Download Anya Moran Lebanon Effect of economic crisis of 2008 Despite the

Anya Moran
Lebanon
Effect of economic crisis of 2008
Despite the severity of the economic crisis in 2008, Lebanon has a stable freemarket economy and a secure laissez-faire commercial tradition. In a time when many
Western powers fear a lapse into recession, the Lebanese economy continues to thrive.
Lebanon’s remarkable ability to prosper amid the global recession has boosted investor
confidence, both at home and abroad. The Lebanese government does not restrict foreign
investment; however, the investment climate has struggled due to political corruption in
the past. The recent improvement in governmental strength has had a positive effect on
the economy. Lebanon continues to combat inefficiency and corruption in order to reduce
its national debt. The Lebanese economy is service-oriented; its main growth sectors
include banking and tourism.
In response to the global economic crisis Lebanon has further liberalized its
economy through the alleviation of trade and non-trade barriers. In order to improve the
nation’s economy, Lebanon is working to privatize public utilities and establish economic
openness and international trade in Syria. In fact the Lebanese government plans to
privatize both the electricity and telecoms sector. Although the action has been delayed as
some powerful politicians have long opposed plans to liberalize the two sectors. During
2008 tourism took severe plunge in Lebanon. This damaged the nation’s economy
because Lebanon is dependant upon tourists spending. Since 2008, tourism in Lebanon
has increased circulating more money into the Lebanese economy. In addition to
encouraging travel, the Lebanese government has constructed a strong banking sector
upon which the country relies for its financial regulation and economic stability. Thanks
to increased savings from Lebanese nationals living abroad, bank deposits grew by 20%
in 2009. Foreign exchange reserves also increased to a record level of 28.6 billion dollars.
Thus Lebanon encourages other nations to participate in foreign exchange reserves and
international investments.
Finance Minister, Raya Haffar Hassan has vowed to focus public spending on
number of key areas such as means of transport. Government officials are working to
establish a high-speed rail way in order to improve transport efficiency and alleviate the
considerable costs imposed by road traffic. New roads are also planned, with special
emphasis on integrating the underdeveloped northern regions into the economy. The
Lebanese government is attempting to modernize public education, to close the gap
between private and public education. In addition, the government hopes to create new
power plants which will relieve frequent power cuts and reduce high electricity prices.
Furthermore the government has promised to improve efficiency of the information and
communications technology sector, to facilitate private business activity and attract
foreign investment.
As a result of governments persistent effort Lebanon’s economy has seen rapid
growth in the past two years expanding by 9 percent in 2009, and more than 8 percent in
2008.