$7.6 Billion in Assistance Pledged to Lebanon
International Conference Backs Siniora Government

By John Ward Anderson
Washington Post Foreign Service
Friday, January 26, 2007

PARIS, Jan. 25 -- The embattled Lebanese government of Prime Minister Fouad Siniora won more than $7.6 billion in pledges of financial assistance Thursday from international donors eager to help rebuild the war-ravaged country, stabilize its economy and improve the security situation.

The package -- including pledges of grants and loans totaling $1.1 billion from Saudi Arabia and $770 million from the United States -- is a major boon for Siniora, whose government has been buffeted since early December by a Hezbollah campaign to topple it.

The power struggle intensified Tuesday when Hezbollah and its allies enforced a nationwide strike that paralyzed the country and sparked sectarian clashes, leaving three people dead and more than 100 injured. Four people were killed in renewed clashes Thursday at Beirut Arab University and other locales, officials said.

Against that backdrop, leaders from 36 countries and 14 international agencies gathered here to express their support for Siniora's democratically elected government and its attempts to implement economic reforms, ease a $41 billion debt burden and rebuild vast areas of Lebanon that were demolished last summer during Israel's 33-day war with Hezbollah. Lebanese officials estimate war damage at $3.6 billion.

"I'm going back really pleased with the level of financial support shown today," Siniora said. "This is for all Lebanon and all the Lebanese."

Secretary of State Condoleezza Rice said, "The conference today was a very important expression of the international community's intention to stand by Lebanon and the Lebanese people in these difficult times."

Rice would not say whether U.S. money would be delivered if Hezbollah -- an Iranian- and Syrian-backed Shiite Muslim group that the United States has labeled a terrorist organization -- succeeded in overthrowing Siniora's government and came to power, calling it "speculation."

C. David Welch, assistant secretary of state for Near Eastern affairs, told reporters in Paris on Wednesday, "We are not going to support people who launch wars and try to bring down governments with the benefit of outside assistance. . . . That's just not going to happen."

French President Jacques Chirac, who hosted the conference and pledged $650 million in low-interest loans to Lebanon, said international support depended on a Lebanese "national consensus on economic and social reforms imperative for the future of the country, and on the implementation of those reforms as soon as possible."

At least $464 million of the funds pledged by the United States would be directed to military aid or security measures, according to a State Department official, quoted by news services, who briefed reporters traveling with Rice.

That included $220 million in military aid to the Lebanese government for the purchase of small arms, ammunition, spare parts and other hardware; $184 million for U.N. peacekeeping forces in southern Lebanon; and $40 million for internal Lebanese security services.

About $250 million in a cash reserve would be released to the Lebanese government as it met targets for reforms that Siniora has pledged to implement to help restore fiscal stability and stimulate the economy. Lebanon's $41 billion debt is equivalent to about 180 percent of its gross domestic product, and about half of the country's annual budget is spent servicing it.

Among the measures the government has promised are to raise the value-added tax from 10 to 12 percent, reduce state subsidies for fuel and privatize the electricity and telecommunications industries.

The U.S. funds, which are subject to approval by Congress, are in addition to $230 million that Washington pledged at an August conference in Stockholm and represent a significant increase in U.S. financial assistance to Lebanon, which in years past was as low as $2 million a year.

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