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Last Updated: Tuesday, 28 November 2006, 12:54 GMT
Rebuilding Lebanon: the task ahead
In Lebanon, three months after the end of the war with Israel, the economic costs of the conflict continue to mount. Roads, bridges, and schools have to be fixed, homes need to be rebuilt, and businesses need to recoup their losses.

BBC World Service business reporter James Whittington has been travelling around the country to look at how the Lebanese are approaching reconstruction.

Life has not changed much for the 1,000 or so Holstein-Friesian cows kept in large barns in the Bekaa Valley in Lebanon.

Rebuilding Lebanon will take a long time and cost a fortune

They are milked and fed regularly and the workers on the farm keep the place clean.

But next door, the factory that used to turn their milk into yoghurt, drinks and cheese, lies in ruins.

Lebanon's largest dairy company, Liban Lait, was hit by an Israeli air-strike in the early hours of Monday morning on 17 July.

The duty manager had decided to call off the night shift so there were no casualties.

But the cost of rebuilding the factory is estimated at $20m (10m).

Mohamed Zeidan, who is overseeing the clear-up operation, says the milk from the farm is being sold to local competitors and he thinks it will take at least 18 months before Liban Lait is fully up and running again.

Hiding rockets

A short drive from the dairy is Dalal Steel, which was also flattened by Israeli bombs.

Its owner Tawfik Dalal has thrown himself into resurrecting the business, which makes pre-fabricated buildings for customers like the US army.

Cranes carrying huge red steel girders glide across the 25,000 square metre site.

And work is already underway for a contract to build mobile huts for the Lebanese army, which has moved into the south of the country since the end of the war.

"We didn't have any debts so that was a good thing as we were able to borrow $5m from the bank. But this is not going to be enough," Mr Dalal explains.

According to a spokeswoman for the Israeli army, factories in the Bekaa Valley were targeted because of suspicions that they were storing weapons for Hezbollah fighters.

Fadi Abboud, the president of the Association of Industrialists in Lebanon describes this allegation as "absolute rubbish".

Business owners in the area agree that Hezbollah could use the surrounding mountains as a conduit for weapons from Syria.

"But there are plenty of places to hide rockets, they don't need factories like ours," says Mr Zeidan.

Cluster bombs

The costs of cleaning up and rebuilding after the summer war will run into billions of dollars.

Landmines in Lebanon
There could be a million land mines left to clear

But this is not the first time the Lebanese have had to piece together their homes, businesses and lives.

Fifteen years of civil war and repeated conflicts with Israel have made them extremely resilient.

Lebanon's finance minister, Jihad Azour, says that physical losses from the 34-day war amount to $2.5bn.

That includes the estimated costs of repairing bridges, roads and buildings.

On top of that, he says, there were other big costs to the overall economy, including income lost from the summer tourist season, the sharp fall in exports because of Israel's air and sea blockade, and the damage caused to agricultural crops, such as tobacco and olives, especially in the south where most of the fighting took place.

This year's olive harvest is expected to be particularly poor.

Many farmers in the south are worried about entering their fields because of the danger of unexploded cluster bombs, most of which where scattered across southern Lebanon by the Israeli army in the last three days of the war.

Every week there are reports of casualties as cluster bombs go off.

The United Nations estimates that there are about one million of them to clear.

Reconstruction efforts

Travelling through some of the villages that were destroyed by fighting in southern Lebanon, the task of rebuilding appears overwhelming.

Maybe the cement companies and the steel companies will be able to export quite a bit into Lebanon on the back of this peace initiative that's going on
Yasser Hassanein of Dynamic Securities in Egypt

But work is underway to clean away the rubble and fix electricity and telephone lines.

Some people have already started to rebuild their mosques and homes.

As the government draws up reconstruction plans, Lebanon's finance minister, Jihad Azour, is busy trying to raise money to fund the task.

About $2.3bn in foreign aid has already been promised from the international community, most of which has come from Arab countries in the Gulf.

But the finance minister says he hopes much more will be made available at a conference for international donors in Paris in January.

Meanwhile, Hezbollah - whose attack on an Israeli patrol inside Israel started the war - has also been busy.

Since the end of the war it has switched its focus from fighting to reconstruction.

In the southern suburbs of Beirut, its building contractor, Jihad Construction, has been organising teams of volunteers to help fix damaged and destroyed buildings.

It has paid some $8,000 from its own funds to cover rent for a year for every household that lost a home.

And more money is promised to help with the rebuilding.

No growth

Tension exists between Hezbollah and the Lebanese government over the reconstruction effort.

"We are not very happy because the Lebanese government could do more," says the head of Jihad Construction, Kassam Allaik.

"There are lots of problems with buildings and shops being destroyed. They are very slow and have different priorities."

Mr Azour acknowledges that Hezbollah has been getting a lot of the credit from its strongholds in the predominantly Shia south for its reconstruction efforts so far, but he is adamant that the government has also been working hard.

More than 15,000 properties were destroyed across the country and the Lebanese government has also said it will pay about $50,000 towards the re-building of each new home.

As the costs mount, the economy as a whole will take time to recover.

Overall the Lebanese government expects no economic growth this year because of the war.

The International Monetary Fund is much more pessimistic, predicting a contraction of at least 5% in 2006.


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