A $4bn loan package from international donors to help Lebanon tackle its public debt and avert a financial crisis has received a mixed reaction.

Former Lebanese Finance Minister George Corm said the amount and conditions of the low-cost loans pledged at the Paris conference were unclear.

Donors

Saudi Arabia $700m France $500m European Investment Bank $500m Kuwait Investment Bank $500m Arab Development Fund $500m Malaysia $300m UAE $300m Kuwait $300m Italy $200m Bahrain $200m Canada $200m Arab Monetary Fund $100m Japan $100m Belgium $70m Oman $50m

"The sums lack transparency, and neither the conditions, the period and the process of utilising credits is clear, neither in the final statement of Paris II or in the table distributed to journalists," he said in a television interview.

Lebanon did not receive the $5bn it was counting on, because it has avoided International Monetary Fund (IMF) policies on privatisations and market liberalisation.

Economic troubles

Lebanon wants to cut the $3bn a year it spends on servicing more than $30bn in public debt, which represents half of its budget, or 18% of gross domestic product.

Prime Minister Rafiq Hariri told the conference that public debt would hit "about $31bn at the end of the year" and without funds Lebanon would have to default on payments in 2003.

Lebanon hopes an austere 2003 draft budget, revenues from value-added tax and income tax, and $5bn from the privatisation of mobile phone and electricity utilities would ease the debt burden.

Lebanon is still reeling from a devastating civil war in the 1970s and 1980s.

Press praise

Most Lebanese newspapers welcomed the loans but said the government would have to focus on speeding financial reforms and privatisations to revive the economy.

The mass-circulation An-Nahar daily said there was now international support "for its financial reform plans, in return for a serious commitment from Lebanon to implement reforms under the supervision of the International Monetary Fund (IMF)."

Only the Ad-Diyar newspaper, which opposes prime minister Rafiq Hariri, was critical saying the loans "cover up the bad (government) performance which had led the country to accumulate an important debt" of more than $30bn.

Who gave what

Saudi Arabia was the main donor, promising $700m, while France, the European Investment Bank, the Kuwait Investment Bank, and the Arab Development Fund all pledged $500m each.

The US, Britain, Germany and Spain offered nothing until Lebanon struck a deal with the IMF.

The Beirut government has sought to avert structural reform proposed by the IMF.

The meeting was dubbed "Paris II" after a similar conference in 2001 at which $500m was pledged.