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French Version

EU aid program helps stimulate economic recovery

Abbas Nehmeh stands in his barn surrounded by his five cows. Calmly stroking his white mustache, he explains how the summer 2006 war with Israel affected his livestock operation in Habboush, South Lebanon.

"I lost 50 percent of my livestock during this war," he says. "I came here every day I could during the war to keep feeding them, but some days the shelling was just too intense..." The cows that did survive suffered after-effects from the trauma of the bombing and stopped producing enough milk to keep the operation profitable. Nehmeh sold the surviving livestock and, with money from a loan he took out as part of the European Commission's (EC) "Support for Economic Growth and Reconstruction" aid program, bought new cows as an initial step toward reviving his farm.

Europe's 18-million euro ($23.64 million) program for reconstruction and economic development in South Lebanon was officially launched Wednesday at a news conference held in Aitaroun, outside Bint Jbeil, in South Lebanon.

The program is part of the 42-million euro aid package pledged by the European Union at the August 2006 Stockholm donor's conference. It was established at the recommendation of European experts who toured the South at the end of last summer's war to identify and evaluate the needs of the region.

On Wednesday, Patrick Laurent, ambassador and chief of the EC's mission in Lebanon, told The Daily Star that visiting South Lebanon was particularly interesting for him because of the volatility of the situation with Israel and the scope of the damage inflicted by the war.

"After this summer's war, the EU Commission adjusted its budget for 2006 in order to better serve the needs created by the war. Fifty million euros were dispatched to the EU's humanitarian aid agency, ECHO, to meet immediate post-war needs such as housing," he said.

"The importance of the aid subsequently pledged at both the Stockholm and the Paris III conference in January signals the equal focus the donors give to long-term economic growth and debt-relief."

At the Paris donor's conference on January 25, the international community pledged $7.6 billion in aid for Lebanon, including $3 billion from the EU. According to Laurent, the aid package featured to novel characteristics: the direct involvement of the International Monetary Fund in overseeing the transfer of funds, and a push for the creation of a national coordination organism in Lebanon to avoid the duplication of projects by the different countries involved in the reconstruction effort.

The "Support for Economic Growth and Reconstruction" program has two major areas

of operation. The first one aims at facilitating economic recovery and encouraging economic growth through the reconstruction of essential infrastructure such as water networks and public and agricultural buildings. It is administered by the Council for Development and Reconstruction (CDR) and is responsible for dispensing 12 million euros in aid.

"The different needs and priorities were determined by local committees over a period of six months," said Ismail Makki, head of the CDR's agriculture and environment department. "Their proposals were submitted to the EU experts for final validation and will be implemented independently from the municipalities."

One major project, valued at 8 million euros, will be the construction of a water-gathering network and water treatment plants in Zawtar, Yohmor and Kfar Sir. Mia Dubois Bou Said, EU coordinator for the project, told The Daily Star that "the innovation of this project is that it will connect remote houses with villages and the principal water-collecting axis, providing them with previously unavailable clean water access."

The second facet of the EC's "Support for Growth" program is financed at 6 million euros and focuses on developing human capital by stimulating economic recovery and growth.

It is based on a project started in 2002 by the CDR's Economic and Social Fund for Development that provides easy access to bank loans and has already allowed the development and creation of 1,650 businesses and 1,400 jobs in the fields of services, trading, industry and agriculture.

The EC program will facilitate access to new bank loans at preferential interest rates for entrepreneurs in war-damaged areas. Nehmeh, one of the program's beneficiaries, took out a 10,000-euro loan at 5.6 percent interest over five years.

The program also aims to allow seven municipalities to refurbish and reconstruct infrastructure, such as public buildings, by assisting with the acquisition of needed equipment. The program estimates that it could benefit 30,000 people.

The municipality of Aitaroun is one beneficiary. With a 300,000-euro prewar subsidy from the program, it was able to build a kindergarten, a center for agricultural development, an I.T. training center and a waste treatment plant. All were destroyed during this summer's war and the municipality has received additional funding under the new program to rehabilitate its facilities.

Marseille,02 27 2007
The Daily Star
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