PARIS (Reuters) – Lebanon on Friday won aid pledges exceeding $ 11 billion at a conference in Paris aimed at mobilizing international support for an investment program to boost its economy, the French president said Emmanuel Macron.
The pledges include $ 10.2 billion in loans and $ 860 million in grants, French Ambassador to Lebanon Bruno Foucher said on Twitter.
Lebanon, which has been battered by seven years of war in neighboring Syria and which hosts more than a million Syrian refugees, wants investment funds to renovate its infrastructure and revive declining economic growth.
Donors in turn want Lebanon to engage in stalled reforms. Winking at these demands, Prime Minister Saad al-Hariri pledged to reduce the budget deficit by 5% as a percentage of GDP over the next five years.
Macron told Hariri at a press conference that the aid was intended to give Lebanon a fresh start, adding that it imposed “an unprecedented responsibility” on the authorities to carry out reforms and preserve peace in the country. .
“It is important to continue the reforms in the months to come,” Macron said, adding: “We will be by your side. “
Lebanese officials said the aid included $ 4 billion in loans from the World Bank, 1.1 billion euros ($ 1.35 billion) in loans from the European Bank for Reconstruction and Development, and the renewal of a $ 1 billion line of credit previously promised by Saudi Arabia.
“This is the start of a new process to modernize our economy, renovate our infrastructure and unleash the potential of the private sector,” Hariri said. Growth in Lebanon fell to less than 1% from a previous average of 8%, he said.
The Lebanese parliament last week passed a 2018 budget that projects a lower deficit than in 2017. Standard Chartered, in a research note, called the budget a “positive sign.”
The Paris conference, bringing together 50 countries and organizations, including Saudi Arabia, the United States, Russia and Qatar, decided to set up a monitoring mechanism to monitor progress towards reform.
The International Monetary Fund said in February that Lebanon’s fiscal policy needs a consolidation plan that stabilizes debt and then begins to reduce it.
Diplomats said Lebanon’s success in attracting international support from donors and the private sector will depend on reforms.
“Lebanon needs significant investments to modernize its basic infrastructure, which today no longer allows it to provide all these citizens with essential public services under good conditions”, declared the French Minister of Foreign Affairs Jean- Yves Le Drian during the conference.
“On the other hand, Lebanon needs major reforms of its economy, structural and sectoral.
He said France would provide 400 million euros in concessional loans and 150 million euros in grants to Lebanon, which is still rebuilding itself after its 1975-90 civil war.
Report by John Irish in Paris and Laila Bassam in Beirut; Writing by Tom Perry and Ingrid Melander; edited by Andrew Roche