News / Middle East

Lebanon: Doom, Gloom and an Economic Boom

Beirut's unlikely economic boom can be seen in construction along the Corniche, 01 Sep 2010
Beirut's unlikely economic boom can be seen in construction along the Corniche, 01 Sep 2010



Pessimists have not been disappointed by Lebanon's recent history.  In the past few decades, it has suffered civil war, domination by Syria, occupation by Israel, assassinations, civil unrest, and just last month a border incident that brought worries of a new Israeli conflict.  Yet for all the instability, there is an optimism apparent on the avenues of Beirut, awash in luxury boutiques and in a skyline studded with high-end apartment buildings and five-star hotels.  There is an unlikely economic boom in the Lebanese capital.

The resilience can be seen in a painting propped up in the sleek Beirut office of real estate advisor Raja Makarem.  The stylized, black and white work shows the facade of an old building downtown; intricate, elegant and riddled with bullet holes.

It is not that Makarem needs a reminder of Lebanon's violent past.  "A couple of weeks ago I was offering a project to a friend of mine, quite a big project that is a $100 million, and I said, 'Aren't you scared?'" the director of the real estate firm Ramco recalled.  "And he said, 'No matter what happens, Lebanon is going to be the same, so I am not worried.'  We are used to it.  It can't be worse than what we had."

Lebanon succeeds while others struggle

Other countries have suffered similar hardships and their people have shown resilience, but few have been able to rise above instability quite the way Lebanon appears to have done.  Makarem argued that a quirk of Lebanon's story is that some of its success is rooted in its troubles.

He said that because of the instability, because of the problems, because of so many things, people, mainly developers, have been depending on financing themselves, auto-financing.  The land they buy is with 100 percent cash, and instead of borrowing money from the bank for development, they do pre-sale.  The real estate advisor said that when the international crisis hit, none of the developers had debts to the bank, and the country rode out the global recession.

Favorable banking and property laws

Lebanon's strong property laws also have played a role in boosting investor confidence.  Despite the chaos, the laws remained largely intact through the decades, so that even after the civil war, landowners were able to reclaim their rightful property.

Such traditional views also have helped keep the banking system strong.  Paul Salem, director of the Carnegie Middle East Center in Beirut said that "what also makes Lebanon attractive is the banking system, which maintains banking secrecy, which is almost unique now in the world, and hence as well as at a time when interest rates in Lebanon are fairly high, for deposits here."  He added that both Lebanese and Gulf capital investors also have a strong sense that the banks in Lebanon are in close cooperation, in close communication."

Salem said that cooperation extends to the banks keeping the government afloat, through financing debt and buying treasury bonds.  The government, in turn, guarantees the safety and solvency of the banks.  The political analyst said the inherent security of the arrangement attracts Arab investors from the Gulf, some of them shaken with the spectacular flame-outs of economies, such as Dubai's.

Instability is tempered by beautiful beaches

Lebanon also appeals to the same clientele for its more hospitable climate, mountains for skiing, Mediterranean beaches and a cosmopolitan air that is a product of its multi-religious, well-traveled citizens.

Real estate advisor Makarem said the same factors have brought investment from some of the millions in the Lebanese diaspora around the world.

Not that events do not continue to rattle.

Makarem said that "every time there is something serious happening, whether confrontation with Israel or local confrontation or whatever, people get scared a little bit and they calm down a little bit.  But the minute something positive happens ... you know, they got used to it.  There is a great confidence in the long-term future of the country."

As long as Lebanon maintains the systems it has kept in place during the upheavals, Makarem predicts that the investors will continue to come.

You May Like

Video Americans, Tourists, Reflect on Meaning of Thanksgiving

VOA garnered opinions from several people soon after November 13 Paris attacks, which colored many of their thoughts

Video Thais Send Security Concerns Down the River

In northern Thailand, the annual tradition of constructing floating baskets to carry away the year’s bad spirits highlights the Loy Krathong festival

Video Tree Houses - A Branch of American Dream

Workshops aimed at teaching people how to build tree houses have become widely popular in America in recent years

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs