Part 477

Flag description: three horizontal bands of red (top), white (double width), and red with a green and brown cedar tree centered in the white band

Economy

Economy - overview: The 1975-91 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. Peace has enabled the central government to restore control in Beirut, begin collecting taxes, and regain access to key port and government facilities. Economic recovery has been helped by a financially sound banking system and resilient small- and medium-scale manufacturers, with family remittances, banking services, manufactured and farm exports, and international aid as the main sources of foreign exchange. Lebanon's economy has made impressive gains since Prime Minister HARIRI launched his $18 billion "Horizon 2000" reconstruction program in 1993. Real GDP grew 8% in 1994 and 7% in 1995 before Israel's Operation Grapes of Wrath in April 1996 stunted economic activity. During 1992-96, annual inflation fell from more than 170% to 10%, and foreign exchange reserves jumped to more than $4 billion from $1.4 billion. Burgeoning capital inflows have fueled foreign payments surpluses, and the Lebanese pound has remained relatively stable. Progress also has been made in rebuilding Lebanon's war-torn physical and financial infrastructure. Solidere, a $2-billion firm, is managing the reconstruction of Beirut's central business district, the stock market reopened in January 1996, and international banks and insurance companies are returning. The government nonetheless faces serious challenges in the economic arena. The government has had to fund reconstruction by tapping foreign exchange reserves and boosting borrowing. The stalled peace process and ongoing violence in southern Lebanon could spawn wider hostilities that would disrupt vital capital inflows. Furthermore, the gap between rich and poor has widened since HARIRI took office, sowing grassroots dissatisfaction over the skewed distribution of reconstruction's benefits and leading the government to shift its focus from rebuilding infrastructure to improving social conditions.

GDP: purchasing power parity - $13 billion (1996 est.)

GDP - real growth rate: 3.5% (1996 est.)

GDP - per capita: purchasing power parity - $3,400 (1996 est.)

GDP - composition by sector: agriculture: 13% industry: 28% services: 59% (1995 est.)

Inflation rate - consumer price index: 10% (1996 est.)

Labor force: total: 1 million plus as many as 1 million foreign workers by occupation: services 60%, industry 28%, agriculture 12% (1990 est.)

Unemployment rate: 20% (1996 est.)

Budget: revenues: $1.9 billion expenditures: $3.9 billion, including capital expenditures of $1 billion (1995 est.)

Industries: banking; food processing; textiles, jewelry; cement, oil refining, chemicals, metal fabricating, wood products

Industrial production growth rate: NA%

Electricity - capacity: 1.22 million kW (1994)

Electricity - production: 4.75 billion kWh (1994)

Electricity - consumption per capita: 1,285 kWh (1995 est.)

Agriculture - products: citrus, vegetables, potatoes, olives, tobacco, hemp (hashish); sheep, goats

Exports: total value : $1 billion (f.o.b., 1996 est.) commodities: paper and paper products 26%, food stuffs 16%, textiles and textile products 10%, jewelry 8%, metals and metal products 8%, electrical equipment and products 8%, chemical products 6%, transport vehicles 4% (1995) partners: Saudi Arabia 13%, Switzerland 12%, UAE 11%, Syria 9%, US 5%, Jordan 5% (1995)

Imports: total value: $7 billion (c.i.f., 1996 est.) commodities : machinery and transport equipment 28%, foodstuffs 20%, consumer goods 19%, chemicals 9%, textiles 5%, metals 5%, fuels 3% (1995) partners: Italy 19%, France 13%, US 12%, Germany 11%, UK 6%, Belgium 5%, Turkey 3% (1995)

Debt - external: $3 billion (1996 est.)

Economic aid: recipient: aid pledges of $3.5 billion for 1997-2001

Currency: 1 Lebanese pound (£L) = 100 piasters

Exchange rates: Lebanese pounds (£L) per US$1 - 1,550.8 (January 1997), 1,571.4 (1996), 1,621.4 (1995), 1,680.1 (1994), 1,741.4 (1993), 1,712.8 (1992)

Fiscal year: calendar year

@Lebanon:Communications

Telephones: 150,000 (1990 est.)

Telephone system: telecommunications system severely damaged by civil war; rebuilding well underway domestic: primarily microwave radio relay and cable international: satellite earth stations - 2 Intelsat (1 Indian Ocean and 1 Atlantic Ocean) (erratic operations); coaxial cable to Syria; microwave radio relay to Syria but inoperable beyond Syria to Jordan; 3 submarine coaxial cables

Radio broadcast stations: AM 5, FM 3, shortwave 1 note: government is licensing a limited number of the more than 100 AM and FM stations operated sporadically by various factions that sprang up during the civil war