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French Version

Luring foreign investment back won't be easy

"Investors will think twice before making any investments in Lebanon even if a cease-fire is reached with Israel," a leading Lebanese businessman said Wednesday. Adnan Kassar, a former minister and a prominent business figure, was one of many businessmen and bankers who voiced anger at the situation.

The massive Israeli air, ground and naval attacks on Lebanon following the abduction of two Israeli soldiers by Hizbullah has left over 300 civilians killed and 1,000 wounded.

In addition, the endless attacks did not spare bridges, highways, schools, hospitals, residential buildings, factories and ambulances.

This stark reality made many business leaders and investors ask how long Lebanon can pay the price of a war with Israel.

Some businessmen believe that the only way to end the conflict is to let the Lebanese Army deploy along the border with Israel.

"Investors are very worried because they fear that Lebanon will have a war with Israel every few years. This should stop," Kassar told The Daily Star.

Other businessmen expressed similar views.

"The government must be in full charge of all of Lebanon and there should be only one army," said Fouad al-Khazen, president of the Contractors Syndicate.

Lebanon was pinning high hopes on a prosperous year for tourism this summer as over 1.6 million tourists and visitors from the Arab states and Europe were expected to arrive.

The Finance Ministry and the Central Bank projected GDP growth of 5 percent in 2006 as Gulf companies made over $1.5 billion in real estate investments in the first five months alone.

The government also hammered out a bold economic reform program that aims to cut the $40 billion public debt and turn the economy around.

It is difficult to estimate the value of property destruction due to the continuous fighting.

"No one knows for sure how much the reconstruction will cost Lebanon. It may be $1 billion or even $3 billion. But if the bombardment continues then the costs will be horrific," Kassar said.

Late former Prime Minister Rafik Hariri spearheaded an ambitious reconstruction drive the moment he took office in 1992. Economists estimate the costs of reconstruction at over $5.5 billion, including Rafik Hariri International Airport, highways, schools and hospitals.

Officials say that donor states and oil-rich Arab countries will not abandon Lebanon but wonder if this assistance will be free or conditional.

"The donor states will tell the government that the army must be deployed along the border and that Hizbullah must hand over their weapons before receiving any financial aid in the future," one banker said.

He added that the United States and Europe will not accept the status quo any more.

"Lebanon is at an important juncture. Either the government takes full charge of the situation or the country will be left on its own without any help," the banker said.

Khazen said that no one is counting the cost of destruction as long as people are being killed senselessly.

But most investors and bankers stress that the Israeli military action will make matters worse and only a political dialogue can persuade Hizbullah to allow the army take over full responsibility for security.

Beirut 20-07-2006
Osama Habib
The Daily Star

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