International donors pledged over $7 billion in aid and loans at a Paris conference Thursday to raise money for Lebanon's government, French President Jacques Chirac said.

"The total sum collected for Lebanon amounts to a little more than $7.6 billion," Chirac told the conference.

High ranking representatives of more than 40 countries and organizations were attending the meeting, including Lebanese Prime Minister Fouad Siniora, U.S. Secretary of State Condoleezza Rice and United Nations Secretary-General Ban Ki-moon.

	Advertisement

Experts had predicted the funds offered - in the form of debt relief, low-cost loans and aid - will likely total $4 billion to $7 billion. That compares to Lebanon's $40 billion of state debt, equivalent to about 185 percent of its annual economic output.

Chirac, hosting the conference, called it courageous. World Bank President Paul Wolfowitz described it as ambitious, comprehensive and coherent. The Ban Ki-Moon urged donors to favorably and generously support the reform plan.

Chirac opened the one-day donors' conference, which brought together more than 30 nations, saying Lebanon needed generous support to overcome its economic woes following the "appalling clashes" in 2006.

"[Lebanon] is a country that is obstinately seeking rebirth and more than ever needs the unanimous support of the international community," Chirac told the conference.

"Your support will be essential in seeing Lebanon through," Siniora told the conference. "The cost of failure is too great to contemplate."

He added that Lebanon is on the verge of a deep recession.

Saudi Foreign Minister Prince Saud al-Faisal said his country would channel $1 billion in development funding and an additional $100 million grant for the Lebanese government.

Chirac said half of a new $650 million loan from France would be extended this year.

The European Commission, the EU's executive arm, pledged some $649 million in loans or aid.

Rice confirmed that the Bush administration would seek $770 million for a new comprehensive package of which a substantial part would be grants, not loans. That grants more than triple U.S. economic aid to Lebanon.

The money, which must be approved by Congress, would finance long-term redevelopment and immediate rebuilding from last year's devastating war between Hezbollah militants and Israel.

The president of the European Investment Bank, Philippe Maystadt, announced $1.2 billion in funds, while the Islamic Development Bank proposed $250 million.

World Bank President Paul Wolfowitz said the bank's total package would be about $1 billion, though it was not immediately clear whether this was all new aid or included previous pledges.

Britain also announced new funding of $48 million for a UN refugee agency.

The conference comes as Siniora's U.S.-backed government is locked in confrontation with Iranian-backed Hezbollah and its allies, struggling under mountains of debt and facing the task of rebuilding following last summer's 34-day conflict that left parts of southern Lebanon in ruins.

Rice and Siniora met for breakfast Thursday morning before the conference started. About 30 foreign ministers were expected to attend, along with the World Bank, the International Monetary Fund and the European Union.

Although they insist that aid will be for the entire country - not just for one man or his government - the United States and other donor nations back Siniora and say Lebanon must be defended from meddling by Iran and neighboring Syria, which occupied the country for nearly 30 years until 2005.

Siniora's critics said donors would worsen Lebanon's debt and be pouring good money after bad.

This week's clashes in Lebanon between pro- and anti-government factions harked back to the country's civil war days and offered a stark glimpse of how quickly events could spiral out of control if the confrontation between Siniora's government and Hezbollah and its allies is not resolved. Nationwide violence claimed three lives and injured more than 170 people on Tuesday.

Chirac warned that the violence could discourage donors.

"After Israel's onslaught on our country we are now on the edge of a deep recession," Siniora told the conference, adding that his government would stand firm against the Hezbollah-led protests and try to enact a planned financial reform.

He said the cost of failure would surpass the "cost of implementing success."

"The process of reconstruction must be a priority for the Lebanese people, but they need help in order to do it," British Foreign Secretary Margaret Beckett told reporters.

Some donors are likely to link their aid offers to Siniora's ability to push through his potentially unpopular reform package, which was unveiled this month and includes plans for privatizations, cutting state spending and hiking taxes.

"Even in times of great despair our determination has never diminished. We have faith in the people of Lebanon," Siniora said.

Hezbollah gained new public support in its war last summer with Israel and is thought to have given out many millions of dollars worth of aid to residents of areas devastated by the fighting. Western powers hope to counter that influence by pouring in more funding of their own.

No Hezbollah representatives were invited to the Paris event. France and other donors said they were working only with the elected Siniora government, and it was up to him to work with opponents at home.

The worsening political turmoil has also raised concerns that the government may be too paralyzed to fully rebuild even with newly injected funds.