Lebanon Economy Facts
Higher prices for community services such as water, electricity and telecommunications services. Close between system interruptions. Limited withdrawals from the banks. More and more people are losing their jobs. A currency that collapsed in value. Lebanon’s economy is in an almost free fall, with threats of state bankruptcy and the urgent need for international crisis loans.
Lebanon’s economy is dominated by the service sector. Banking and finance, tourism, and construction are important industries, while industry and agriculture have a minor role.
- Countryaah.com: Major imports by Lebanon, covering a full list of top products imported by the country and trade value for each product category.
The country is scarce for natural resources and limited with its own industrial products, which creates a large dependence on imports. Since imports are several times larger than exports, there is a large deficit in trade abroad. The deficits that have risen sharply since 2005 have been partially offset by revenues from the service sector, foreign aid, and the money that Lebanese abroad send home. But the gaps have also been filled by loans. Lebanon’s government debt is one of the highest in the world, measured in terms of GDP, and the payments on the loans pose a heavy burden to the state. In March 2020, when a loan would have been paid, the message came: Lebanon cannot afford it. And soon the government announced that no loans with maturity later in the year would be paid. And then the consequences of the coronavirus pandemic could not even be calculated.
Before the Civil War (1975-1990), Lebanon was the region’s leading financial and trade center. But during the war, tourists disappeared, many foreign companies and banks and well-educated labor emigrated.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including LBN which represents the country of Lebanon. Check findjobdescriptions to learn more about Lebanon.
Efforts were made after the war to regain Lebanon’s leading position as a financial center. Lebanese who moved abroad returned and investors from the Arabian Peninsula built luxury apartments in the belief that Beirut would once again become the region’s entertainment center, but Beirut faced competition from new rivals such as the countries around the Persian Gulf. However, the post-war reconstruction caused growth to be postponed. Between 1992 and 2005, the economy grew by just over 4 percent per year on average.
After the assassination of politician Rafiq al-Hariri in 2005 (see Modern History), foreign investment declined again and tourism declined. When the Syrian army left the country that year, a recovery began, but it was interrupted on the back of fighting between Israel and Hezbollah in 2006. The war caused major damage to infrastructure and the economy. It was reported that eighty percent of the country’s roads and nearly all bridges destroys T s by Israeli bombing.
Lebanon again received financial aid from the outside world to build up what was ravaged and the wheels started spinning again. Growth exceeded 8 percent a year from 2007 to 2010. Due to its relative isolation from the world market, Lebanon was not affected by the international financial crisis that developed from 2008 onwards.
By contrast, the civil war in Syria from 2011 has had a negative impact on Lebanon’s economy and growth has slowed. The side effects of the war in the form of increased violence and contradictions between Lebanese people’s groups caused foreign investors to pull their ears, as did the tourists. In 2010, tourism remained at the same level as before the Lebanese civil war, but the sector has since declined. Most tourists come from neighboring states such as Saudi Arabia and Jordan. Among Europeans, the French are the largest group.
The Syrian war has also led to a sharp decline in exports of goods and services as a large part of the Syrian market for Lebanese goods and services has disappeared. The large influx of refugees from Syria is putting further pressure on the economy and the country’s resources. Already in 2014, the World Bank estimated that the refugee burden cost Lebanon $ 7.5 billion, which is about one-sixth of the country’s GDP.
In order to get the growth going, in 2013 a stimulus program was launched that included loans on favorable terms for, among other things, house purchases, start-ups of companies, energy saving measures and research. In 2018, Lebanon received extensive promises of loans and assistance at an international donor meeting, but much of the loans would be linked to investments in infrastructure, and the failure of leading politicians to agree on a new government after the election in the same year meant that the loans could not be lifted and the projects put in place. started.
Only in early 2019 could a new unity government be formed, but the governing bodies soon became heavily employed by a popular protest wave, which directed their anger both at the political system and at high prices for community services such as electricity and telecommunications services. Already in the autumn, the government was forced to resign. One of the main demands of the protest movement was then that an expert government be formed; the constitutional system that distributes power between religious and ethnic groups is considered by critics to lead to both corruption and incompetence. In early 2020, the country was given a new government, but it has been met by mistrust of the protest movement.
A crisis plan has been drawn up, but in the meantime the problems have continued to grow. There are great demands on the government to implement reforms, under the conditions set for the donor countries’ pledges from 2018 to be fulfilled. Lebanon seeks help from, among others, the International Monetary Fund (IMF); In total, according to Prime Minister Diab, $ 10 billion will be needed, in addition to the 11 billion lenders put into view in 2018. Analysts already predicted that before the corona pandemic, Lebanon’s economy would shrink in 2020.
A note for decisions taken during the dual crisis g o ller odli n grams of marijuana for medical use, which was allowed in April 2020. Despite the fact that both the cultivation and sale of consumption of cannabis has been completely banned, constitutes illegal cultivation since decades a-million in eastern Lebanon. Legalization of a certain part of the culture makes it now possible for even the affected state to receive income from the business.
Lebanon’s main export goods were fruits and vegetables in the past. In recent years, the largest incomes have come from pearls and other jewelry. Oil is the largest import commodity.
In addition to the official trade, extensive smuggling of goods to Syria is ongoing.
Beirut’s port is the most important of a handful of ports. Most of all freight to and from Lebanon goes via Beirut, but Tripoli is also an important port. The civil war in Syria has increased traffic to and from Beirut’s port as other routes for Syrian trade were cut off. Projects are underway to expand the port of Beirut. The port of Tripoli is also under renovation.
Lebanon and the EU have entered into an association agreement, which means that tariffs and other barriers to trade were settled during a transitional period until 2018. Through the agreement, trade between the EU and Lebanon has increased significantly. It now accounts for one third of Lebanon’s entire foreign trade.
Lebanon applied for membership in the World Trade Organization (WTO) in 1999, but the accession process has stalled and Lebanon has only achieved observer status.
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FACTS – FINANCE
GDP per person
US $ 8,270 (2018)
US $ 56,639 million (2018)
0.2 percent (2018)
Agriculture’s share of GDP
2.9 percent (2018)
Manufacturing industry’s share of GDP
7.8 percent (2018)
The service sector’s share of GDP
74.7 percent (2018)
3.1 percent (2019)
Government debt’s share of GDP
151.0 percent (2018)
US $ 73,526 million (2017)
US $ 3 755 million (2017)
US $ 18 214 million (2017)
– US $ 12 396 million (2017)
Commodity trade’s share of GDP
43 percent (2018)
Main export goods
jewelry, metals, vehicles, machinery and electronics, wine, tobacco and vegetables
Largest trading partner
Syria, South Africa (for export) 1
- China, Italy and US (for import)Sources
Newly elected MP is murdered
On the same day that the first investigation into Hariri’s murder is handed over to the UN, Gibran Tueni, the head of the newspaper an-Nahar, is killed in a bombing operation. He was a newly elected MP and strongly critical of Syria.
Several Syrian critics killed in assaults
During the election period, the well-known journalist, Samir Qasir, who wrote Syrian-critical articles in the newspaper an-Nahar is murdered. He is killed by a bomb placed in his car. Qasir was a Palestinian and had French citizenship. Two days after the election, anti-Syrian politician George Hawi, who was leader of the Communist Party, was killed by a car bomb in Beirut. Three weeks later, the outgoing government minister, Elias Murr, is injured by a car bomb that calls for two fatalities. It is the first attack in 2005 aimed at a Syrian-friendly politician.
Elections are held across the country
Ahead of the May and June 2005 elections, politicians from various groups usually form broad alliances to get the largest possible dividend. The election takes place four Sundays in a row. In Beirut, all mandates go to the so-called Martyr Rafiq al-Hariri list, which was dominated by the Future Movement led by the murdered leader’s son Saad al-Hariri. In the south, the Hezbollah and Shia Muslim Amal Alliance Resistance and Development are given every mandate. In the central parts of the country, Hezbollah wins -alliance most mandates in the Beka Valley and in the Drusian Shouf Mountains southeast of Beirut, Walid Jumblatt’s Drusian party, which is on Hariri’s list, wins. In the Christian areas north and east of Beirut, most of the mandate goes unexpectedly to Michel Aoun’s alliance. This former general, who has been strongly anti-Syrian, has just returned from his exile. Before the election, he begins a collaboration with pro-Syrian politicians, including a Drusean rival to Jumblatt. This means an increased divide among the Christian Maronites and a severe setback for their former largest factions, the Lebanese Forces (FL) Party, and Kataeb. In the last round of elections, in northern Lebanon on June 19, Hariri’s opposition alliance wins all the mandates that are at stake.
The final outcome will be that the Future Movement and its allies in the March 14 alliance conquer a total of 71 of Parliament’s 128 seats. Hezbollah and other groups in the March 8 movement win 57 seats. New prime minister becomes Fouad Siniora, former finance minister and close associate of the murdered Rafiq al-Hariri.
Syrian troops out of Lebanon
Syria announces at the end of the month that the country has withdrawn its troops from Lebanon.
Temporary ministry should prepare elections
The resignation of Omar Karami, who has resigned, attempts to form a new government, and a temporary minister is appointed to prepare for parliamentary elections in May and June.
The UN proposes an international murder investigation
At the end of March, a UN expert group questions Lebanon’s ability to effectively investigate the assassination of Hariri and proposes an international investigation. The UN report also gives testimony that the Syrian President in 2004 had stated direct threats against Hariri to get him to accept an extended mandate for incumbent President Emile Lahoud, who had Syria’s support.
Syrian troops should be withdrawn
Syrian President Bashir al-Assad promises to withdraw Syria’s troops from Lebanon. Hizbullah leader Sheikh Hassan Nasrallah claims that chaos could erupt if Syrian troops are taken home, and Hezbollah mobilizes half a million participants on March 8 in the largest demonstration to date. On March 14, a month after Hariri’s assassination, the anti-Syrian Lebanese are filling streets and squares in Beirut. One million people are said to have participated. These two dates may name two political alliances: the March 8 movement and the March 14 alliance, which will dominate politics in the coming decade.
The following weeks, several bomb attacks in the Beirut area’s Christian district occur and three people are killed.
The former prime minister is murdered
Former Prime Minister Rafiq al-Hariri is murdered in a car bomb attack in Beirut. In total, the attack requires 22 lives in addition to the suicide bomber. The attack on Hariri is followed by huge demonstrations against Syria suspected of the act. Syria denies any involvement in the murder and blames Israel instead. The pro-Syrian government resigns under pressure.