France hosts conference to help hobbled Lebanon economy

PARIS (AP) — France opened an international conference on Friday devoted to helping debt-ridden Lebanon bring in funds and lay the groundwork to ensure the money is well spent in a country hit hard by the Syrian war next door.

Lebanese Prime Minister Saad Hariri outlined his country's grim situation as the gathering got underway, saying that his nation's stability is at stake.

"It is not the stability of Lebanon alone. This is the stability of the region and, therefore, of our world," Hariri said in his opening speech, warning that a collapse in Lebanon could ricochet throughout the Middle East and Europe.

Fears of economic collapse in Lebanon are mounting ahead of next month's parliamentary elections, the first in nine years.

French Foreign Minister Jean-Yves Le Drian told the conference the private sector "must play its role in this transformation."

Le Drian announced in his opening address that France would provide 400 million euros ($489.3 million) in loans below market rates and would gift Lebanon another 150 million euros ($183.5 million).

"In a Middle East shaken by crises and battered by civil wars, Lebanon remains a model of pluralism, tolerance and openness that we need," Le Drian said.

"But Lebanon is not an island," he added, stressing that as Lebanon has struggled with both regional and domestic crises, help from others has become imperative.

The conference is attended by 41 countries, numerous international organizations and private sector representatives.

The meeting is not a classic donors' conference, but meant to seek an investment plan around infrastructure, water and energy, delineate structural reforms, and mobilize the private sector, French officials have said. It is also expected to adopt a follow-up mechanism to accompany investment.

Hariri, pointing out the impact of the civil war in Syria, which began in March 2011, said for instance that growth dived from 8 percent to barely 1 percent.

Syria's conflict has, among other things, hindered land exports to Jordan, Iraq and oil-rich Gulf Arab countries. Lebanon is home to 1.2 million refugees — accounting for nearly a quarter of the country's population.

Rampant corruption has taken another kind of toll, hollowing out infrastructure and basic services, with frequent water and electricity cutoffs.

Last week, Lebanon's parliament approved a budget — its second since 2005 — with a fiscal deficit of $4.8 billion. The national debt at the end of 2017 stood at $80 billion, or more than 150 percent of gross domestic product.

French President Emmanuel Macron is to close the conference in late afternoon, along with Hariri. France has deep ties to Lebanon, a former protectorate.

The conference is the second in a series of three devoted to Lebanon. A February conference in Rome was devoted to defense, and a final conference on April 25 in Brussels will address aid to Lebanon to help it better cope with Syrian refugees.

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Mroue reported from Beirut.