International donors pledge billions for Lebanese govt

International donors today pledged $7.6bn (€5.9bn) in aid and loans for Lebanon’s US-backed prime minister and his economic reform programme for the war-scarred country.

The money was pledged at a donor conference in Paris. The host, French President Jacques Chirac, announced the figure after the more than 40 nations and financial institutions attending took turns over four hours in announcing their contributions.

The aid was toward the top end of what analysts had expected.

It offered a boost for Lebanese Prime Minister Fuad Saniora as his government is locked in a power struggle with Iranian-backed Hezbollah and its allies, struggling under debt and facing the task of rebuilding following last year’s war between Hezbollah and Israel that left parts of southern Lebanon in ruins.

“Your support will be essential in seeing Lebanon through,” Saniora told the conference. “The cost of failure is too great to contemplate.”

He added that Lebanon is “on the verge of a deep recession”.

Chirac played auctioneer, pressuring participants to give. He gently chided Japan for not giving more than $11m (€8.5m), checked whether other pledges were in dollars or euros, and asked his aides: “How much?”

“Be brief, be good and be generous,” he said.

That donors gave billions showed that recent violence in Lebanon did not significantly dent international support for Saniora’s government. Chirac opened the meeting with a plea that Lebanon “more than ever” needs international support.

World Bank President Paul Wolfowitz described Lebanon as being at a “critical crossroads”.

Denmark’s representative said Saniora would return home “knowing that you have friends around the world”.

Many praised Saniora’s reform proposals. Wolfowitz called them “ambitious, comprehensive and coherent”. The new UN secretary-general, Ban Ki-Moon, urged donors to “favourably and generously” support the plan.

US Secretary of State Condoleezza Rice confirmed that the Bush administration would seek $770m (€593.9m) for a new comprehensive package of which a substantial part would be grants, not loans.

That money must be approved by US Congress, and would more than triple US economic aid to Lebanon.

“This is a package that is for Lebanon,” Rice said when asked if the money is contingent on the survival of a US-backed government in Beirut. “Lebanon is a democracy.”

The European Investment Bank announced €960m in funds, while the Islamic Development Bank proposed $250m (€192.8m).

Reflecting continuing tensions in his nation, Saniora abruptly abandoned plans to attend an international gathering this week of world political and business leaders, the World Economic Forum in Davos, Switzerland.

Although they insist that aid will be for the entire country – not just for one man or his government – the United States and other donor nations back Saniora and say Lebanon must be defended from meddling by Iran and neighbouring Syria, which occupied the country for nearly 30 years until 2005.

Saniora’s critics said donors would worsen Lebanon’s debt and be pouring good money after bad.

This week’s clashes in Lebanon between pro and anti-government factions recalled the country’s civil war days and offered a stark glimpse of how quickly events could spiral out of control if the confrontation between Saniora’s government and Hezbollah and its allies is not resolved.

Nationwide violence claimed three lives and injured more than 170 people on Tuesday.

Hezbollah gained new public support in its war last July and August with Israel and is thought to have given out many millions of dollars worth of aid to residents of areas devastated by the fighting.

Western powers hope to counter that influence by pouring in more funding of their own.

No Hezbollah representatives were invited to the Paris event.

Aid will come with conditions, mainly assurances that Saniora’s government will make good on economic and structural reforms announced this month, which have infuriated labour unions and Hezbollah supporters.