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

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

Audio 'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book More

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.
Study: Insecticide Damaging Wild Bee Populationsi
X
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.
Video

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.
Video

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.
Video

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.
Video

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.
Video

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.
Video

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.
Video

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.
Video

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.
Video

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs