Lebanon: Easy does it..

Abigail Fielding-Smith wrote in her blog on�"blogs.ft.com/beyond-brics/" today, about Lebanon and its political crisis ?while all eyes are focused on the Tunisian Turmoil.In her article, Abigail reminded the readers that the Lebanese government that collapsed only a week ago, is an unfortunate move that might hit badly the Lebanese economy and warned, "Economic growth may slow and bring losses at the country?s banks."� The article also shed light on the Lebanese economy and assured that the Lebanese investors did not panic. ?Despite years of war and political tension,�Lebanon has produced a resilient economy and�prudent policies that have helped accumulate $30bn of foreign currency reserves, among the world?s largest on a per capita basis." Furthermore, the article asserted that the Lebanese reserves have established a cushion and a buffer against instability for years, and has currently allowed Lebanon to cope with the increase in demand for dollars, especially in recent days, after the fall of Saad Hariri?s government, last week, which has caused shares in Solidere, "the country?s largest publicly-traded company, to drop 8.2 per cent in one day."The writer added, "Lebanon?s economy is something of a special case. Its economy has evolved to cope with near-constant political turbulence; between 1975 and 1990 the country fought a vicious civil war, in 2006, it was pounded by Israeli warplanes, and between 2006 and 2008 the cabinet was not able to meet, due to political divisions."Most deposits are held by Diaspora Lebanese, who tend to have a robust approach to political shocks, even in the 2006 war, capital outflows amounted to no more than 5 per cent of the deposit base." Notwithstanding the above reasons, and�even if the political tension does not escalate into violence, ?the combination of potentially slower economic growth and market uncertainties may hurt the Lebanese financial industry." The writer added; "�(...) the crisis is not without economic consequences. The uncertainty will delay much needed infrastructure investment without which current growth economic rates will be unsustainable."?For the moment, Beirut?s bars and restaurants, which became increasingly empty during the political stand-off of 2006-2008, are still thronging with people doing what the Lebanese economy needs them to do, consuming. But with no sign of a resolution to the ongoing political crisis in sight , the national appetite for sushi looks set to be tested in the coming months.? With Tunisia in turmoil, the big question is what's next for the Arab world?Edited by Hala Najjar-(Tayyar.org English Staff)

Source: http://www.tayyar.org/Tayyar/News/PoliticalNews/en-US/Lebanon-economy-2011-Hariri-tumbles-hn-1.htm

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