Home  Business Report downgrades estimate of direct war losses |
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Report downgrades estimate of direct war losses |
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Written by Daily Star
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Azour: "Public debt would reach more than $41 billion in 2006, or 190 percent of the country's GDP"
Nov. 25, 2006- A government report said on Friday that total direct costs to Lebanon from the war of this past summer were $2.8 billion - $800 million less than an earlier estimate. Shortly after the August 14 cessation of hostilities, the Council for Development and Reconstruction estimated direct material losses at $3.6 billion.
The new government report, which was issued by Prime Minister Fouad Siniora's office, said the Israeli bombardment likely would cause GDP growth to fall to close to zero - a drop of 4-5 percent - by the end of the year.
Lebanon was hoping to record GDP growth of 6 percent in 2006 based on a projected influx of tourists, surge in exports and increase in foreign direct investment.
The Tourism Ministry expected more than 1.6 million visitors to come to Lebanon in the summer season alone, generating revenues of $3 billion.
Treasury revenues during the conflict fell by $1.6 billion, the report said.
"For the first time in six years, the Treasury will suffer a deficit in the primary surplus of $778 million, although the ministry was expecting a surplus of $827 million at the end of 2006," the report said.
It added that this drop in revenues and increase in spending will cause the budget deficit to reach $3.5 billion in 2006, twice the deficit of 2005.
Finance Minister Jihad Azour earlier said that the public debt would reach more than $41 billion in 2006, or 190 percent of the country's GDP.
The report gave a breakdown of all destroyed infrastructure, including bridges, highways, electricity and residential units.
Israel bombed bridges throughout the country under the pretext of cutting supply routes to Hizbullah fighters.
The report said that the government would distribute all funds that were donated by the Arab states and the West for rebuilding houses and infrastructure that was destroyed by the Israeli bombardment.
"The reconstruction drive will stimulate some sectors of the economy, such as the contracting and engineering sectors," the report said.
The government report also said that 1,200 Lebanese had been killed in the July war and that 4,400 were wounded.
Sharp political differences, the resignation of six Cabinet ministers in mid-November and the assassination of Industry Minister Pierre Gemayel on Tuesday have impeded government attempts to put the country back on track.
Saudi Arabia and Kuwait have pledged $500 million and $300 million, respectively, for reconstruction in Lebanon
In addition, the donor states at a Stockholm conference two months ago pledged $940 million for Lebanon.
The government said that it will soon hand out checks for all those who lost their houses during the war.
Qatar and the UAE distributed checks to the residents of villages in the south last month and Saudi Arabia and Kuwait are expected to follow suit.
By Osama Habib
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Madness takes over Lebanon.
Militants are fighting in the streets of Beirut. Military guns are on both sides. What is the prospect of such a situation. Aren't the Lebanese fed-up with wars?
23 November 2007
Lebanese President Emile Lahoud left the Baabda presidential palace without handing over the power to a new president. This is the first time since independence in 1943. |
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