Beirut's economic stamina
On the laptops of Lebanese ministers holding cabinet meetings, the results of the war appear as bleak data. The tourist season that Prime Minister Fuad Siniora hoped would contribute significantly in limiting the national deficit is finished. This is an economic sector that provides 70 percent of Lebanon's annual GDP of $5 billion. Thousands of tourists that arrived from the Gulf states, Jordan and other Arab countries, have fled in panic.
Lebanon's exports during the first five months of the year grew by 45 percent compared to the same period in 2005, but the blockade on the country has put an end to that. Lebanon can still import goods through Syria, but the absence of officials and workers from their normal places of employment is making normal commercial activity impossible.
The Lebanese stock market has closed down, but there is hope that it it will resume regular trade later in the week.
On the other hand, the ministers point to the $13 billion in foreign currency held in Lebanon's Central Bank, which is the result of excellent economic activity over the past 18 months.
Many of the smaller hotels that suffered the brunt of losses earlier in the fighting are now being compensated with the arrival of refugees from southern Lebanon.
In the past two days, Saudi Arabia also has extended $100 million in aid to Lebanon and a commitment to help with reconstruction after the war.
As such, the ability of Lebanon to economically withstand the onslaught is divided between the capabilities of the state and those of the people who have to bear the daily brunt of uncertainty.
A Jordanian economist who is familiar with Lebanon's economy says that "the problem at this moment is mostly psychological, rather than economic." He says that Siniora's statement that the country is losing billions "is meant to expedite a diplomatic solution and spur international pressure, but whoever takes a look at the data can be concerned about the aftermath of the war, but for now, the government of Lebanon realizes that it is not yet facing a real crisis."
Unlike the Palestinian Authority's situation, Lebanon is among friends like France, Germany and the United States, which are willing to assist its economy along with the massive infusion of capital from Saudi Arabia and Kuwait. The immediate question is whether the Lebanese government will be able to provide basic services, which until now it has not managed to do adequately.
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