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Middle East Analysis

Lebanon Chugs Along Despite Political Instability

By Bassem Mroue (The Associated Press)

posted on 03/12/08

[Lebanon’s situation] sounds like a disaster about to happen, in a nation where a renewal of the civil war of the 1970s and 1980s is a chronic worry. But Amer Hazime doesn’t see it that way. While not exactly optimistic about the future, the young businessman—a Lebanese-Jordanian dual national—is shopping for an apartment in Beirut. … There are many like Hazime. Beirut’s hot real estate market is just part of a crazy quilt of actions and attitudes that keep Lebanon chugging along in spite of itself, a Middle Eastern magnet even if it hasn’t returned to the storied days of the early 1970s when Beirutis boasted their city was the “Paris of the Middle East."

Among the negatives: The national debt of $42 billion is 175 percent of the country’s gross domestic product, making it one of the highest in the world. Economic growth was projected to be seven percent last year but, amid the nagging uncertainty, it was only about a third of that. The cost of living has shot up 37 percent since November. So how does this small nation of four million people get by?

To begin with, the Lebanese are entrepreneurs … The country’s free market is its strongest asset and its banking secrecy an attraction to depositors. Tourists keep coming … and the restaurants and nightclubs are packed. Private bank deposits are up 10.5 percent. The currency has remained steady for 15 years, taxes are collected and the courts keep functioning. Hundreds of thousands of educated, professional Lebanese have regularly gone abroad during the country’s troubles and … sent money home. Access the full article>>