LEBANON: Lebanon looks to aid conference for help in reconstruction.

Lebanon's political and economic crisis takes centre stage at an international aid conference on Thursday (January 25), with the country's Western-backed leaders hoping anti-government protests don't scare away the donors. Prime Minister Fouad Siniora has said Lebanon needs billions of dollars to help shore up its debt-riddled finances and to recover from last year's war between Israel and Hezbollah guerrillas. Hezbollah is spearheading a long-running battle to topple Siniora, and France has warned that the campaign, which turned violent this week, could persuade some donors to hold back. 'Paris Three - a Day of Wide International and Arabic Support,' Lebanese pro-government newspaper Annahar said in its front-page banner on Thursday. 'Donors promise generosity in Paris despite turmoil in Beirut,' the Daily Star said. High ranking representatives from more than 40 countries and organizations will attend the one-day meeting, including U.S. Secretary of State Condoleezza Rice and the new United Nations secretary-general, Ban Ki-moon. French officials said they expected the meeting to raise at least as much as a previous donors' conference in Paris in 2002, which raked in 4.2 billion U.S. dollars (USD) in aid and loans. On that occasion, the United States refused to make any commitment, but Rice told reporters as she flew to Paris late on Wednesday that the United States would pledge 770 million USD for Lebanon, funds that must be approved by the U.S. Congress. France has already said it will offer a 500 million euro (650 million USD) loan at "very favourable conditions", while the European Commission has pledged nearly 400 million euros. Western countries are anxious to show the Lebanese people that they have not abandoned them in the wake of the devastating July/August war against Israel which left many mainly Shi'ite areas of the country in ruins. "The government has tried to give a very bleak picture for domestic in-fight reasons and to please the outside world, the western world, that is supporting him, saying that all this is the result of Hezbollah action and that this has to change. This is a larger battle and it is to be looked at within the American strategy of fighting terrorism while by both Hamas in Palestine and Hezbollah in Lebanon are considered a terrorist group and are not looked upon as a resistance movement," George Corm, economic analyst and former Minster of finance told Reuters. Hezbollah is funded by Shi'ite Iran and has promised to provide its own financial aid to the war victims. Washington and Sunni states, including Saudi Arabia, are worried that Lebanon might fall under the influence of Tehran. Lebanese sources said on Wednesday Saudi Arabia and Iran were negotiating a deal to end Beirut's political standoff, following clashes this week that killed three people and raised fears the country was sliding back towards civil strife. One source said the Saudis might even present an initiative at the Paris conference. Once affluent Lebanon is still struggling to rebuild after its 1975-1990 civil war and is weighed down by 40 billion USD of debt, equal to 180 percent of gross domestic product. Local citizens seemed very pessimistic with only a hand full following the events of the conference. This is the third conference designed to fund raise for Lebanon. "Paris 3 we tried, before it Paris 2 and 1, we did not see anything, let's not waste our time. People are dying without food, drink, work or anything," Ali Badr ElDeen, a resident of Beirut, told Reuters. "Paris 3 we are with every initiative that might bring good to Lebanon but Paris one we saw the damage that Lebanon suffered and Paris Two we also saw the damage Lebanon suffered, so Paris three we are now starving. We are against Paris three since now we owe 45 billion dollars. Tomorrow we will owe 54 billion dollars if everything is going to get cheaper potatoes for the poor will cost 6000 LB (4 dollars) and the meat for the rich," Ali AlHaj, a Lebanese resident said. Some donors are likely to link their aid offers to Siniora's ability to push through an economic reform package, which was unveiled this month and includes plans for privatization, cutting state spending, and hiking taxes.

ITN Source | January 25, 2007

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