Question for the Record Submitted to Answer Incorporates Information as of June 25, 1997 Lebanon Question 31: Since Syrian and Lebanese electricity grids and roads are linked, does the Administration believe that any of these funds will benefit the Syrian economy, even indirectly? What other infrastructure elements in Lebanon are combined with Syria's? Answer: U.S. policy and the level of U.S. assistance to Lebanon is aimed at the rehabilitation of rural communities, the modernization of parliament and central agencies and alleviating environmental problems. We also support American-system universities in Lebanon: the American University of Beirut and the Lebanese American University. U.S. economic and institutional assistance is channeled through American PVOS and educational institutions. After an absence of many years, a USAID representative returned to Question for the Record Submitted to Answer Incorporates Information as of June 25, 1997 Lebanon Question 32: Will Lebanon be able to attract the capital necessary to rebuild the country along the lines envisioned by Solidere? Is there any evidence that the Lebanese who went gone abroad are ready to return to the country of their birth? Are overseas Lebanese investors still keeping their money in foreign banks, or are they investing in Lebanon? What is a realistic estimate of the amount of money the overseas Lebanese community will invest in Lebanon's reconstruction? Answer: The government of Lebanon has been able to raise needed capital by tapping into international capital markets, though there are indications its borrowing is putting some strain on its fiscal condition. Solidere recently made a “decision to allow foreign investors to purchase shares in the company, thus substantially increasing the amount of investment capital available to it. There is evidence that overseas Lebanese are investing large amounts in business and reconstruction in Lebanon - estimates for these inflows are as high as $4.5 billion in 1996. Question for the Record Submitted to Answer Incorporates Information as of June 25, 1997 Lebanon Question 33 Do the local militias still control elements of the economy, or has the central government reestablished its control? Answer: The government of Lebanon has reasserted its authority in most areas of the country. We support Lebanon in its actions in this regard. Question for the Record Submitted to June 25, 1997 Answer Incorporates Information as of June 25, 1997 Lebanon Question 34: Will Lebanon's growing debt become a burden on the budget? Is the Prime Minister correct when he states that the domestic debt is not a problem? Can Lebanon reduce the budget deficit to manageable levels? Answer: While it is true that Lebanon's fiscal condition is not as healthy as it could be, Prime Minister Hariri has said he is taking steps to address these questions. The GOL has been restructuring its debt service burden by borrowing overseas at lower interest rates and longer maturities than those available domestically. The continued strong growth of the Lebanese economy will ease the burden of future debt payments. Nevertheless, the GOL will likely need to restrain expenditures and restructure the tax system to enhance revenues. Question for the Record Submitted to Answer Incorporates Information as of June 25, 1997 Lebanon Question 35: Before the civil war, Lebanon had a large and energetic middle class, which was the backbone of Lebanon's merchant tradition. During the war, many members of the middle class emigrated abroad to escape the conflict. Others found that their standard of living had eroded. Has the war had the effect of widening the gap between rich and poor? How do you assess the economic health of all of Lebanon's socio-economic groups? Answer: We note that the economy of Lebanon has continued to grow, though recently at rates lower than historical averages. We are not in a position to estimate the economic condition of various strata within Lebanese society. |