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Atlas of Lebanon

Part 3 - An Unbalanced Econoy: the Growth of Inequality

An Unsustainable Growth

Bruno Dewailly

Texte intégral

1Distinctly service-oriented, the Lebanese economy is characterized by a limited production of tradable commodities despite several potential competitive advantages (location, geographic diversity, high level of education, low labor costs, powerful diaspora, etc.), which could boost the international competitiveness of its companies. The regional and national instability, the failures of public infrastructure (power supply, water, etc.), as well as a clear preference for speculative investments lead to and show a lack of trust from local economic actors in undertakings that could help achieve a more sustainable wealth growth.

An increasingly service-based economy and the predominance of non-tradable goods

2Lebanon is known for having developed early on an economy based on trade and services. Overall, 77% of the production value comes from the tertiary sector, which accounted for 72.6% of total employment in 2009. The service-related activities are diverse (health care, finance, real estate, urban services, etc.) and some, which are quite old (banking, education, tourism), benefit from a significant regional and international reputation. Consequently, the portion of the total value related to the primary and secondary sectors (respectively 6 and 21% of the employees in 2009) has strongly decreased over the past 40 years. They only made up for 4% and 19% of the total value in 2013 while the added value of the products remained low. This economic orientation indicates that the political class has had little interest in these sectors despite their potential.

3The classification system used for statistics hardly shows the preponderance of the activities related to real estate development, which is distributed over several sectors (quarries, building industry, real estate, banking). By definition, the corresponding goods are mostly non-tradable. They attract some foreign capital flows but are mostly inscribed in an economy which is marked by short-termism and speculation, and generates excessive external costs (inflation related to real estate, bypassing or failure to respect planning and building regulations, environmental damage, etc.). This economic rationale and its costs considerably slow down the sustainable development of the country and, among others, contribute to brain drain and recurrent instability.

Figure III-17: Value and composition of Lebanon’s GDP (2004-2013)

Figure III-17: Value and composition of Lebanon’s GDP (2004-2013)

Agriculture, industry and tourism: under-exploited potentials

4In 2014, animal production accounted for 39% of the value related to the agricultural sector (including aviculture, 47%, and milk production, 21%). Arboriculture amounted to 19% (apples, bananas, citrus fruits, table grapes). However, in terms of food production, Lebanon is not self-sufficient, despite the fact that the country benefits from considerable geographic advantages (climate, resources, ecological diversity, location, etc.). In addition, its skill set could facilitate productions on a larger scale and with a higher added value, such as vine-growing, one of the rare crops (along the illicit ones) for which the planting area has been increasing. Since 2010, the growth in value of the main agricultural products has mostly relied on cumulative inflation (21%) and on an increase in the demand for basic goods due to the inflow of refugees.

5The relative share of the industrial activities in the GDP has been growing more slowly than the latter. In 2014, industrial employment only accounted for 85,000 employees spread across approximately 8,000 entities. The Lebanese industrial fabric is thus mostly composed of SMEs, which hints at a true entrepreneurial culture. The medium-sized enterprises are mostly located in the center of the country (Greater Beirut, Zahleh) while the urban areas of Tripoli, Saida and the peripheral regions host mainly micro-entities. At the end of the 2000s, the four main sectors (food production, non-metallic mineral materials, metallic materials and products, repairs) employed 66% of the workforce but only accounted for 55% of the created added value.

Figure III-18: Agricultural production

Figure III-18: Agricultural production

Figure III-19: Industrial employment in 2007 by sector in Lebanon in 2010 and 2014

Figure III-19: Industrial employment in 2007 by sector in Lebanon in 2010 and 2014

Figure III-20: Industrial production by sector in 2009

Figure III-20: Industrial production by sector in 2009

6The tourism sector also suffers from changing context, lack of diversification, and international competition. In 2013, it amounted to 6.5% of the GDP, including 2.5% related to the hotel trade and restaurant industry (to 3.1% in 2007). Usually boosted by hotels and restaurants targeting business travelers, the diaspora, and clients from the Gulf region, the sector has been experiencing a decrease in the number of clients since 2010. However, the demand for hotel rooms started to increase again in 2013 and has since stabilized thanks to a stronger domestic demand and the inflow of refugees.

Figure III-21: Hotel nights in Lebanon by nationality, 2007-2013

Figure III-21: Hotel nights in Lebanon by nationality, 2007-2013

Table des illustrations

Titre Figure III-17: Value and composition of Lebanon’s GDP (2004-2013)
URL http://books.openedition.org/ifpo/docannexe/image/13242/img-1.png
Fichier image/, 47k
Titre Figure III-18: Agricultural production
URL http://books.openedition.org/ifpo/docannexe/image/13242/img-2.png
Fichier image/, 23k
Titre Figure III-19: Industrial employment in 2007 by sector in Lebanon in 2010 and 2014
URL http://books.openedition.org/ifpo/docannexe/image/13242/img-3.png
Fichier image/, 120k
Titre Figure III-20: Industrial production by sector in 2009
URL http://books.openedition.org/ifpo/docannexe/image/13242/img-4.png
Fichier image/, 60k
Titre Figure III-21: Hotel nights in Lebanon by nationality, 2007-2013
URL http://books.openedition.org/ifpo/docannexe/image/13242/img-5.png
Fichier image/, 40k

© Presses de l’Ifpo, 2019

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