Lebanon (country)

V

Economy

Before the civil war, Lebanon developed as a free-market economy with minimal government regulations. Because the country had a stable and open economy and strict laws regarding secrecy in banking, Beirut became the banking and investment center of the Middle East. From 1975 to 1990, however, warfare severely dislocated most economic sectors and destroyed structures and infrastructures totaling an estimated $25 billion to $30 billion. As the war damaged Lebanon’s economy, most of the rest of the Middle East experienced an economic boom, and businesses moved from Beirut to other Middle East economic centers. Lebanon’s economy did not collapse completely during the war, however, largely because foreign aid to competing militias fueled the wartime economy.

Since 1991 Lebanon’s economy has revived. Annual inflation, about 500 percent in 1987, was manageable by the mid-1990s and low by the start of the 21st century. Gross domestic product (GDP) totaled $24.4 billion in 2007. Horizon 2000, a multibillion-dollar reconstruction program to rebuild Beirut’s central district, is the main focus of the government’s energies. In general, the government is low on funds and has increasingly privatized public functions, including some official monopolies, such as the postal service and the lucrative mobile phone service.

A

Labor

In 1997 Lebanon’s annual unemployment rate was 8.6 percent. Lebanese workers, who number about 1.5 million, must compete for jobs with an estimated 1 million foreign workers, mostly Syrian. An estimated 62 percent of the employment is in services, including tourism, trade, government, and finance. Approximately 31 percent of the labor force work in industry, including manufacturing, construction, and mining; and 7 percent in agriculture. Wages and buying power are low, and unions are encouraged. Periodically the unions strike, sometimes in a general action, often eliciting changes from the government.

B

Services

Services contribute 70 percent of Lebanon’s GDP. Domestic, foreign, and transit trade (the re-export of products manufactured outside Lebanon but distributed through it) stimulated prosperity before the civil war and has begun to recover since 1990. Similarly, financial services such as banking, investment, and insurance—significant before the war—have also revived. Tourists, who support an industry of hotels, restaurants, casinos, and nightclubs, are attracted to Lebanon’s scenery, climate, historical sites, and cultural activities. In 2007 about 1,017,000 tourists—most from Europe, the Middle East, and the Americas—visited Lebanon. Superior educational and medical facilities attract thousands of clients and also add an important service element.

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C

Industry

Industry makes up 24 percent of the country’s GDP and is a major employer. Light industry is especially prominent and includes the production of cement, processed foods, printed material, textiles, clothing, chemicals (typically paints), and jewelry. Two cement plants near Tripoli are major installations. Oil refining was a major industry before the civil war, but the country’s main refineries, near Tripoli and Şaydā, were badly damaged during the civil war and have yet to be rebuilt. Most of the rest of Lebanon’s industry is in or near Beirut. Since the end of the war, construction has been a major source of income and employment. Commercial mining is limited to large-scale quarrying of Lebanon’s plentiful limestone and smaller-scale production of gypsum.

D

Agriculture

Historically, agriculture was a key element in Lebanon’s economy. In the 19th century, mountain clans built thousands of stone terraces to facilitate their farming of steep slopes. Agriculture, including forestry and fishing, employs only 7 percent of workers and contributes only 6 percent of GDP. Cultivated fields cover 17 percent of Lebanon, and 14 percent is in permanent crops (orchards and vineyards). Premium produce, especially oranges and peaches, are a valuable export. The intensively farmed coastal plain produces citrus, bananas, vegetables, melons, and strawberries, while the lower slopes of the mountainsides support vineyards and fruit orchards of olives, figs, peaches, cherries, and plums. Apples are grown at higher elevations. The Bekáa produces wheat, barley, sugar beets, tobacco, grapes, and fruits. Farm-raised animals include goats, sheep, cattle, pigs, and chickens.

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