|
COUNTRY NAME: Lebanese Republic
LAND AREA: 10,200 km2
POPULATION: 4,1 million (2010 est.)
LANGUAGE: Arabic (official), French, English, Armenian
CURRENCY: 1 Lebanese Pound (LBP) = 100 Piaster; 1 EUR = 2 LBP (Nov. 2010)
MAIN CITIES: Beirut (capital), Sidon, Jounié, Tripoli
NATIONAL DAY: 22 November – Independence Day
TIME ZONE: Standard Time is GMT + 2
Lebanon gained its independence from France in 1943 and developed one of the Middle East’s most advanced economies. It has long been the convergence point of trade routes and the meeting place for a wide variety of peoples, the basis of the rich and diverse national culture that exists in the country today. It is a regional and international hub for trade, finance, services, industry, culture and tourism. At the centre of the Eastern Mediterranean, Lebanon is at the crossroads of Africa, Asia and Europe. It enjoys a rich variety of climates and ecosystems.
As a trading and international banking centre, it was long known as “the Switzerland of the Middle East” until its disastrous 1975–1990 civil war and protracted conflict. The 1975-90 civil war seriously damaged Lebanon’s economic infrastructure, cut national output by half, and all but ended Lebanon’s position as a Middle Eastern entrepot and banking hub. In the years since, Lebanon has rebuilt much of its war-torn physical and financial infrastructure by borrowing heavily – mostly from domestic banks. Lebanon’s most important area of economic activity has historically been services, which in 2008 accounted for an estimated three-quarters of nominal GDP. The capital, Beirut, remains a significant regional banking centre. Although agriculture remains an important source of employment, most rural holdings are small, economically inefficient and rented by subsistence farmers – so agriculture accounts for only around 5% of nominal GDP. The country’s most precious natural resource – vast forests of cedar – was exhausted in ancient times, and today, the main focus of the primary sector is quarrying for the cement industry. The industrial sector is also small, partly because the domestic market shows a preference for imported goods. Among the sector’s most significant exports are processed food and jewellery – with the latter showing strong growth in recent years. Lebanon enjoys a free foreign exchange market, full currency convertibility, complete repatriation of capital and a regulated banking secrecy law. These privileges make Lebanon a prime destination for foreign investment and tourism. Investors can benefit from a sophisticated legal framework, which protects the rights and assets of both Lebanese and non-Lebanese investors.
Financial Sector
Lebanon’s financial sector, one of the region’s most sophisticated, offers a wide range of services. There are few restrictions on domestic banking and few barriers to foreign banks. Regulations are fairly transparent, and credit is allocated on market terms. There are 69 banks registered at the National Bank of Lebanon/ Banque du Liban, with 62 active commercial banks and 12 specialized banks. Banking currently employs more than 17,660 individuals in 872 branches conveniently spread throughout the country, and manages the equivalent of $90 billion in assets nation-wide. Foreign representation is important either in the form of a foreign bank maintaining branches in Lebanon (11 banks) or equity stakes in several local banks. 16 foreign banks have also a representation office in Lebanon. Foreign representation is significant, whether through foreign banks maintaining their branches in Lebanon or equity stakes in several local banks. At the same time, Lebanese banks have expanded abroad, particularly in Syria, Jordan and France. Today, there are eighteen Lebanese banks active in one way or another in sixteen foreign countries. Foreigners can open accounts in banks operating in Lebanon and get credit on market terms. The Banking Control Commission (BCC) closely monitors bank credits. Bank financial statements are in compliance with international accounting standards. Independent auditors audit annual accounts, and most banks utilize internationally recognized accounting firms. The recent report by International Monetary Fund (IMF) noted that the global financial crisis on Lebanon had had no major impact. Like other Middle Eastern states, the local bourse declined, but real estate markets did not crash, and banks were not failing. Key to Lebanon’s success at insulating itself from the worst of the global financial meltdown has been sound fiscal policy from the Central Bank. Years ago, CBL issued a bank circular prohibiting Lebanese banks from subscribing to subprime mortgage products.
Insurance Sector
The Lebanese insurance market has always been open and liberal, in line with Lebanon’s free market economy. Private insurers have historically been the only players in the local market and the state has never nationalized or expropriated an insurance firm. Additionally, the Lebanese state never owned insurers and private companies did not have to compete with state entities or worry about government monopolies, as is the case in many other Arab countries. This characteristic has helped the sector respond to market forces and avoid the distortions associated with state-ownership of insurers. Further, the sector has very low barriers to entry and is one of the most open insurance sectors in the region. The existing rules and regulations already allow foreign insurers full ownership of local operations and for the acquisition of a domestic insurer. Competition exists from a large number of domestic firms as well as from Arab and foreign insurers already present in the market. As at 2007, figures published by Lebanon’s Ministry of Economy and Trade showed that the total assets of that country’s insurance sector amounted to $1,555 million, of which $829 million was held in investments. The operational efficiency of the Lebanese insurance sector is positively influenced by the fact that the industry is totally in the hands of the private sector. On the other hand, Lebanon does not have the advantages of the more efficient Arab markets in terms of large industries related to oil production. Further, Lebanon has one of the more developed life insurance sectors relative to other Arab countries, which increases the comparative efficiency of the Lebanese market.
