Discovering the Pearl of the East
ECONOMIC revival is under way in lebanon, which is employing its traditional flair for enterprise to reestablish itself as a platform for business in the region

Lebanonís capital Beirut is a vibrant, cosmopolitan city where Western and Middle eastern cultures meet

LEBANON sits at the heart of the Middle East. Bordered by Syria, Israel and the eastern Mediterranean sea, it is a land of great natural beauty with a rich and diverse culture, once known as the Pearl of the East.

The strategic position of Lebanon, its traditional expertise in banking, and the business ability of its people make it well placed to serve as a regional and international center for trade, finance, services, and tourism.

The economy has recently benefited from a substantial increase in exports, a significant increase in the number of tourists, and an influx of capital into the country. GDP rose by nearly 3% in 2003, and is forecast to do the same in 2004.

According to President Emile Lahoud, “Lebanon is capable of generating sustained growth, because it has maintained its historic free market orientation based upon minimal state intervention, unrestricted capital movement, a fully convertible currency, and a high degree of openness.”
In the almost 15 years since the end of the civil war, remarkable progress has been made in rebuilding the country’s political institutions and its economic and physical infrastructure.

Minister of Economy and Trade Marwan Hamadé says Lebanon has regained its independence and security, and it is now one of the safest countries in the region. “Over the last ten years, the country has become a stable business platform for the Middle East,” he declares. “Beirut remains the city of choice for the Arab investor and tourist.”

MARWAN HAMADÉ
MARWAN HAMAD… Minister of Economy and Trade

The government is pledged to economic and financial reforms agreed at the Paris II conference in 2002 in return for help in dealing with Lebanon’s sizeable domestic debt. Support from international donors has boosted investor confidence, and foreign direct investment—particularly from Arab states—is on a markedly upward trend.

Minister of Finance Fouad Siniora admits the process of reform is challenging, but adds that willingness to adapt is a characteristic that differentiates Lebanon from other states in the neighborhood. “Terrific changes have been going on. The country feels dynamic, and ultimately the economy will gain.”

Human resources are widely recognized as being among Lebanon’s greatest assets, and the Lebanese have a well-established reputation for enterprise. “We have to be creative because this is a small country and to compete you have to come up with ideas,” says Minister of Industry Elias J. Skaff. “We have good companies and good quality products, such as our wine and olive oil.”

An association agreement with the European Union has been ratified, and current negotiations are expected to result in Lebanon becoming a full member in the World Trade Organization (WTO) in 2005. In preparation, the government is in the process of modernizing the country’s laws regarding intellectual property, agriculture, competition, trade, and antidumping.

Lebanon is a signatory to the Arab Free Trade Area Agreement (GAFTA), and, in an effort to eliminate trade barriers and speed up Arab economic integration, has signed trade deals with Syria, Egypt, Iraq, Jordan, and the United Arab Emirates.

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