Saniora goes to Paris in search of money, unity

US Undersecretary of State Burns says financial aid would help protect Lebanon from "axis of countries, Iran and Syria."

Saniora 224.88 ap (photo credit: AP [file])
Saniora 224.88 ap
(photo credit: AP [file])
Lebanese Prime Minister Fuad Saniora will present a five-year economic reform plan to the Paris III Conference in Paris on Thursday, hoping to secure foreign aid. The Lebanese government hopes that Arab and Western donors will provide enough funds to compensate for the $6.5 billion loss the country's economy incurred from last summer's war, and to help cover one of the world's largest national debts. "The whole objective is to reduce our public debt and to reduce the overall debt service," the Prime Minister's Office said. According to Lebanon's Daily Star, debt service consumes the largest section of the state budget, accounting for over a third of all spending. The national debt totals $41 billion, the equivalent of 190% of Lebanon's GDP. According to the Naharnet News Agency, Lebanon expects a huge increase in aid. For example, estimates say US aid will exceed $230 million, a significant increase from the usual $30m.-40m. The donor conference is seen as a sign of support for Saniora's government. Sean McCormick, spokesman for the US State Department, endorsed the conference and said it would demonstrate "support of the international system for this democratically elected government" and "the international system's support for the Lebanese people." "We are going to Paris supported by our Arab brothers, supported by the international community," Saniora said in a statement. He dismissed accusations by the opposition in his country that he was going to Paris "to sell Lebanon to the West." Saniora's plan reportedly includes a gradual increase in VAT, cuts in subsidies, and privatization of state-owned companies. It does not include income tax reform; the 10% flat-tax will remain in place. This has brought criticism from the opposition, including Hizbullah, Amal and Christian leader Michel Aoun, as well as from labor groups. "There are no political commitments of any kind" the prime minister said. "We will not accept any such commitments." Speaking from Israel, US Under Secretary of State Nicholas Burns said the financial aid would help protect Lebanon "from that axis of countries, Iran and Syria, and organizations like Hizbullah, Palestinian Islamic Jihad and others." At a ceremony at his presidential palace on January 9, French President Jacques Chirac indicated that the meeting of core donors had generated a "very positive" outlook. Chirac highlighted Lebanon's importance for France and the commitment of the French government to the Paris III Conference. He echoed the US stance that the conference would "be a success and result in permanent assistance to Lebanon to enable it to recover." The French Foreign Ministry said Saniora's government was well-regarded by participants in the conference. However, it and its policies still face bitter opposition from the largely pro-Syrian opposition. Hizbullah walked out of the government in November along with the Amal bloc, headed by Parliament Speaker Nabih Berri. Berri said Tuesday that Amal would support Paris III, but he has already expressed opposition to Saniora's economic reform program. The conference will be chaired by Chirac, his foreign minister, Philippe Douste-Blazy, and Finance Minister Thierry Breton. UN Secretary-General Ban Ki-Moon will also attend the conference, as will Arab League Secretary-General Amr Moussa and US Secretary of State Condoleezza Rice.