Tourism
Tourism, the country’s major economic activities and foreign exchange earners, was hit severely by the country’s protracted political crises. Adverse political and security conditions placed it on the list of the “world’s most dangerous destinations”. However, efforts are now being made to reposition Lebanon on the international tourism map. The Ministry of Tourism is continuing with projects to promote Lebanon providing electronic services and information, participating in world exhibitions, and targeting selected new markets.
Energy Sector
Lebanon depends almost entirely on external energy sources, in particular for oil products. Growing energy needs may impact increasingly on the high energy import bill and thus on the country’s economy. It could develop towards a transit country, including to the benefit of secure energy supply to the EU. Lebanon took a major decision to introduce natural gas in the economy, although it has no known gas reserves of its own. Gas pipelines are under development and will bring Egyptian and Syrian gas to the region and possibly further to the EU. Lebanon participates in the Euro-Mashreq Gas Market project that aims to reform and modernise the gas industry in Egypt, Jordan, Lebanon and Syria, and achieve the progressive integration of their gas markets with a view to integration with the EU internal gas market. Rehabilitation of energy infrastructure requires significant investments. Development of the oil sector, including the viability of the operation of a refinery, is under study. Lebanon aims to increase the share of renewable energy sources such as hydro, solar and wind in the country’s energy balance to as high as 10% by 2015. The state-owned electricity producer, Electricité du Liban (EDL), generated 10.54bn kwh in 2007, overwhelmingly from imported oil. This was a modest 3.2% improvement on the previous year, but still well below estimates of current demand of some 14.5bn kwh. As a result, electricity rationing continues in all areas, especially during the summer months, when air-conditioning greatly increases demand, leading to periodic brownouts and – less frequently – outright blackouts.
Investment
The Investment Development Agency of Lebanon (IDAL) provides support and assistance for investment matters. Worldwide telecom company Ericsson established a global-services delivery centre in Beirut in August 2007 to provide services to local and regional costumers. The centre will service 70 countries in the region. A new Islamic investment bank is to set up headquarters in Beirut. The Jousour Bank, owned by the Kuwait-based International Investors Group – IIG, will provide
Lebanon financial and investment services according to Islamic principles. Horizon Management, together with Kuwait-based United Real Estate Company, is undertaking two new projects in Beirut. Excavation for a 220-room hotel at Raouche, Ras Beirut, is currently underway. On completion, the $45 million project will be under the management of international hotel-chain Kempinski. The second project is a five-star hotel and shopping mall in Verdun. This is estimated to require investment of $100 million. Optimum Developments is to launch the Ehden mountain destination project. This will consist of two separate components with nature integration as a major feature. KROUM is to be a traditional Lebanese commercial, residential mixed use village, a 120 room 5-star hotel, a residential spine offering a diversity of apartments and a medi-spa. LES PARCS D`EHDEN is an eco village, hill lakeside cabanas and family dwellings, and a small convention centre. Both projects will complement the long awaited Ehden Eco Ski Resort, to be developed on a 40,000,000 m2 car-free domain accessed solely by a cable car departing from KROUM when it has been constructed.
Communications & IT
Lebanon was one of the first countries in the region to have widespread Internet access, given a strong interest in technology, multilingual skills and a vast expatriate population seeking to communicate with relatives at home, but facing high fixed-line international call costs. Dial-up Internet became widespread in the mid-1990s, but fears of losses to the state-owned telecoms provider from Internet telephony helped delay the official introduction of broadband until 2007. In the interim period, as many as 100,000 residents obtained faster access through unlicensed cable, microwave and satellite providers. The delay caused penetration rates to fall behind those of most Gulf Arab states, although the country remained ahead of other regional neighbours, with a total of 230,000 subscriptions in 2005, according to the ITU. Since the official introduction of broadband, penetration has increased, but costs remain high: for example, a 1Mb broadband connection typically costs more than $100 a month.
Source: Austro-Arab Trade Directory 2011.
The mentioned data are subject to modification. No responsibility is taken for the correctness of the details provided.
Last modified: 26 January 2011
|
