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

IS Militants Release 49 Turkish Hostages

Turkey's state-run Anadolu news agency reports that no ransom was paid and no conditions accepted for the hostages' release; few details of the release are known More

Photogallery IS Attacks Send Thousands of Syrian Kurds Fleeing to Turkey

Syrian Observatory for Human Rights says more than 300 Kurdish fighters crossed into Syria from Turkey to defend a Kurdish area from attack by the Islamic militants More

Video Sierra Leone's Ebola Lockdown Continues

Thousands of health workers are going door to door in the West African country of 6 million, informing people of how to avoid Ebola, handing out soap 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.
Fears Ebola Outbreak ‘Beyond Our Capability to Contain’i
X
Jeff Seldin
September 20, 2014 10:28 PM
Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Fears Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid