BEIRUT, Aug 21: Israel's war with Hizbollah has crushed all parts of Lebanon's economy and erased growth this year, but restructuring funds will create jobs and boost the economy in 2007, Lebanon's economy minister said on Monday.

Sami Haddad said that besides an estimated $3.6 billion in damage done to infrastructure by five weeks of Israeli air strikes, economic growth was now expected to be zero or negative, from a previous forecast of five or six per cent.

But Lebanon will move quickly to renew investors’ confidence and an inflow of funds from foreign allies and donors would very likely boost growth in 2007, he said.

“There's no doubt that as the situation stabilises politically and militarily, there's going to be a lot of work because this reconstruction will create a lot of jobs and then uphold investment,” Haddad said in an interview.

“I am persuaded that we will rebuild quickly and the year 2007 will be a year that will have a significant growth rate -- hopefully a double digit growth rate.”

Haddad said every sector of the economy had been hit, including $3 billion in losses from tourism receipts this summer. Agriculture, the fishing industry, services and manufacturing had also been hit. Tourism and banking are the mainstays of the Lebanese economy.

“The damage to the economy is extensive because Israel really targeted our civilian infrastructure and our economic infrastructure,” he said.

“It will take a considerable amount of time just to rebuild everything that has been destroyed.”

Haddad said that by the end of the week, the government would announce a financing plan to rebuild the destroyed 15,000 housing units, most of which were in south Beirut and south Lebanon.

“It will be decided in the next few days, and will be distributed to all those who had partial or total destruction of their homes,” he said.

He added the government would resume its push to reduce Lebanon's debt load of around $36 billion, or 185 per cent of GDP, by restructuring and resuming pre-war plans to privatise its telecoms sector and the national flag carrier Middle East Airlines.

“We expect this privatisation programme will reduce the principle of the debt by 12-15 per cent. We are expecting revenues of $5-$10 billion,” he said.”

—Reuters