LEBANON DONORS CONFERENCE IN STOCKHOLM AUGUST 31

C O N F I D E N T I A L SECTION 01 OF 09 STOCKHOLM 001452

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/06/2016
TAGS: EAID PREL LE SW
SUBJECT: LEBANON DONORS CONFERENCE IN STOCKHOLM AUGUST 31

REF: STATE 139903

Classified By: NEA PDAS Jeffrey, reason 1.4 (b) and (d).

Summary and Comment
--------------

1. (SBU) Donors pledged 942 million USD in early recovery
and humanitarian aid at the August 31 Stockholm Conference
for Lebanon,s Early Recovery, nearly double the 500 million
target set by the Government of Sweden, which hosted the
event. Representatives from 50 countries as well as UN
agencies, International Financial Institutions, the European
Commission and European Union and International NGOs attended
the conference. Conference participants universally expressed
their support for the full implementation of 1701 and a
majority of speakers called for an immediate end to the
Israeli blockade. Several delegates specifically addressed
the provisions relating to the securing of Lebanon,s borders
and the need to end illegal arms transfers. Many of the
statements called on the parties to respect international
law, and to facilitate humanitarian access. Participants
expressed their solidarity with the Lebanese people and their
support for a strong GOL able to extend its authority
throughout its territory. Many specifically welcomed the
&courageous8 decision to deploy the Lebanese Army in the
South and along the border with Syria, and expressed their
support for the expeditious deployment of UNIFIL. Reflecting
the rapid transition from the emergency response phase to
early recovery, the UN revised its humanitarian flash appeal
downward to 96 million. The appeal was already funded at a
level of 89 million, leaving a shortfall of only 7 million.


2. (SBU) In expressing their support for the recovery and
reconstruction process, many delegates cautioned that
achieving lasting peace and stability for Lebanon requires a
parallel effort to reach a political solution to address the
root causes of conflict in the region, explicitly linking the
situation in Lebanon to the Israeli-Palestinian conflict.
Lebanese Prime Minister Siniora blamed Israel for wiping out
&fifteen years of post-war development...in a matter of
days8 and accused Israel of &repeatedly and willfully8
violating international law, including the Geneva
Conventions. His comments were echoed in numerous statements
by delegates from the region.

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3. (C) Comment: In contrast with what he told us during a
private meeting (septel),Siniora's public presentation was
much more polemical. Most other participants joined in the
call for the lifting of the blockade but did not make
anti-Israeli political statements. The Lebanese wanted to
start their presentation with a very unbalanced film, which
blasted Israel but did not mention what started the conflict.
The Swedes and Lebanese previewed the film for us. After
hearing that we would walk out if they insisted on showing it
in "prime time" when the audience was full, they then agreed
to show it in the afternoon, when there were far fewer people
in attendance (and only one person representing the US
delegation). We were able to negotiate the Chairman's
Summary to include language on "the opening of Lebanese
harbors and airports for civilian purposes." The language on
the blockade read as follows: "It was recognized that the
continued Israeli blockade constitutes a major impediment to
the early recovery process. Participants urged that the call
by the UNSYG to lift the blockade be heeded.". The Lebanese
had pressed for a specific call on Israel, that we rejected
as unbalanced.


4. (C) Comment continued: During Amb Tobias' press
conference, he was peppered with mostly political questions
regarding the US position on the Israeli blockade. He
responded by referring to the need for the full
implementation of 1701 as the road to the solution of this
problem. Asked about the position of the US with respect to
contributions to a fund and potential involvement of
Hizballah in the distribution of assistance, he responded
that different donors have different means of assisting and
reiterated the importance of matching resources with the
GOL's priorities and effective coordination. END SUMMARY AND
COMMENT.


DAMAGE ASSESSMENT AND THE NATIONAL EARLY RECOVERY PROCESS
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5. (SBU) The GOL presented a preliminary damage assessment
and a summary of early recovery initiatives, supported by a
43-page strategy document entitled &Setting the stage for
long-term reconstruction: The national early recovery
process8, available online at:

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http://www.sweden.gov.se/sb/d/7018.


6. (SBU) Lebanese PM Fouad Siniora told delegates that his
country sustained billions of dollars of damage to
infrastructure and property. He estimated the indirect costs
at billions more. GOL estimates of the direct impact on the
Lebanese side of the month-long conflict include the
following:

--Civilian casualties and displacement: more than 1,100
killed, more than 4,000 wounded, and one million displaced.

--Shelter: more than 30,000 housing units totally or
partially destroyed.

--Widespread threat from unexploded ordnance (UXO).

--Electricity sector: estimated at 114 million.

--Telecommunications infrastructure: 134 million in damage.

--Transportation infrastructure: 484 million in damage to
roads, bridges and airports.

--Government infrastructure: 4 million in damage to
government buildings and supplies.

--Health: extensive damage to health facilities, including 34
million in damage to five government hospitals, reduced
access to health facilities and increased risk of epidemic
disease outbreaks, and exhaustion of medical supplies.

--Education: 36 million in damage, including 40-50 schools
totally destroyed and 300 damaged.

--Water and sanitation: 81 million in damage to water
pumping, storage and distribution networks and sewerage
systems.

--Environment: 10,000-15,000 ton spill of heavy fuel oil.

--Industry: preliminary estimate of 220 million in direct
damage to industrial infrastructure and losses in
productivity of up to 30 million per day.

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--Agriculture: extensive damage to farming equipment and
infrastructure, loss of harvests and reduced access to
markets, as well as damage to the fishing industry.

--Public finance: the anticipated net impact of revenue
shortfalls and increased expenditures is 1.5 billion.

--The GOL also outlined the impact of the conflict on
unemployment and livelihoods as well as the needs of
vulnerable groups, including Palestinian refugees.

SUMMARY OF PLEDGES
--------------

7. (SBU) An initial GOS estimate placed the total pledged
at the conference at USD 942 million. A Swedish MFA official
later provided the following refined breakdown of the top ten
pledges (in millions): Qatar 300; United States 180; Arab
Fund 112; Saudi Arabia 60; European Commission 91; UAE 50;
Italy 38; Spain 94; Germany 28; and Sweden 20. The revised
total is thus 973 million, not including numerous pledges of
less than 20 million.


8. (SBU) In estimating the pledges, the Swedish MFA worked
with OCHA to separate out old pledges, loans, and assistance
directed to other purposes in an attempt to include only new
pledges for early recovery. The GOS estimated the U.S.
pledge at 180 million, excluding 55 million in emergency
assistance already delivered from the total U.S. pledge of
more than 230 million, announced by President Bush the
previous week. The inclusion of the already announced U.S.
contribution apparently became the source of some controversy
following a question at a press event after the conference.

OPENING STATEMENT BY SWEDISH PM GOERAN PERSSON
-------------- -

9. (SBU) Swedish Prime Minister Goeran Persson hailed the
adoption of 1701 and the resulting cessation of hostilities.
He acknowledged the &tragic loss of life in both Lebanon and
Israel8. Sounding a theme that was reiterated by speakers
throughout the day, he spoke of the dual challenge of
rebuilding Lebanon and securing the long-term peace by
addressing root causes. In an interdependent world, he said
events in Lebanon and the Middle East have &immediate and

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far-reaching consequences8. Persson urged the governments
of Lebanon and Israel to move towards a permanent political
settlement in accordance with the principles outlined in
1701, including the implementation of the Taif Accords and of
UNSCR 1559. He expressed support for the SG,s call to lift
the blockade. Persson called on aid to be flexible and
disbursed quickly and in a way that ensures the involvement
of all parts of society.

OPENING STATEMENT BY LEBANESE PM FOUAD SINIORA
-------------- -

10. (SBU) Lebanese PM Fouad Siniora told delegates that his
country sustained billions of dollars of damage to
infrastructure and property during what he described as an
&unjustified war8 against his country. He estimated the
indirect costs at billions more. He reminded participants of
Lebanon,s economic recovery prior to the crisis and
summarized the destruction caused by the conflict in detail,
blaming Israel for wiping out &fifteen years of post-war
development...in a matter of days8. Siniora also blamed the
Lebanese debt burden in large part on &repeated Israeli
aggressions8 and accused Israel of &repeatedly and
willfully8 violating international law, including the Geneva
Conventions.


