BEIRUT: Lebanon’s government should reach an agreement with the World Bank before the end of the month over the establishment of a multidonor trust fund to support local communities hosting Syrian refugees, Ferid Belhaj, director of the Middle East Department at the World Bank said.
“Hopefully, we will reach an agreement on the establishment of the trust fund before the meeting of the international support group for Lebanon in Paris on March 5,” he told The Daily Star.
The trust fund, which will be under the management of the World Bank, will comprise a steering and a technical committee, Belhaj said.
The steering committee, which will decide on broad strategic issues, will include representatives of the Lebanese government, the World Bank and U.N. organizations among other agencies.
The technical committee, which will decide on the specifics of each project, will include in addition to representatives of international groups delegates from concerned Lebanese ministries such as Finance, Education, Health and Social Affairs.
“Donors are ready to commit funds to support Lebanon but the mechanism to channel those funds has yet to be ratified,” Belhaj said.
The failure of Lebanon to form a new Cabinet until last week has delayed the establishment of the multidonor trust fund, sources have earlier told The Daily Star. Western donor countries were reluctant to commit any aid to Lebanon under the previous caretaker government amid the lack of political stability, the sources added.
Belhaj said he had yet to meet with members of the new Cabinet, adding that he would do so within the next few days.
“As of today, the World Bank has three projects ready for implementation and only awaits the Cabinet’s approval,” he said on the sidelines of the “Business Opportunities in Lebanon” conference held at the Phoenicia hotel in Beirut.
The three projects are aimed at supporting small and medium enterprises, the telecom sector and cultural projects.
Besides seeking to set up the multidonor trust fund, the World Bank has been looking into supporting Lebanon through quick-dispersing platforms that it has already established in the country such as the Second Education Development project.
A World Bank report released in 2013 said the Syrian crisis had depressed government revenue collection by some $1.5 billion while increasing state expenditures by $1.1 billion due to the surge in demand for public services, with a total fiscal impact of $2.6 billion over three-year period from 2012 to 2014.
According to the latest weekly update by the United Nations High Commissioner for Refugees, the number of refugees from the Syrian conflict in Lebanon stood at around 930,000, or nearly 22 percent of the country’s population.
The influx of Syrian refugees is forecast to increase labor supply by between 30 and 50 percent, with the largest impact on women and youth.
The World Bank forecasts that the unemployment rate would increase by nearly twofold to reach 20 percent in 2014, putting an additional 220,000-324,000 Lebanese, primarily women and unskilled youths, out of work.
Some $1.4 billion to $1.6 billion would be needed for stabilization, according to the World Bank estimates which forecasts the cost of the health, education and social safety net to range between $308 million and $340 million.