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

    Multimedia

    Audio

    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

    Can EU Survive a Brexit?

    Across Europe politicians are asking if the British vote to leave the European Union will set in motion dynamics that will see other member states leave too

    Video Entrepreneurs Tackle Sexual Harassment, Rural Health Care at Global Summit

    VOA talks to enterprising business people from India, Nigeria, Myanmar about their programs to help their respective countries overcome obstacles

    Key African Anti-Venom About to Permanently Run Out

    The tale of Fav-Afrique’s demise is a complicated one that reflects a deeper crisis brewing in global public health

    This forum has been closed.
    Comments
         
    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.
    Britain’s Vote to Leave EU Sends Shockwaves Through Global Marketsi
    X
    June 24, 2016 10:43 AM
    Britain’s historic decision to leave the European Union is sending shockwaves through global markets. Markets from Tokyo to Europe tumbled Friday under the uncertainty the ballot brings, while regional leaders in Asia took steps to limit the possible fallout. VOA’s Bill Ide has more from Beijing.
    Video

    Video Britain’s Vote to Leave EU Sends Shockwaves Through Global Markets

    Britain’s historic decision to leave the European Union is sending shockwaves through global markets. Markets from Tokyo to Europe tumbled Friday under the uncertainty the ballot brings, while regional leaders in Asia took steps to limit the possible fallout. VOA’s Bill Ide has more from Beijing.
    Video

    Video Tunisian Fishing Town Searches for Jobs, Local Development Solutions

    As the European Union tries to come to grips with its migrant crisis, some newcomers are leaving voluntarily. But those returning to their home countries face an uncertain future.  Five years after Tunisia's revolution, the tiny North African country is struggling with unrest, soaring unemployment and plummeting growth. From the southern Tunisian fishing town of Zarzis, Lisa Bryant takes a look for VOA at a search for local solutions.
    Video

    Video 'American Troops' in Russia Despite Tensions

    Historic battle re-enactment is a niche hobby with a fair number of adherents in Russia where past military victories are played-up by the Kremlin as a show of national strength. But, one group of World War II re-enactors in Moscow has the rare distinction of choosing to play western ally troops. VOA's Daniel Schearf explains.
    Video

    Video Experts: Very Few Killed in US Gun Violence Are Victims of Mass Shootings

    The deadly shooting at a Florida nightclub has reignited the debate in the U.S. over gun control. Although Congress doesn't provide government health agencies funds to study gun violence, public health experts say private research has helped them learn some things about the issue. VOA's Carol Pearson reports.
    Video

    Video Trump Unleashes Broadside Against Clinton to Try to Ease GOP Doubts

    Recent public opinion polls show Republican Donald Trump slipping behind Democrat Hillary Clinton in the presidential election matchup for November. Trump trails her both in fundraising and campaign organization, but he's intensifying his attacks on the former secretary of state. VOA National Correspondent Jim Malone reports.
    Video

    Video Muslim American Mayor Calls for Tolerance

    Syrian-born Mohamed Khairullah describes himself as "an American mayor who happens to be Muslim." As the three-term mayor of Prospect Park, New Jersey, he believes his town of 6,000 is an example of how ethnicity and religious beliefs should not determine a community's leadership. Ramon Taylor has this report from Prospect Park.
    Video

    Video Internal Rifts Over Syria Policy Could Be Headache for Next US President

    With the Obama administration showing little outward enthusiasm for adopting a more robust Syria policy, there is a strong likelihood that the internal discontent expressed by State Department employees will roll over to the next administration. VOA State Department correspondent Pam Dockins reports.
    Video

    Video Senegal to Park Colorful ‘Cars Rapide’ Permanently

    Brightly painted cars rapide are a hallmark of Dakar, offering residents a cheap way to get around the capital city since 1976. But the privately owned minibuses are scheduled to be parked for good in late 2018, as Ricci Shryock reports for VOA.
    Video

    Video Florida Gets $1 Million in Emergency Government Funding for Orlando

    The U.S. government has granted $1 million in emergency funding to the state of Florida to cover the costs linked to the June 12 massacre in Orlando. U.S. Attorney General Loretta Lynch announced the grant Tuesday in Orlando, where she met with survivors of the shooting attack that killed 49 people. Zlatica Hoke reports.
    Video

    Video How to Print Impossible Shapes with Metal

    3-D printing with metals is rapidly becoming more advanced. As printers become more affordable, the industry is partnering with universities to refine processes for manufacturing previously impossible things. A new 3-D printing lab aims to bring the new technology closer to everyday use. VOA's George Putic reports.
    Video

    Video Big Somali Community in Minnesota Observes Muslim Religious Feast

    Ramadan is widely observed in the north central US state of Minnesota, which a large Muslim community calls home. VOA Somali service reporter Mohmud Masadde files this report from Minneapolis, the state's biggest city.
    Video

    Video During Ramadan, Faith and Football Converge in Lebanon’s Megadome

    In Beirut, a group of young entrepreneurs has combined its Muslim faith and love of football to create the city's newest landmark: a large, Ramadan-ready dome primed for one of the biggest football (soccer) tournaments in the world. But as the faithful embrace the communal spirit of Islam’s holy month, it is not just those breaking their fasts that are welcome.

    Special Report

    Adrift The Invisible African Diaspora