11. (SBU) Siniora discussed the steps his government has
taken to implement 1701, including the movement of forces
into the South and the deployment of 8,600 troops to the
border with Syria. He said Israel responded by further
punishing Lebanon and delaying the cessation of hostilities
for three days. He also accused Israel of not complying with
1701 even after the cessation of hostilities, and called on
delegates to press for an immediate end to the &illegal air,
sea, and land blockade8. He also decried Israel,s use of
cluster munitions as a &clear violation of international
humanitarian law8.


12. (SBU) Siniora reviewed the early recovery and
reconstruction objectives of the GOL, beginning with
assistance for the remaining displaced population before the
onset of winter, addressing the needs of vulnerable groups,
reopening air and sea ports, rebuilding essential
infrastructure and providing basic services in affected
areas. He indicated the initial needs assessment prepared by

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the GOL for the conference would be further refined in the
future.

13. (SBU) Siniora announced a &Rebuilding the Nation of
Hope8 initiative involving donor funds, direct
contributions, or sponsorships of reconstruction projects,
villages or schools.


14. (SBU) Siniora closed by linking the crisis in Lebanon
to the Israeli-Palestinian conflict and calling for the root
causes of the conflict to be addressed. &War has brought
Israel neither security nor peace8, he said, warning that
the will of the peoples of the region to resist grows
stronger &with each village destroyed and each massacre
committed8. He called military solutions both
&unacceptable and totally unrealistic8 and declared
&partial political tracks and unilateral initiatives8 a
failure. He pledged to work unrelentingly to achieve peace
in the region, &the birthplace of the three great
religions8. Siniora said the Lebanese people are determined
to build a strong and democratic state and to reclaim the
position of Lebanon as a haven of plurality, moderation,
tolerance and freedom in the region.

STATEMENT BY UN DEPUTY SG MARK MALLOCH BROWN
--------------

15. (SBU) Brown lamented the &years of painstaking
reconstruction un-done with breathtaking speed8. He lauded
the determination of the Lebanese people, as well as their
technical capacity in engineering, planning and construction,
and the energy of the private sector. He said the Lebanese
people are &looking to this conference for a signal that the
international community is ready to assist their efforts to
rebuild Lebanon as a stable, independent, democratic,
prosperous country at peace with itself and its neighbors8.


16. (SBU) As the humanitarian situation has stabilized,
Brown said Lebanon is quickly progressing from emergency
response to the early stages of recovery and reconstruction,
a trend reflected in the downward revision of the UN,s
humanitarian flash appeal. He also credited the &great
national unity of the Lebanese people8 and their willingness
to assist those displaced by the fighting with averting a
potential humanitarian catastrophe. Brown indicated the UN
is supporting the establishment of a recovery and

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coordination cell within the office of the PM, and the GOL is
carrying out a comprehensive assessment for a longer-term
National Recovery Plan.

STATEMENT ON UN SUPPORT FOR EARLY RECOVERY
--------------

17. (SBU) Dr. Thoraya Obaid, Executive Director of UNFPA,
delivered a statement on behalf of UNDG expressing support
for GOL leadership of the early recovery process. She said
the UN and World Bank, as well as local and international
organizations, worked with the GOL on the development of
rapid assessments whose preliminary results are summarized in
the strategy document. Obaid highlighted cooperation between
the GOL and the UN system on the campaign to have children
back in school by October 9, the importance of assistance to
Palestinian refugees who sheltered displaced Lebanese or who
were themselves displaced, and the need to jump-start the
Lebanese economy and restoring livelihoods with cash
transfers, micro-finance initiatives and cash-for-work
schemes. Obaid said the UNDG is prepared to support the GOL
in establishing and administering an early recovery fund that
would allow donors to pool resources and provide quick
funding to early recovery initiatives.

