Aid oversight: Why are the US, Saudi Arabia, and IMF focused on Lebanon's Reconstruction Council leadership?

Report by Maroun Nassif, English adaptation by Yasmine Jaroudi  

The United States, Saudi Arabia, and the International Monetary Fund (IMF) have placed significant emphasis on appointing a new president and board for Lebanon's Council for Development and Reconstruction (CDR). 

According to experts monitoring the issue, this push serves two main purposes: ensuring a unified Lebanese body oversees reconstruction efforts following Israel's recent military campaign and preventing a repeat of the 2006 war's fragmented aid distribution.

In the aftermath of the 2006 war, reconstruction responsibilities were divided among multiple entities. Hezbollah's Waad Foundation led rebuilding efforts in Beirut's southern suburbs, relying on funding from Iran, Saudi Arabia, Kuwait, Oman, and the Lebanese government. 

In South Lebanon and western Bekaa, aid distribution was managed by the Higher Relief Commission, the South Lebanon Council, and municipalities largely controlled by Hezbollah and Amal Movement. 

Meanwhile, CDR handled infrastructure projects such as bridges, roads, water and electricity networks, hospitals, schools, and agricultural land restoration. Its role included commissioning infrastructure rehabilitation with funding from Kuwait and Saudi Arabia and supervising in-kind grants from Lebanese businesses and entrepreneurs, including projects like the Casino Bridge and the Mudeirej Bridge. 

The decentralized and overlapping responsibilities for reconstruction aid in 2006 led to significant mismanagement and corruption, raising concerns in Washington that Hezbollah had used relief funds to rebuild its military infrastructure in South Lebanon. This concern has fueled the current international push to restructure CDR's leadership.

However, international stakeholders, including the IMF, must recognize that CDR—established in 1977 under President Elias Sarkis—gained unchecked authority with the rise of Prime Minister Rafic Hariri. 

The council plans projects, drafts terms of reference, conducts tenders, and oversees implementation, all while being subject only to post-completion audits by Lebanon's Court of Audit, rather than preemptive oversight. These extensive powers, combined with the lack of regulatory checks, have led to legal action on charges of repeated allegations of corruption, financial mismanagement, and favoritism in awarding contracts.

Addressing corruption within CDR requires more than just leadership changes. 

Experts argue that meaningful reform must involve either reinstating the Ministry of Planning, which was abolished when CDR was created or amending the council's governing decree to curb its authority and enforce stricter oversight mechanisms.