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Lebanon
The Development Challenge: This year witnessed significant events taking place in the region that have had a tremendous impact on Lebanon. The Iraqi war and increased violence in West Bank/Gaza as well as worldwide terrorist actions have created an atmosphere of tension. The Iraqi market was an important market for Lebanese industrialists. Losing this avenue has added to the economic stagnation felt here. Internally, the security situation near the southern borders with Israel remained guardedly quiet, with only scattered clashes and disruptions. Politically, tensions continue to mount in the run up to the 2004 presidential elections. The divisiveness that is inherent in Lebanon's confessional system of government contributes to neighboring Syria's continued ability to intervene in the political affairs of the country.
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As a result, the economic situation in Lebanon continues to be unfavorable, leading to widening disparities between the rich and the poor, increased rates of unemployment (around 20%), and weak marketing of industrial and agricultural products. The countries external debt has reached $32.6 billion and has forced the government to dedicate approximately 70% of its public revenues to service the public debt instead of financing public services. The environment in Lebanon is in a deteriorating state due to years of neglect. Perspectives on environmental protection and preservation have not progressed. This has resulted in polluted air, soil, rivers, and beaches, open dumping, and lack of control on industrial emissions. This is coupled with a lack of government investment in remedies. As a response to the challenges facing the country, the USAID program is helping the people of Lebanon improve their standard of living, protect their environment and health, and address their legal rights as citizens. It is also promoting humanitarian assistance.
USAID's key strengths are its flexibility and technical know how. Over the years, USAID has built a reputation as one of the most active donors in Lebanon and is viewed by many as having one of the more responsive and targeted programs, though far from the largest. The Mission attributes this to following:
- Promotion of equitable and sustainable development in Lebanon over the long-term;
- Programs that are demand driven and focus on the average citizen;
- Highly skilled and experienced group of partners (NGOs, foundations, universities, and business associations) capable of operating effectively at high government levels as well as at the community level; and
- Procedures that demonstrate efficiency by channeling funding directly to implementing partners in contrast with other donors.
USAID is contributing to the USG policy priorities of promoting democratic principles and free economies through investing in people. The program is increasing the capacity of the Lebanese people by strengthening their local institutions, providing them with economic opportunities, and improving their environment.
The USAID Program: The USAID/Lebanon programs address the economic, political and environmental challenges the country is facing. They concentrate on improving living standards by revitalizing and expanding economic opportunities for small entrepreneurs and disadvantaged, mine-affected people, encouraging trade and investment with WTO accession, strengthening American educational institutions, and building the capacities of indigenous groups. Also they aim to improve environmental policies and practices by developing appropriate waste management practices, creating environmental awareness, and promoting water sector restructuring and efficient water management. Finally, USAID continues to encourage good governance and transparent practices by strengthening municipalities all over Lebanon and providing assistance to civil society groups' advocacy programs. As a cross-cutting theme, USAID will continue to increase awareness of landmine-affected areas and prevention practices.
In the coming year, the Middle East Partnership Initiative (MEPI), managed by the Department of State, is proposing to conduct a review of the entire USAID program to ensure that the planned programs in the area of economic, political and education reform are aligned with the policy objectives of MEPI. To date MEPI has included Lebanon in regional MEPI programs but does not have any specific bilateral programs in the country.
Other Program Elements: Lebanon has been included in regional MEPI programs. It also benefits from the Leahy War Victims Fund for a number of mine action activities, chief of which is a "resource cooperative" aimed at creating economic opportunities for mine-injured survivors and their families in the southern district of Jizzine, Lebanon's most heavily-mined and casualty afflicted area.
Other Donors: Donor coordination in Lebanon is active, with bi-monthly meetings devoted to addressing common issues and providing an opportunity for each donor to present its program. The most recent UNDP reports list Arab countries as the main source of Lebanon's external funding, led by the Kuwait Fund for Arab Economic Development (transport infrastructure); the Arab Fund for Economic and Social Development (human resource development, energy); the United Arab Emirates (demining); Saudi Arabia (infrastructure, social services); and the Islamic Development Bank (infrastructure). Also active are the World Bank (broad-based development); the EU (training and capacity building, administrative development, rural development, trade); France (technical cooperation, water and waste water, training); UN organizations (broad-based development); Italy (agriculture, infrastructure, water and waste water), Canada (development administration, economic management), and Norway (technical cooperation, social services, mine awareness). Most of the funding comes in the form of loans or soft loans that are channeled to the Council of Development and Reconstruction and approved by the Council of Ministers in contrast to the USAID assistance, which is totally channeled to the NGO community and the private sector in the form of grants. USAID assistance, ranking approximately 10th in resources, is among the top three donors in aggregate spending. USAID's main donor partners are the World Bank, the EU, Italy and UNDP for rural development, agriculture and environment; the EU, Italy and UNDP for administrative reform and municipal development; the EU for trade (Euro-Med and WTO agreements); and the French Development Agency for water resources management.
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