Lebanon's ailing economy urgently needs world financial aid, reforms and an end to political rows in order to overcome the devastation of this summer's war, Lebanese Finance Minister Jihad Azour said.
Azour said that Lebanon had high expectations from the international donors' conference due to be held "by the end of November" in a venue still to be decided.
He said Lebanon's growth rate, "which we had expected to be six percent this year will be negative" because of the war, but that the situation should improve next year.
"We have to reactivate growth very quickly, not through public spending but with new investments, private consumption and the liberalization of a number of sectors," he said on Friday.
Azour said among the new projects was setting up a regional financial center in Beirut to service Lebanon and at least Syria, Iraq, Jordan and Egypt as "the Levant market is not served properly, in terms of trade finance."
"We want to go beyond the traditional banking sector, to develop equity funds, investment funds [and] private banking ... [which] will help promote economic activities and improve revenues in Lebanon," he said.
The November conference is meant to win long-term financial assistance to help the country recover from Israel's 34-day war against Hezbollah that caused damage of more than US$3.5 billion.
In August, donor nations pledged US$940 million in emergency aid to help rebuild smashed infrastructure, shelter the homeless and remove unexploded ordnance.
Even before the war erupted, Lebanon's economy had been burdened by a gigantic public debt -- amounting to 180 percent of domestic product. Most of that was due to rebuilding efforts after the devastating 1975-1990 civil war.
"The cost of war on public finances is about US$1.5 billion for [this year], which will raise public debt to US$41 billion at the end of the year," Azour said.
"Lebanon needs international assistance, and this assistance should be in the form of grants."
Azour said financial assistance was also being sought for the private sector, which suffered material damage and major loss of earnings due to the war, forcing companies to lay off staff.
"We are negotiating with various international institutions, and already we have secured US$700 [million] to US$1 billion of new financing to the private sector -- long-term with low interest rates," he said.
But "putting money in Lebanon without reforms is for me a big waste. There are several structural things to do, liberalize the economy, start privatizations," he said, naming the telecommunication and transportation sectors in particular.
The war hit Lebanon when its economy was just taking off.
"The balance of payments, which was showing a deficit of US$1.5 billion in June [last year], showed a surplus of US$2.5 billion in June [this year]."
"Exports were expected to grow by 40 percent, we were expecting more than US$5 billion of foreign direct investments in Lebanon this year and tourism was supposed to see its best year," he said.
"It is the right time to have a new start for Lebanon," he said.