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IMF Approves $77 Million Loan for Lebanon; Larger Aid on Hold

The International Monetary Fund Monday approved an emergency $77 million loan for Lebanon, a move that opens the way for bigger reconstruction aid from the World Bank and individual countries. VOA's Barry Wood has more on the financial assistance intended to help rebuild Lebanon from the 34-day war with Israel last year.

The loan is seen as an international vote of confidence for Lebanon's fragile government. The three-year loan is being disbursed immediately and could be followed by a much larger IMF credit next year.

The delivery of a $7.6 billion in aid pledged by donor governments in Paris in January is being held up by a parliamentary dispute in Beirut.

IMF Middle East department chief Mohsin Khan explains.

"Many of these loan agreements - not with us - but the other loan agreements have to approved by parliament and parliament hasn't been convened," he said. "So right now there is a stalemate, if you like, or a deadlock."

Khan says the IMF believes Lebanon's government and the opposition are close to an agreement that would allow parliament to approve the loan agreements. Most of the stalled assistance would come from Saudi Arabia, oil-rich Arab countries, the European Union and the United States.

Lebanon suffered some $3.5 billion worth of damage in last year's war between Hezbollah guerrillas and Israel. Because of the conflict, foreign investment, tourism and remittances from abroad are sharply down. Lebanon's foreign debt is large.

The IMF program for Lebanon aims to reduce the country's debt and assist in privatization, particularly in telecommunications and electricity.