Lebanon Economy

by | May 23, 2022

Republic (10,400 km 2 with 2,126,325 residents in 1970) unitary presidential type. Due to its geographical position, and the influx of numerous Palestinian refugees – who have come to close to 200,000 units -, Lebanon has been severely affected by the events of recent years, which have resulted in the outbreak of a bloody civil war. between Christians and Muslims (see history, in this entry) which caused a serious collapse of the economy.

Prior to these events, Lebanon had experienced rapid economic growth: in the years 1956-66 the national income had increased by about 7% per annum, in real terms.

According to HEALTHINCLUDE, Lebanon was a small agricultural producer: the cultivated area (33.5%) included 85,000 hectares of irrigation. In the agricultural landscape 5 regions were distinguished: 1) the irrigated crops of the coastal region; 2) the non-irrigated fields of the western slopes; 3) the irrigated crops of the mountain areas; 4) the Beqaa crops; 5) mountain pastures. Alongside cereals, potatoes, onions, tomatoes, lentils were grown, especially in the innermost areas; in the E and NE slopes of Beirut citrus and apple tree crops were making significant progress, while banana groves had found favorable conditions in the well-sheltered coastal lowlands. These crops were flanked by the traditional ones of the olive tree, inconsistent in yield, and of the vine, the product of which was used, as well as for winemaking, to produce dried grapes. The country was, however, a major importer of food. Moreover, being almost completely devoid of mineral resources, it had a largely deficit trade balance, rebalanced however by the strong surplus of services (tourism and banks) and by an increase in industrial production following the closure of the Suez Canal.

Among the industrial activities, a steel plant built in the Jbeil area where iron ore deposits were found, oil refineries in Tripoli and Saida, at the end of the Iraq and Arabia oil pipelines, a large cement factory in Shiga in able to export part of the product; also cotton mills, a jute factory, and tobacco processing plants.

Tourism represented a fundamental resource for Lebanon: in 1974 over 2,200,000 tourists were registered. Today the accommodation facilities – in particular the numerous luxury hotels in the capital – have suffered very serious damage.

As a financial intermediary, after the collapse in 1966 of Intra Bank, one of the most important Lebanese banks, Lebanon recovered, helped in this also by the positive trend of the balance of payments, which since 1967 had consistently closed in surplus. Short-term capital deposits (mostly Arab deposits) had reached $ 150 million in 1970, and $ 300 million in 1972. The gradual closure of banks and the total transfer of foreign deposits marked the end of all business. financial.

Trade is also currently very small; in 1973 the port of Beirut had docked 3532 ships that had unloaded goods for 2.8 million tons; in the same period 720,000 tons of goods had been loaded. There were 123 ships flying the Lebanese flag with a total gross tonnage of 167,500 tons.

Finances. – With decree no. 10 all matters relating to the budget, the state, the municipalities and public bodies were reorganized. Control over public finances is attributed to the Court of Auditors, established by law April 16, 1951, modified by decree law January 1, 1953, n. 9 and with the legislative decree of 23 December 1954.

The state budget, normally in balance, amounted to 123.4 million Lebanese pounds in 1954, 137.5 million in 1955, and 194 million in 1958. More than half of its revenues are made up of indirect taxation and largely from oil royalties ; among the most important expenses are those for defense, which in 1957 exceeded 35 million, those for public works and communications (28.5 million) and those for public education (22.3 million).

In 1956, the bank of Syria and Lebanon which, even after the expiry of the French mandate, had exercised the function of central bank of the two states, was abolished and replaced by separate central institutions. The Lebanese banking system is therefore divided into a central bank, 35 credit institutions, 16 of which are foreign, and numerous small institutions authorized to carry out discount operations and to grant loans whose interest rate is generally very high. The official exchange rate is set at 2.19 Lebanese pounds per 1 US dollar; the free one at 3.16 pounds to the dollar.

Lebanon Economy