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WEEKLY NEWSLETTER
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Lebanon
Index
Western indulgence with Lebanon ended in February 1984. The
bombing of the United States Marines barracks in Beirut on October
23, 1983, with the loss of 241 American lives, and the death of
some 59 French peacekeeping troops in a similar blast that day,
proved how unstable the reconstruction environment was
(see Internal Security and Terrorism
, ch. 5). Fighting in the Shuf
Mountains during the autumn of 1983 illustrated the difficulty of
asserting government control even when occupying forces pulled
back. Most of the MNF troops pulled out with the partition of
Beirut and the renewed fragmentation of the Lebanese Army, although
the French and Italians delayed their departure for humanitarian
reasons.
The MNF withdrawal was accompanied by the effective termination
of United States economic and military assistance programs. The AID
program was frozen, and US$130 million in aid was suspended. One
effect of the aid suspension was a halt in work on an AID-financed
telecommunications rehabilitation project in Beirut. Officials from
the United States embassy said, however, that the United States
would honor its US$18 million development aid commitment.
Despite persistent instability, the CDR pressed ahead over the
next three years with efforts to secure external financing for the
country's reconstruction. Some L£4.3 billion was spent between 1982
and early 1986 on reconstruction (equivalent to between US$500
million and US$700 million).
In 1985 the CDR's new chief, Malak Salam, confirmed that Italy
would make US$130 million available for reconstruction assistance,
of which US$30 million would be on concessionary terms. The EC was
to consider about US$15 million in funding and France around US$54
million. Some US$5 million was pledged by Belgium. Whereas United
States and Arab aid rose and fell according to political
circumstances and the vagaries of the international oil market,
West European aid, usually given on a more modest basis, was fairly
steady.
Between 1978 and 1985, Lebanon secured about US$76 million in
grants and interest-free or low-rate loans from the EC's European
Investment Bank and some US$85.5 million in special reconstruction
aid. In March 1986 it secured a further US$15.4 million to upgrade
schools. In April 1987, the EC agreed to provide Lebanon with US$84
million under a five-year protocol to run from 1987 to 1991, of
which US$23 million would be grants and the balance concessionary
loans.
President Jumayyil periodically urged the industrialized
nations to draw up a "Marshall Plan" for Lebanon's reconstruction.
He traveled extensively to Western capitals to secure assistance
but generally received negative responses. EC officials noted in
1987 that their attempts to disburse existing aid funds had
sometimes proved unsuccessful.
The CDR did not confine its efforts to the developed world's
principal financial institutions. In 1982 the CDR held talks on
reconstruction assistance with Hungary and in 1986 with Beijing's
China Harbors Engineering Company on a possible US$500 million
protocol for construction work. In 1985 Czechoslovakia promised
US$50 million, mainly in tied aid, and Romania said it was willing
to lend US$100 million in trade credits.
Aid also trickled in from other sources. Iran social relief
funds were disbursed to largely Shia areas. The Pasdaran in
Baalbek, their Martyr Foundation, and affiliated groups furnished
health and social services.
The EC provided emergency food aid and funds for school
repairs. The Netherlands pledged aid for a factory to make
artificial limbs. Canada lent money for water projects in Beirut
and Tripoli. Britain gave the Red Cross money for humanitarian
assistance. In the southern border strip, Israeli forces provided
some humanitarian assistance. The FAO provided emergency food aid.
The UNIFIL provided extensive medical, social, and, in some cases,
even infrastructure services during the years following the 1982
invasion. Overall, the relief effort was just as much a patchwork
as Lebanon itself.
By late-1987, there were few signs of centralized
reconstruction efforts. The assassination of Prime Minister Rashid
Karami on June 1, 1987, led to the reappointment as prime minister
of Salim al Huss (also spelled Hoss), a Lebanese politician with a
reputation for personal and public integrity. Al Huss, an
economist, moved immediately to develop a radical financial reform
package, including the abolition of fuel subsidies and the pledging
of 20 percent of the country's gold reserves as security for an
international loan. His efforts were largely undermined by Minister
of Finance Camille Shamun, who demanded that reductions in
government spending include a reduction of the bread subsidy. Huss
renewed his reform efforts after Shamun's death in August, but he
and Naim were unsuccessful at getting banks to increase deposits
with the Central Bank.
The reform spirit was clearly alive, but the government was
unable to negotiate agreements with key sectors of Lebanese
political and economic life or impose its will on any part of the
country. As Jumayyil's unhappy period of office drew closer to its
September 1988 termination date, there were still a few who hoped
that a new president might be able to forge ahead with
reconstruction effort. But in late 1987, reconstruction seemed
unlikely.
* * *
The most important sources available in 1987 were Marwan
Iskandar and Elias Baroudi's The Lebanese Economy in 1981-82
and The Lebanese Economy in 1982-83. The Middle East
Economic Digest has been equally vital. Both these sources, it
should be noted, depend on a wide range of information furnished by
Lebanese journals, newspapers, banks, and institutions. The
original sources, such as Le Commerce du
Levant and the quarterly and annual reports of the Central
Bank, should receive much of the credit for attempting to portray
a coherent picture of the Lebanese economy during more than twelve
years of civil and international strife. The data used originated
in Lebanon itself; the analysis is written from safety outside.
Reporters such as Nora Boustany of the Washington Post
and Peter Kemp of the Middle East Economic Digest, directly
or indirectly, have furnished a mass of useful information under
extremely trying circumstances. The work of the Centre for Lebanese
Studies in Oxford, Britain, also should be noted. (For further
information and complete citations,
see
Bibliography.)
Data as of December 1987
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