapped $4bn worth of military aid to Lebanon, the government of which includes members of the Iran-backed Hezbollah group, over what it described as the “seizure by what is called Lebanese Hezbollah of the state administration”.
Some also accused Saudi Arabia of being behind Mr Hariri’s surprise resignation from Riyadh, which he later withdrew. Saudi officials have rejected the accusations as “ridiculous”.
Mr Macron’s success in bringing Mr Hariri to France immediately after the resignation was regarded by many as a diplomatic coup, and a sign that Paris wanted to reassert itself in Lebanon and the region, said Karim Bitar of the Institute for International and Strategic Relations in Paris.
“Macron is definitely trying to fill the gap left by US retrenchment,” Mr Bitar told The National. “Now he is trying to use political and economic leverage to play a wider role, but also to reflect France’s interests.”
Weeks before Lebanon’s first parliamentary elections in a decade, Mr Hariri will return to Beirut with a series of pledges.
But the money is still not in Lebanese hands and must first be agreed on and ratified by parliament, which has struggled to pass critical decisions.
Last year it passed the country’s first budget since 2005 after years of arguing. Despite his promise to fast track the pledges, Mr Hariri will have his work cut out as he races to ratify at least some of the loans before next month’s election.