housing units; basic social services; the environment; Palestinian refugee camps;

industrial and agricultural production; public finance; unemployment and livelihoods; and infrastructure.

Plans are in the pipeline to hold a reconstruction conference in Beirut by the end of the year.

Estimating the costs of reconstruction has been complicated. 'Its very difficult to put a figure on this,' says Roger Melki, senior adviser to the finance minister. 'The direct and indirect costs are hard to estimate. A conservative estimate on the cost to the industrial sector is put at $200 million-220 million, but if you take a milk production unit the cost of the machines is put at $10 million while replacing them could cost more than $20 million.'

Some of the early figures put on the cost of reconstruction should be treated with care. 'The UNDP figure of $15,000 million is very high,' says Melki. 'The government is more cautious in its figures. I think we will revise the estimation. From 1991-2006, we didnt spend more than $5,000 million.'

The reconstruction is likely to be eased after Israel lifted its air and sea blockade on the country on 8 September.

Before the conflict started, Beiruts economy was already struggling under debt. Standing at $38,800 million at the end of May, the public debt is expected to rise. Growth for 2006 is expected to decline from a predicted 4-5 per cent of gross domestic product (GDP) to 0 per cent.

However, fears that the economy is now likely to slide into recession may be premature. 'Recession is not the right word,' says a London-based analyst. 'This [conflict] was a one-off shock. What impact this all has on investor confidence is key.'

(see Cover Story and Briefing, pages 6-9)

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