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French Version

Lebanon : Lebanon readies for fallout of UN report on Hariri killing

Finance Ministry plans to boost foreign currency reserves if government is implicated

Lebanese Finance Minister Jihad Azour said the government plans to boost its foreign currency reserves as a precautionary measure if the UN team investigating the assassination of former Prime Minister Rafik Hariri issues a report incriminating parts of the Lebanese government.

"We have taken all the measures to deal with any unforeseen situation. The flow of capital has eased the market and we have enough Lebanese pounds to meet our financial needs until the end of year," Azour told reporters.

The United Nations probe team headed by Detlev Mehlis is expected to issue findings on Hariri's murder in less than a month and many analysts fear that the report may incriminate influential politicians in the country.

"We are planning to secure enough foreign currency reserves to last us at least four to five months," Azour said.

The Central Bank's gross foreign currency reserves currently stands at more than $9.5 billion, not including the gold reserves that are valued at more than $4 billion.

The pressure on the Lebanese pound eased after the assassination of Hariri and the ensuing string of bomb attacks around Beirut.

But many Lebanese fear that the findings of the UN investigation may deal a blow to the economic reform efforts of the government which has yet to deal with the more than $36 billion public debt.

Azour also said that the Finance Ministry is currently negotiating with Arab Monetary Fund and the Islamic Bank to secure $300 million in soft loans that will be earmarked for the purchase of fuel oil.

He added that Kuwait agreed to give Lebanon a credit facility to buy oil.

"We have also contacted Qatar and other countries to provide us with oil. The government wants to buy oil from country to country instead of going through firms."

But Azour also said that the treasury will spend more than $800 million this year alone to cover the losses of Electricite du Liban, stressing that privatization of the state-owned companies is the best way to cut the waste.

"The purpose of privatization is to liberalize the vital sectors and improve the services."

The minister said that all those who will be laid off once their institutions are privatized will receive at least 45 months end-of-service benefits.

He added that the government plans to embark on a reconstruction program this year.

"We have agreed to pay $275 million as compensation for owners of lands that are marked down for projects," Azour said.

The Council for Development and Reconstruction said that it will submit a five-year plan to rebuild Lebanon.

Beirut,08 22 2005
Osama Habib
The Daily Star
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