Foreign assistance played a vital role in post-war Lebanon: report

Lebanon Economy
2023-03-10 | 07:54
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Foreign assistance played a vital role in post-war Lebanon: report
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Foreign assistance played a vital role in post-war Lebanon: report

For years, Lebanon received billions of US dollars in foreign aid, which became significant in building the country after a 15-years civil war.  
 
According to a report by The Policy Initiative, foreign aid provided by international agencies, governments, and affiliated institutions, is aimed at supporting areas where the government’s resources are inadequate, including reconstruction, infrastructure improvement, strengthening of security institutions, and humanitarian assistance.  

The article, the first in a series that analyzes new datasets of loans and grants that Lebanon’s parliaments and governments accepted after the civil war, shows that during post-war Lebanon, dominated by the late Prime Minister Rafiq Hariri, assistance consisted mostly of loan agreements.

In contrast, assistance also changed according to presidential tenures. During Michel Aoun’s presidency, the country received the fewest grants compared to all other post-war presidential terms, The Policy Initiative reported.  

The report pointed out that in the period between 1991 to 2022, the Lebanese governments signed 714 agreements to receive development assistance, amounting to around $22.6 billion, 40 percent were grants, while the other 60 percent were loans.   

Additionally, between Rafiq Hariri’s assassination in 2005 and the outbreak of the Syrian civil war in 2011, loan agreements amounted to about $2 billion, matched by an equal amount in grants.  
 
In 2016, the pattern changed, and International donors became stricter, demanding reforms as a precondition for assistance and reducing the overall amount to $2 billion.  

“As the number of agreements dropped from 74 in 2014 to only three in 2020, assistance instead shifted to humanitarian operations to address the fallout of the crisis […] Donor programs became “people-centered” and increasingly aimed at providing targeted support in the form of in-kind contributions or direct support to non-governmental institutions,” the report continued.  

Furthermore, under President Michel Sleiman’s tenure, the Lebanese governments solicited more than $4 billion in grants. In contrast, during the presidency of President Elias Hrawi (1989-1998) and President Emile Lahoud (1998-2007), “governments signed the most loan agreements in the post-war era.”  

While during President Michel Aoun’s tenure, Lebanon solicited minor international assistance. According to the report, “the share of loans to grants was more than 80 percent, almost as high as during the tenure of Hrawi after the civil war (almost 90 percent).”  

It concluded by saying that due to the importance of international assistance to the country’s political economy, especially in the current crisis, aid would be necessary to provide resources, which the country’s governments “will lack for years to come.”
 

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