REVISED UN HUMANITARIAN FLASH APPEAL
--------------

18. (SBU) Citing the displacement of one million people in
a period of two weeks, UN Undersecretary-General for
Humanitarian Affairs and Emergency Relief Coordinator Jan
Egeland described the crisis in Lebanon as one of the most
dramatic ever. He noted that hundreds of thousands of
Israelis were also displaced. The first response, said
Egeland, came from the Lebanese people themselves, from local
governments and municipalities and civil society.


19. (SBU) The UN responded soon after through a
disbursement from the Central Emergency Response Fund (CERF).
OCHA used a cluster model to help ensure a coordinated
response by implementing agencies with one lead agency for
each of six clusters: logistics (WFP),water and sanitation
(UNICEF),health and nutrition (WHO),food (WFP),emergency
shelter (UNHCR) and protection (UNHCR).


20. (SBU) Egeland described the system of humanitarian hubs

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and corridors used to bring humanitarian supplies into
affected areas during the hostilities. He displayed a graph
of the number of trucks deployed per day during the crisis to
illustrate the intermittent clearances for access he said
OCHA was able to obtain through its communications channels
with the IDF.


21. (SBU) Since the cessation of hostilities, 70 percent of
IDPs have returned home. Reflecting the rapid transition
from the emergency response phase to early recovery, Egeland
reported that the flash appeal has been revised downward to
96 million. The appeal has already been funded at a level of
89 million, leaving a shortfall of only 7 million.


22. (SBU) Egeland said OCHA had obtained &shocking new
information8 that 90 percent of cluster munitions used in
Lebanon during the conflict were dropped in the final three
days of fighting. He estimated the total number of UXO at
120,000 at least 100,000 of which he said are unexploded
cluster bombs.


23. (SBU) He said remaining humanitarian priorities going
forward: potable water, water/sanitation, emergency shelter,
UXO clearance and mine action, emergency health supplies and
fuel supplies.

WORLD BANK STATEMENT
--------------

24. (SBU) Country Director for Lebanon Joe Saba spoke about
the economic challenges facing the country. The pre-crisis
recovery is now likely sharply reversed and the economy is
expected to contract. Saba said the GOL must lead a recovery
and reconstruction effort that is &realistic and guided by
the resources available8 without increasing the debt burden.
He indicated the GOL has asked the World Bank for assistance
in identifying resources for an education project; scaling up
existing projects, including the Beqaa and Southern Beirut
water and sanitation projects; conducting economic and social
impact assessments; expenditure reviews and contingency
modeling; financial sector- and institution building; and
cost and feasibility analyses. Saba invited other UN
agencies to join in these efforts.

EU PRESENTATIONS

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25. (SBU) Speaking on behalf of the EU, Minister for
Foreign Trade and Development of Finland Paula Lehtomaeki
delivered a statement endorsing GOL leadership of the
reconstruction effort and welcoming the establishment of a
relief and recovery cell in the office of the PM to assume
responsibility for coordination. Lehtomaeki recognized the
civilian suffering on both sides. She urged Israel to lift
the air and sea blockade, while acknowledging the need for
effective measures to prevent arms not authorized by the GOL
from entering the country. She reminded the parties to the
conflict of their obligation under international humanitarian
law to grant humanitarian access. Lehtomaeki cited
contributions of troops and support functions for UNIFIL from
member states as evidence of the EU,s commitment to the
rapid and full implementation of 1701. She also expressed
the EU,s commitment to a comprehensive peace plan for the
Middle East.


26. (SBU) EC External Affairs Commissioner Benita
Ferrero-Waldner announced a package of humanitarian relief
and early recovery assistance. She said the EC is also
supporting a Reconstruction Assistance Facility to help the
government to lead the recovery effort. She said the
development objectives of EC assistance include economic and
institutional reforms, and the recovery effort must be
organized in the context of longer-term political and
institutional development.


27. (SBU) Ambassador Marc Otte spoke on behalf of the
Council of the EU, stressing the need to go beyond the
cessation of hostilities and work toward a lasting political
solution. He described peace and stability in the Middle
East as &an essential European interest8.
WOOD