World Bank plans doubling Investments in Lebanon

The World Bank plans to double its investments in Lebanon by 2020 though an official decision has yet to be taken in this regard, the bank’s newly appointed MENA region vice president told The Daily Star on Wednesday.

Hafez Ghanem said the World Bank plans to invest an annual $300 million in Lebanon in the next four years, bringing the total amount of dispatched funds close to $2.3 billion.

The World Bank’s portfolio in Lebanon currently stands at $1.1 billion, including a $474 million loan to finance the development of a dam project aimed at addressing shortages in water supply to over half of the country’s population.

The loan agreement has yet to be ratified by Parliament, which has failed to convene in recent months due to political bickering between major parliamentary blocs.

Ghanem said the earlier Parliament ratifies the loan, the more likely his team will be able to quickly secure the official approval of the World Bank’s board of directors on future investments in Lebanon.

Domestic bickering over key political issues, such as the election of a president, have blocked legislative work for long periods over the past few years.

This has resulted in the delay of several vital infrastructure projects including the Bisri dam, which the World Bank has approved to finance through a loan repayable over 20 years. The loan agreement has to be ratified before July 21, 2015.

Earlier in the day, Ghanem discussed the need to swiftly ratify the loan agreement with Parliament Speaker Nabih Berri. Prior to his meeting with Berri, Ghanem held talks with Prime Minister Tammam Salam and both the finance and economy ministers.

Ghanem said Lebanese officials sought the support of the World Bank in a number of fields, including the electricity, health and education sectors.

The World Bank is also committed to supporting Lebanon in coping with the large influx of Syrian refugees, Ghanem said.

Lebanon is in need of close to $1 billion to finance urgent projects aimed at supporting host communities that are reeling under the increasing burden of around 1.6 million Syrian refugees.

The World Bank has established a multi-donor trust fund for this purpose but only a total of $75 million has been secured in donations so far.

Ghanem said the World Bank team in Lebanon is stepping up its efforts to secure further donations to help Lebanon weather the burden of the Syrian crisis.

According to the World Bank estimates, the Syrian crisis had depressed government revenue collection by some $1.5 billion while increasing state expenditures by $1.1 billion, with a total fiscal impact of $2.6 billion over a three-year period from 2012 to 2014.

Lebanese government officials have repeatedly warned that the situation in Lebanon has gone way beyond a humanitarian crisis and failure to take action would threaten the country’s stability.

Ghanem said the World Bank is seeking to contribute to the promotion of stability through its investment in sustainable economic development across the MENA region.

Source: The Daily Star