Intervention of the Representative of the World Bank

Director of the Middle East Department - Mr. Inder Sud,


International Donors' Conference

Beirut, Lebanon

July 27,2000


Excellency, President Salim AI-Hoss; Excellencies, Ministers and Ambassadors; distinguished representatives of regional, bilateral and multilateral organizations; Ladies and Gentlemen:


It is a great pleasure for me to be here today. The developments in Southern Lebanon over the last few months indeed provide a major challenge for the Government of Lebanon, both for the immediate needs for rehabilitation and reconstruction and for integration of the South with the rest of the country. The consolidation of peace and stability is closely linked to meeting the expectations of the population for tangible development. It is gratifying to note that a significant effort has already been launched by the Government in this connection. The World Bank has moved quickly with a number of initiatives to support this effort.


In the area of emergency infrastructure rehabilitation, especially for water and sanitation, we have reallocated US$ 9 million from our ongoing Emergency Reconstruction and Rehabilitation Project to finance a number of urgent needs. CDR, the Ministry of Hydraulic and Electric Resources, and the Council of the South will co-ordinate this effort. We have, in addition, agreed to allocate at least $5 million from our Irrigation Rehabilitation Project being implemented by Green Plan for rural infrastructure. In addition, we would be prepared to allocate funds for health, education, and transport from our ongoing projects in these areas which have ample available funds.


The World Bank's Board of Directors also approved last month a US$ 80 million loan in support of urgent municipal infrastructure such as street paving, lighting, and small drainage works. About US$ 12 million of this loan is available for the South.


We recognize that economic development would be insufficient, if not impossible, without social development. Consequently, we have been discussing with the Lebanese authorities a community development project which would support community-based social and economic projects and would target primarily the poorer segments of the population. While this project will have a national scope, a large portion of it, especially in the early stages would focus on the needs in the South. We expect the project would complement the efforts of other donors, in particular the United States and the European Union. We await the "green light" from the Lebanese authorities on the project concept of implementation through non-governmental organizations (NGOs) and contracting of project management to an independent agency subject to external technical and fmancial audits.


In summary , the World Bank has undertaken a number of initiatives that should help with the immediate needs of the South. Taken together, ongoing and already approved World Bank loans can provide significant resources to achieve quick results, provided our counterpart agencies move expeditiously.


Looking beyond these immediate initiatives, we believe it would be important to place the development needs and priorities of the South in the overall development context of Lebanon. Programs that are proposed for the South should be consistent with national development programs and strategies and be accommodated within the overall financial

resources available to the country . We look forward to reviewing in this broader framework the proposals that have been put forward today by our Government colleagues. Pressing as the needs of the South are, it is important not to lose sight ofLebanon's global developmental challenges and the need to alleviate poverty in other parts of the country . Progress in macroeconomic and sector policies and improved implementation of development programs would improve the prospects for sustainable growth overall and provide a better enabling environment for the private sector. Whatever the eventual size of expanded official aid programs to Lebanon, it is the creation and strengthening of a credible environment for sustained growth which will make the crucial difference.


We welcome the proposal to hold a follow-on meeting in the fall to have a well-coordinated discussion around these issues and to permit donors to make specific pledges of support. The World Bank would be prepared to organize and chair such a meeting as a Consultative Group Meeting if the Government and the donor community thought it to be helpful. Such a meeting can be the forum to galvanize the donor community to help Lebanon in its development efforts. Several of you already have substantial commitments that we hope can be augmented. We also hope that the program would attract new donors given the special situation of Lebanon.


On the side of the Lebanese authorities, I hope that serious efforts will be made to remove various bottlenecks to effective and speedy utilization of available funds. Likewise, there is also the need to continue efforts at correcting fiscal imbalances and gradually relieving the constraints imposed by the public debt. Stronger economic growth would clearly be helpful in this regard. But this will not substitute for the critical efforts to increase revenues and rationalize expenditures. It would be important to have the discussions in the Consultative Group on programs underpinned by a sustainable macroeconomic framework and more efficient institutional arrangements for implementation.


As we committed three years ago in our Country Assistance Strategy for Lebanon, the World Bank is prepared to provide significant financial resources and technical services to assist Lebanon. It is with this objective that we opened, just six months ago, an office in Beirut. My colleagues in the Beirut Office are working with the Lebanese authorities in different sectors and liaising with their counterparts in the donor community . They look forward to helping further define and develop the Government's medium and longer-term program of investment, to place it in the context of analyses of feasibility and priorities, within the fiscal constraints, and with realism on absorptive capacity , for donors to consider .


I am confident that we will approach the coming months with the same degree of perseverance, dedication, and unity of purpose that characterized the residents of the South and of all Lebanon in regaining the nation's territorial integrity.