The Lebanese economy started a rehabilitation process after the conclusion of the Civil War in the country which lasted between 1975 - 1991. The civil war did much to damage Lebanon's economy and as a result massive investments had to be made for reconstruction purposes. Lacking natural and financial resources, Lebanon found   borrowing as the speediest and most available method for the provision of financial resources the reconstruction of the country. As a result, today Lebanon is one of the most heavily indebted countries in the region. The debt has since been rescheduled and Lebanon has managed to acquire more soft loans to assist with the repayment programs, nevertheless it is one of the biggest burdens of the Lebanese economy.

Reform of the economy is a recommended goal for the Lebanese government by its lenders. The reason behind the calls for reform is to enable the Lebanese economy to expand and to pay for the reconstruction of the country. Reforms are also aimed at reducing unemployment and to increase the welfare of Lebanon's citizens. Increased privatisation of government owned companies is one of the pillars of the reform program for the Lebanese economy. However this process has been quite unsuccessful due to political infighting and lack of consensus. Therefore not only are the government owned companies not producing the funds required to pay Lebanon's debts, they are also draining the Lebanese budget with their excessive costs. Furthermore many such government owned companies are inefficient and/or operate in a monopolistic fashion, thus creating inefficiency and causing excessive costs for Lebanese businesses.   The political instability and lack of political consensus regarding expenditure cuts has also hampered efforts to eliminate the budget deficit, which is another drain on the Lebanese economy.

Lebanon will not be able to achieve its full economic potential until the Lebanese government supports the reform program, a major part of which is the privatisation scheme. However until this happens, the Lebanese economy continues to take advantage from the following resources which provide the country with its income and also act as a magnet for foreign investors:

•  Remittances from Lebanese Abroad

•  Good education system - Lebanon has one of the most educated populations in the Middle East

•  Banking sector - Lebanon has been called the "Switzerland of the Middle East" due to the credibility and strength of its banking sector

•  Construction sector - Lebanon has one of the fastest rising real estate markets in the Middle East

•  Growing Information Technology sector

•  Top destination for Arab investment

•  Increasing Trade with Arab and EU countries

Calls for the reform and fight against corruption were one of the main issues on top of the election agenda, especially by Michel Aoun's Free Patriotic Movement coalition.

By: Meir Javedanfar- www.meepas.com

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