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 Economic Health
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Economic and Social Impact Assessment
Posted on: 3/22/2007 12:01:00 PM

At the Government's request, the World Bank prepared an Economic and Social Impact Assessment (ESIA) of the recent hostilities to provide an analytical basis to underpin a medium-term reform program. A large multi-sectoral team undertook an assessment of the impact of the hostilities and an analysis of macro and structural reform priorities for the future. The ESIA sets out an overall framework including: i) an assessment of the prevailing macroeconomic challenges and the complexities added to it by the physical, social and economic impact of the hostilities; ii) the elements of a coherent reform program; iii) the role of the donors and iv) the importance of building consensus around and support of the reform.  The process involved intensive consultations with government officials, the private sector and other stakeholders in Lebanon.  It also involved close collaboration with several donors, and in particular with the EU team that prepared a comprehensive impact assessment of hostilities-related damages. The draft assessment was presented to the government at the end of November 2006 and has been an important input into the preparation of the government’s reform program presented early January 2007. A final draft of the summary volume has been released to donors and stakeholders on January 20, 2007.


The analysis in the ESIA provides a starting point for Government and stakeholder consultations on developing and adopting a comprehensive short-term recovery plan and a credible strategy for medium and longer-term sustainable growth.  From an economy-wide perspective, this will require very substantial trade-offs among worthy objectives and a disciplined medium-term financing framework if the strategy is to avoid worsening the fiscal situation and undermining growth and social spending. The dilemma presented to the Government by this set of circumstances is a difficult one.  While the reforms discussed in the ESIA provide guidance on focus and priorities, it is the prerogative and responsibility of the Government to develop a coherent, actionable strategy, which can be supported by donors.   The report also concludes that the success of the reform process should build credibility and confidence, requiring broad-based support for the reform agenda based on the public’s understanding that its burdens and benefits are shared equally.


The ESIA has already had an impact on government deliberations and formulation of its Paris III paper. The Ministry of Finance organized nine sectoral consultations with other ministries and key stakeholders and donors in the months of October and November 2006, in order to generate a consensus around the reform priorities in these sectors. This informed the preparation of the Government’s Paris III paper, particularly in the electricity sector. The Bank sectoral experts presented the issues and recommendations as a basis for these consultations.


Moreover, the Government held additional sectoral consultations during January 15-17, 2007 on 6 key priority structural and social sectors, in order to define a reform action plan in the short and medium terms. These are meant to augment the Paris III paper, and strengthen it in these areas. The Prime Minister and several ministers announced the results of these workshops in a press conference on January 22, 2007. (World Bank)


2007 Presidency of the Council of Ministers. All Rights Reserved.
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