Lebanon says needs massive global aid

BEIRUT (AFP) - Lebanon has said it needs to be handed massive amounts of aid at next week's donors' conference in Paris to help the country become a "stabilizing" element in the troubled Middle East.

"If we want to help Lebanon on a structural basis, or for the long-term ... to become a stabilizer in the region ... the international community has to hand massive assistance and support to Lebanon," Finance Minister Jihad Azour said Thursday.

Azour was addressing diplomats from over 30 countries as well as representatives of international institutions who are due to attend the Paris III donors' conference for Lebanon on January 25.

"The G8 countries ... have an opportunity to solve the problem at very low cost because solving the Lebanese problem today may cost a few billions ... but in the future it could cost more," he said.

"We urge you not only to participate in the conference... we urge you that the contribution is substantial ... we need massive support ... and this support has to come on time, otherwise it would be too late," he said.

Azour said "the assistance has to be global because the problem of Lebanon goes beyond the Lebanese society: most of it is currently related to regional issues."

"The war waged on Lebanon is not an internal problem, it is a regional and international problem," he said, referring to the 34-day Israeli summer offensive which destroyed much of Lebanon's infrastructure.

Immediate material damage from the war has been put at 3.5 billion dollars in a country where public debt currently runs at 41 billion dollars -- or more than 180 percent of gross domestic product.

"The future of Lebanon is going to be conditioned by the way Lebanon is going to handle this crisis, therefore there is a global responsibility for major countries in the world as well as major institutions," he said.

"The Lebanese problem is also a global problem."

By helping Lebanon, donor countries would be "preventing a crisis," he added.

The Western-backed government of Prime Minister Fuad Siniora has prepared for the Paris conference a comprehensive five-year reform plan which provides for raising value-added tax as well as introducing privatisations.

Lebanese Economy Minister Sami Haddad told Thursday's conference the government will announce on Monday details of a long-term plan for social reforms.

Azour said no objections to the programme had been raised at a January 10 preparatory meeting in Paris with financial experts from donor countries and institutions.

Edward Gardner, assistant director for the Middle East and Central Asia department of the International Monetary Fund, told AFP that the plan had the backing of the IMF.

"We are very supportive of the programme as it is," he said.

The reform plan approved by Siniora's rump cabinet, which was deserted by six pro-Syrian ministers in November, calls for privatising the electricity and mobile phone sectors and hiking VAT by two percent hike from 10 to 12 percent.

The opposition, led by the pro-Syrian party Hezbollah, has staged a sit-in protest outside Siniora's offices in Beirut since December 1 in its campaign to replace the cabinet with a government in which it would have a minority veto.

The Paris conference has become a bone of contention between the government and the opposition which has seized upon the cost of the proposed social reforms as its new rallying cry.

"Tax increases will only start in 2008, in order to allow time for reforms to be launched by then," insisted Azour.

"And the ministers who have submitted their resignation have supported privatisations, including (Hezbollah) Energy Minister Mohamad Fneish who had been working on privatising the electricity sector," he asserted.

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