Lebanon: Economic and Political Outline

Economic Overview

Lebanon has a free-market economy with a strong laissez-faire (hands-off) commercial tradition. Since the end of the long civil war (1975-90), Lebanon has implemented an extensive program of reconstruction of basic infrastructure and social and structural reforms have been  initiated. The country has experienced a real boom, catching up where it fell begind due to the civil war and the 2006 war.  After reaching record levels between 2007 and 2010 (8% growth in average), the Lebanese economic growth slowed down sharply in 2011 (1-2%) due to internal political tensions and revolutions happening in the Middle East (including Syria). The sectors driving growth (real estate, tourism, wholesale) were affected. Growth is estimated at 3-4% for 2012.

The Lebanese authorities are facing with many challenges. Although declining, public debt remains high (over 125% of GDP), the current budget deficit is persistent and there are fears of a possible contagion from Syria. The new government has taken steps to improve the social situation (price controls on basic commodities, higher wages) as well as undertaken initiatives to stimulate the economy (projects to mine hydrocarbon deposits). In February, Prime Minister Najib Mikati has reviewed the proposed budget in 2012 (rejected by Parliament in January) by introducing a ceiling for the budget deficit (5% of GDP) and for public debt (100% of GDP) and also measures to stimulate growth and control inflation. It counts on rationalizing spending, reducing debt, reforming the tax system and paving the way for privatizations.

Unemployment is officially estimated at 18% but in the absence of reliable statistics it could in reality reach 20-20%. There are significant social inqualities.

Main Sectors of Industry

The banking sector is the piller of the Lebanese economy and during the recent years it saw record profits.The sustained and lucrative banking activity does not however constitute a real support to the private sector because the majority of liquidity coming from banks is used to finance the national debt.

Lebanon also has a booming real estate sector, which benefits from the burst of the real estate bubble in Dubai. Demand coming from the Arab countries is indeed very high. Tourism represents 25% of jobs and 20% of the country's revenues. The sector was booming until a drop in the number of visitors in 2011 due to the instability in the Middle East.

Lebanon has fertile lands, however the agricultural sector is under-developed and only contributes up to 5% of the GDP.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

60.1/100

Position:

Moderately free

World Rank:

84/179

Regional Rank:

9/17

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Ministry of Economy and Trade
Ministry of Finance

Statistical Office

Central Administration for Statistics

Central Bank

Central Bank of Liban

Stock Exchange

Beirut Stock Exchange

Other Useful Resources

Zawya, economic website about the Middle East.
Ame info, economic information website about the Middle East.

Main Online Newspapers

La Revue du Liban (in French)
Al Watan Al Arabi (in Arabic)
Annabaa (in Arabic)
Al Anwar (in Arabic)
Al Balad (in Arabic)
Al-Aman (in Arabic)
Al-Mustaqbal (in Arabic)
Aliwaa (in Arabic)
El Shark (in Arabic)
L'Orient Le Jour (in French)
The Daily Star - Lebanon
As-Safir (in Arabic)
Al-Markazia (in Arabic)
Almassira (in Arabic)
Al-Akhbar (in Arabic)
An-Nahar (in Arabic)
Dar Al Hayat (in Arabic)
Al Intiqad (in Arabic)

Economic Portals

An Nahar: the country'smost important paper

Political Outline

Type of State

A Republic based on confessionalist, parliamentary democracy. This means that each political position must be filled by a person of a particular denomination.

Executive Power

The President is the head of the state and is elected by the National Assembly for a six-year term. The Prime Minister is appointed by the President in consultation with the National Assembly and acts as the head of the government, to serve a four year term. Though the Prime Minister enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs, the President also holds a strong and influential position which includes promulgation of laws passed by parliament and ratification of treaties. The Cabinet is chosen by the Prime Minister in consultation with the President and members of the National Assembly. As per the constitution of the country, the President must be a Maronite Catholic Christian and the Prime Minister a Sunni Muslim.

Legislative Power

The legislature in Lebanon is unicameral. The parliament called National Assembly consists of 128 seats; with its members elected by popular vote on the basis of proportional representation, with quotas according to religion,  to serve four-year terms. Legislative power is vested in both the government and the parliament. The executive branch of the government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The Prime Minister cannot dissolve the parliament nor can he veto its enactments. The Speaker of the Parliament must be a Shi'a Muslim.

Main Political Parties

Lebanon has numerous political parties, but they play a much less significant role in the country’s politics than they do in most parliamentary democracies. Coalitions usually exist only for contesting elections, and rarely form a cohesive bloc in the National Assembly after the election. Some of the major political parties in Lebanon are:

- Current for the Future – a political movement and a major political party in Lebanon;
- Progressive Socialist Party – ideologically secular and officially non-sectarian, but in practice follows the Druze faith;
- Hope Movement – advocates greater respect and resources for Lebanon's Shi'ite population;
- Party of God (Hezbollah) - Shi'a Islamist militant organization, supported by Iran;
- LF (Lebanese Forces) – a former militia but now a secular political party, supported mainly by Christians;
- The Lebanese Phalanges (Amine Gemayel);
- The National Liberal Party (Dory Chamoun);
- The Democratic Renewal Movement (Nassib Lahoud);
- The Movement of the Democratic Left (Atallah Elias);
- The Syrian Nationalist Social Party (Ali Qanso);
- The Free Patriotic Movement (Michel Aoun).

Current Political Leaders

President: Michel SULAYMAN (as of 25 May 2008)
Prime Minister: Samir MOQBIL (since 7 July 2011) .

Next Election Dates

National Assembly elections in 2014.

Indicator of Freedom of the Press

World Rank:

93/179

Evolution:

15 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).