Monday, April 27, 2009

Lebanon: "comically turbulent"

The Economist:
Lebanon’s GDP grew during 2008, not at an annual rate of 7.5%, it seems, but at 9% or better. Yet even that trend-bucking number looks modest compared to other milestones scored by this small, almost comically turbulent country. Last year the value of deposits in Lebanese commercial banks rose by 15% to an impressive $94 billion, equal to 327% of GDP. Industrial exports surged 24%. Tax revenues, tourist arrivals, banking profits and the number of construction permits all soared by a third or more. A giant 46% leap in net capital inflows helped Lebanon post a record $3.5 billion surplus in its balance of payments, and boosted the Banque du Liban’s own reserves to a cosy $22 billion, nearly double its holdings a year ago.
The ironic truth is that the country’s double curse, of chaotic internal politics and being located in a nasty neighbourhood, are proving helpful for a change. For one thing, they have made Lebanese bankers unusually wary and resourceful. Four years ago, for instance, the Banque du Liban’s stern and far-sighted head, Riad Salameh, banned any dealing in such tricky foreign instruments as mortgage-linked securities. And while banks, property developers and service vendors raked in business as private cash spilled out of the oil-enriched Gulf, competition between influence-seeking powers brought a windfall in aid for reconstruction following the ruinous 2006 war with Israel. Iran alone has injected perhaps $1 billion to rebuild the heavily bomb-damaged parts of Beirut run by its protégé militia, Hizbullah.
As is so often the case, thanks to Marginal Revolution for the pointer.


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Anonymous Mortgage PA said...

It would surely grow more each year.

7:49 AM  

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