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	Lebanon		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   ECONOMIC SECTORS   INVESTMENT ISSUES   PROJECTS   PROSPECTS

Investment Issues Public Finance As noted, the government's budget deficit remains one of Lebanon's most important and pressing economic problems. The budget has been in chronic deficit throughout the last decade as the government continued to pay its employees and to supply goods, despite its inability to collect sufficient revenues. The deficit has been financed by borrowing from the banking sector. As reconstruction takes off, capital expenditures are expected to increase dramatically, with a consequential sharp rise in the overall fiscal deficit in the absence of fiscal adjustment. Since 1992, the government has taken a number of practical measures to reduce the deficit and to maintain a stable budget. These include the regulation of public expenditure and steps to increase internal revenues. The huge structural imbalance in Lebanon's trade has also restricted growth. The manufacturing sector is not sufficiently developed to provide an alternative to imported consumer goods or production input. The result is that economic activity remains almost entirely dependent on imports. 1993 - 2003 Budgetary Allocations Transportation US$ 2,969 billion   Water Supply US$ 930.0 million Electricity US$ 1,645 billion   Government Buildings US$ 270.0 million Education US$ 1,530 billion   Solid Waste US$ 180.0 million Housing and Resettlement US$ 1,050 billion   Tourism US$ 188.7 million Telecommunications US$ 715.0 million   Social Affairs US$ 130.0 million Agriculture and Irrigation US$ 650.0 million   Management and Implementation US$ 150.2 million Public Health US$ 500.3 million   Private Sector Services US$ 100.6 million Wastewater Treatment US$ 500.3 million   Information US$ 50.0 million Industry US$ 394.9 million   Environment US$  35.0 million Privatization The Lebanese government habeen making fairly modest steps towards privatization. One project that seems likely to get off the ground is the expansion and management of the port of Sidon. Consideration is also being given to the private management of the port of Beirut. Plans are being drawn for the private operation of the postal service under a twelve year concession. The US$ 50 million opwill cover the entire country and will entail mail handling, gathering, sorting, distribution, the installation of postal boxes, express mail, facsimile services and stamp sales. Stock Exchange The Beirut Stock Exchange (BSE) was reopened in the beginning of 1996, after more than eleven years of inactivity. The BSE is considered to be an important financial tool which will assist in stimulating the Lebanese economy by attracting capital to the country. Currently, there are only a few securities traded on the BSE, and it does not meet international stock exchange standards. In addition, the BSE faces fierce competition from the Tel-Aviv Stock Exchange. The Lebanese government intends to increase the level of trade on the BSE by developing its exchange standards, enhancing technological support, and offering attractive tax rates and liberal currency regulations to foreign investors. Previous Chapter Contents Menu Next Chapter

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