World Bank to set up Lebanon trust fund by end-year

     
The World Bank will set up a trust fund to raise hundreds of millions of dollars to help Lebanon bear the cost of hosting a human wave of refugees from Syria, the bank's regional director said on Friday.          

The trust fund will seek to attract $300 million to $400 million in donations for the most urgent priorities, including education and poverty reduction, World Bank Middle East director Ferid Belhaj said.            

"The trust fund is now being put together as we speak and  should be up and running within four to six weeks," he told Reuters in his office in central Beirut.            

Lebanon, the smallest of Syria's neighbors with a population of just 4 million, has the largest Syrian refugee population - the United Nations puts the figure at 800,000 but the World Bank says it is over 1 million, and growing.           

The refugee influx has burdened its already strained infrastructure and services, and is set to cost the country $2.6 billion in lost revenue and extra expenditure over a three-year period, according to a report compiled by the bank.            

The establishment of a fund overseen by the bank is aimed in part at overcoming Western aversion to giving money directly to Lebanon's caretaker government.   

The government, which includes ministers from Hezbollah - designated a terrorist organisation by Washington and its allies - says the reluctance to offer bilateral support is politically motivated.            

Paralysed by a political stalemate which has stopped the parliament meeting for several months, the government was shaken this week by the arrest of the head of a state aid organisation on embezzlement charges.            

"Because it is run and managed by the bank, we need to make sure this (fund) is bullet-proof when it comes to its fiduciary dimension," Belhaj said. "And it is going to be bullet-proof."               

A meeting with representatives of potential donor countries last Friday secured sufficient pledges and signals of commitment for the bank to proceed with setting it up, he said.            

"Norway has pledged, the UK has given very strong signals, the Netherlands has pledged," Belhaj added, without specifying the amounts involved. "We are confident we will be getting money to start this trust fund".             


REUTERS