Report by: Joseph Farah

Translated by: Aline Aoun, Lina Yahya

NNA - The Federation of Arab News Agencies (FANA) published, within its monthly economic file, on Wednesday a report prepared by journalist Joseph Farah at National News Agency in which he spotted the light on the economic situation in Lebanon in light of the political and security situation that prevails in the country and its impact on the national economy growth.

The outcry of the economic bodies in Lebanon at "Biel" in June 2013 to preserve Lebanon and its economy has not found enough listening ears.

"Growth rate has reached less than %2 according to the experts estimations due to the failure of tourism season on which Lebanon relies," according to NNA field reporter.

Head of the economic bodies in Lebanon Former Minister Adnan Qassar, has been trying, in vain, to gather what has been left of this economy, rejecting "to take the country and the economy as a hostage of adventures and pushing us to the unknown".

Qassar called upon forming a new cabinet that shoulders its responsibilities, considering that the formation of such a cabinet could fill the vacuum that paralyzes all the state's facilities and could revive the economy.

He added that the economic figures in the country would be able to obviate the current decline if the appropriate situation and political atmosphere were found.

All economic indicators were negative in 2013 except for the banking sector which registered a growth that exceeded 8%, the financial expectations within the framework of ongoing interactions between the Lebanese-- residents and expats -- and the revival movement in the Beirut Port.

"The political-security stability alone would revive the economy and the various economic sectors, and if this were correct, Lebanon might have missed several golden opportunities, the most recent is the repercussions of the "Arab Spring", which came negative contrary to all expectations, especially regarding the displaced Syrians which have came equal to one third of the Lebanese people living in the country.

He stressed that this presence, its economic and social burden, in addition to the humane tragedy, has become a threat to the Lebanese wellbeing.

"This economic scene sets Lebanon in a sliding direction given the political coma," Qassar said.

Growth was 8% in 2010 and has deteriorated currently to 1.5% despite that the international monetary fund expected the percentage to be 2% in 2013. Tourism has deteriorated as the number of tourists declined to 12% at the first half of 2013 compared to the same period of 2012. Thus, the tourism expenditures declined from 8 billion dollars in 2010 to about 4 billion dollars in 2013.

The Dean of hotels owners and head of Tourism Institutions Pierre Ashkar confirmed that the hotels' sector revenue fell by 54% in comparison with that of 2009 and 2010, despite the discounts offered by the hotels and which exceeded 30%.

In light of the situation in Syria, the Syrians used Rafic Hariri International airport to travel, which caused a growth of 17% in ticketing movement and which led to a growth of 7% in passengers movement in the airport.

Thus, the tourism sector which Lebanon used to highly depend on has become in need to a savor given the outcry of those working in this sector.

"Tourist maritime complexes head Jean Beyrouti has asked previously Caretaker Prime Minister Najib Mikati to invite the Supreme Commission for Tourism to an extraordinary meeting to save what can be saved before the destruction of the sector," NNA reporter added.

As for the agriculture and industrial sectors, the regional developments continued to affect them negatively just as they affected other economic sectors.

Trade Balance

Industrial exports raised 13.5% compared to the same period of last year (2012), as minerals ranked first in the list of exports, knowing that diesel is included within the mineral exports to Syria. Arab countries were the main market for the Lebanese exports of which Syria topped the first place after Saudi Arabia was the first importer of Lebanon's products.

The raise in industrial exports was due to exporting by sea, even at a higher cost, instead of that by land which was negatively affected by the security developments in Syria.

In this context the Trade Industry Balance maintained the level which was registered in the first half of 2012.

The exports of the agricultural sector rose by 34.4%; in short, what was said about the industrial sector can be said about the agricultural sector.

However, the real estate sector is undergoing a state of alert and slowdown due to the drop in demand, where the focus is on small-sized apartments despite the measures taken by the Central Bank of Lebanon which contributed in injecting liquidity into the markets and maintaining stability to this sector.

The real estate sales value has dropped by 8.1 percent compared with last year, as the sales for foreigners have dropped by about 8.6 percent.

Beirut Traders Association

Talking about the Trade sector, the outcry of the head of Beirut Traders Association, Nicolas Shammas, still echoes in the ears of the officials and citizens as some trade shops are closing or moving towards bankruptcy.

The commercial sector is deteriorating, according to Shammas who confirmed that some traders lost their businesses because they were no longer able to pay their dues, the income tax or the VAT.

Banking Sector

The banking sector still enjoys domestic, regional and even international trust due to the cautious management, the instructions of the monetary authorities and abundance in liquidity.

These factors have led to a growth rate of 8% where the banking sector assets have reached $157.9 billion in June 2013.

The additional volume of deposits amounting to $ 6.3 billion came relatively larger than the growth of deposits in the same period last year, reflecting the ability of Lebanese banks to attract funds of residents and non-residents, even in tough times.

This sector has faced many challenges and managed to overcome them despite being in areas that are exposed to security disturbances, international warnings and sanctions against Syria in addition to fighting against money laundering, not to mention the political instability and security, which negatively affect the loan and investment movement in the country.

The foreign exchange reserves in the Central Bank of Lebanon have reached more than $ 36 billion, an amount that is sufficient in order to keep the said Bank the key player in the Lebanese currency market, giving stability to the Lebanese pound.

Port of Beirut

As for the Port of Beirut, it still registers the record quantities of imported and exported goods and the movement of containers and vehicles, despite the worsening internal crises and serious security incidents in the region. These figures have reflected positively on the total banking imports.

The Head of International Chamber of Shipping, Elie Zakhour, said that the direct cause of this outcome was the transformation of Lebanon into a stop station for goods to cover the Syrian market, due to the economic sanctions imposed upon it.

"The Syrian crisis pushed Lebanese merchants to convert goods exported and imported by land through Syria to Beirut port, for safety reasons," Zakhour explained.

As a conclusion, we can say that "the Lebanese economy is in Intensive Care."

"It would have been long gone if it weren't for the banking and port sectors," the NNA field reporter concluded.

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