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 Economic Health
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Paris III donors that reforms are on track
Posted on: 7/6/2007 11:57:00 AM

Ministers told ambassadors of donor countries Thursday that the government has made significant progress in implementing a large part of the pledged reforms and reiterated that the rest of the fiscal measures will be completed soon. The ambassadors, who met at the Grand Serail, were told that the tense political situation in the country will not deter the government from implementing the rest of the reforms.


"Despite the difficult conditions, we still believe we can do the job and push for the remaining reforms," said Finance Minister Jihad Azour.


Economy and Trade Minister Sami Haddad said the government is also keen to focus on social issues, adding that the government will explain to the public the stages of reforms which have already been completed.


Central Bank Governor Riad Salameh reiterated that the monetary situation in Lebanon remains stable, adding that the dollarization in Lebanese banks is currently 76 percent of total bank deposits.


"Bank deposits now stand at $67 billion with an annual growth of 8 percent a year," Salameh told the ambassadors.


Salameh added that thanks to the capital inflows, the balance of payments in May alone recorded a surplus of $400 million.


He said the Central Bank adopted extra measures to allow the government to implement the goals of Paris III reforms.


"We have subsidized soft loans to the private sector and rescheduled the debts to help merchants who were affected by the July-August war on Lebanon in 2006," the governor added.


Azour summarized the progress report of the Paris III donor conference which took place in January 2007.


The report said that of the total $7.613 billion pledged in the Paris III Conference, 67 percent is estimated to be for project financing, budgetary support, balance of payment support and technical assistance channeled through the government.


Over $1 billion are expected to be received in 2007, of which $177 million have been transferred to date.


The report added that several agreements to provide support to the private sector have been reached with local intermediaries, making $762 million in credit available to small and medium enterprises (SMEs.)


It stressed that discussions with donors have provided a clearer picture regarding sector allocation of funds.


"The power and social sectors were a focus of many donors as per the priorities set by the government," the summary of the report added.


The report said a fact-finding mission from the International Monetary Fund concluded that the government's economic and fiscal reforms are on track despite political problems.


"The government has achieved significant progress in setting up the institutional structure to implement and monitor the reform program. The Program Coordination Office and the three Inter-Ministerial Committees (Social, Economic and Infrastructure and Privatization) were formed and commenced their activities," the report said.


It added that ministries and public institutions have progressed in the implementation of the reform program. "To date, 64 reform initiatives have been launched and implemented and another 41 are expected to be launched during the third quarter of 2007," the report said.


The government is supposed to privatize the cellular networks in the third quarter of 2007 but there is some concern that the Cabinet may not be able to meet this target on time due to the controversial presidential polls expected to be held in October. (Daily Star)


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