The World Bank Board of Directors discussed and endorsed today a new Country Assistance Strategy (CAS) for Lebanon covering the next four years (2006-2009). The Executive Directors expressed support and good will towards Lebanon in its efforts to address macroeconomic, governance, and social challenges. They welcomed the emphasis on growth and social protection. They emphasized the importance of implementing structural reforms, and called on the Government and the Bank to enhance the country’s absorptive capacity of foreign finance projects.

The objective of the CAS is to help Lebanon transition from reconstruction to development. The CAS focuses on building efficient and accountable institutions to take Lebanon from the current macro-economic imbalances to fiscal stability; to address the social and environmental implications of this transition; and to lay the foundations for job creation and growth.

The CAS focuses on three pillars which reflect the country priorities: (i) governance for economic management and growth support; (ii) development of human capital and the mitigation of the poverty effects of transition; and (iii) resource and environmental management.

The CAS proposes a concessional lending program which could range from US$100 million up to US$700 million over the CAS period, depending on Lebanon’s ability to carry out fiscal and structural reforms, enhance the social safety net and poverty programs, and improve portfolio performance.

“This meeting represented a strong vote of confidence in Lebanon”, commented Joseph Saba, Country Director for Lebanon. “The Government recognizes the challenges that lie ahead, and has shown commitment to tackling them. What remains is to launch a national dialogue involving all branches of the Government and the society in working towards a social/economic recovery plan. Such a plan should address not only the short-term transition to macroeconomic stability, but also employment generation, social protection, and growth. The World Bank and other international donors and agencies stand ready to help”.

The CAS was based on broad consultations with the Government, Parliament, civil society organizations, development partners, the private sector and other stakeholders.

“This is a candid CAS, and the Government should be congratulated for agreeing to disclose it” said Omar Razzaz, Lebanon Country Manager. “It explores Lebanon’s strengths and future prospects, but it also analyses macro economic, financial, governance, and social challenges faced by the country. It does so out of a conviction that these challenges are not insurmountable and could indeed be overcome if the collective will exists.” The CAS is dedicated to the memory of the late Minister Basil Fuleihan, who led the early CAS discussions between the Government and the Bank.