Friday, July 18, 2008

Where does the money go?

Daily Star-BEIRUT: "The European Commission will continue to provide financial aid to Lebanon under the European Neighborhood Policy with a grant of 42 million euros ($66.6 million) during the upcoming year, a statement issued by the commission said on Thursday. As part of the 2008 Action Program, the European Commission is allocating money among the private sector, local development in North Lebanon and the Lebanese justice system.

The 2008 Action Program aims to target the money at specific priorities in the three sectors in hopes of providing sustainable development. A grant of 14 million euros will aim to strengthen the competitiveness of the private sector through improved financial instruments in order to encourage innovation and strengthen the national quality management system.

The Commission is allocating 18 million euros for sustainable development in northern Lebanon. This will include developing agriculture and environment sectors and the infrastructure, as well as improving the economic situation of Palestinian refugees. Finally, 10 million euros will be directed toward improving the Lebanese justice system through information technology and training from the Judiciary Studies Institute."

Eighteen million Euros from here, 14 millions from there, and no one to ask the question: where does all the money go? How is it spent? Are there any significant changes resulting from similar previous investments? Is the money recouped? What is the basis for the investment? And who are the middle men? Let me ask an even simpler question: What was the rate of return of the (now ending) Agriculture Development Project, also EU funded to the tune of 15 million Euros? 15 millions!!! Did it generate 15 million Euros in revenue for the agriculture sector? Did it generate 1 million Euros? The project was supposed to enhance exports to Europe as part of the Eurotrade deal, did it?

Of course, the reports and evaluations of these project will indicate overwhelmingly that these initiatives have been successful. How come then poverty is increasing in rural areas? How come small farmers find it increasingly difficult to continue practicing agriculture?

The Lebanese state has a long history of relying on foreign aid to develop the farm sector. It does not work. Simply because the quantity of foreign aid available, in spite of sounding very large, is in reality tiny compared to the needs: 15 million Euros, at the end of the day, amount to about 4 Euro per Lebanese citizen or to 75 Euros per Lebanese farmer. And that is before you discount operational costs, staff and overheads, which will easily eat up 50-70% of the total sum. Moreover, in the absence of clear agriculture policies by the Lebanese state and of a strategic direction and of a detailed plan of action, foreign aid happens according to the whims of the donors and is dependent on the vagaries of their political agendas.

Incidentally, on the same day as the EU was announcing its generous financing plans, George Inati, the head of the agriculture section of the General Labor Union asked the newly formed government to take into account the following issues in the new governmental plans: 1. Consider agriculture as an important productive sector and to increase the ministry's budget share from the current 0.3% to 10% noting that the share of the budget in many countries of the neighborhood is 20%. 2. Ensure that aid is received directly by the farmer and is not hijacked by middle men. 3. Fight corruption first in the government's offices. 4. Develop a strategic plan for water use, and construct small dams and mountain lakes. 5. Protect national production. 6. Implement the anti-dumping law. 7. Create farmers markets where the producers can sell directly to the consumers. 8. Protect Lebanon's forests from felling, fire and urban sprawl.

Could work as a starting point for a rebirth of agriculture, environment and rural society.

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