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Survival of the consumer society
In the 1960s and early 1970s,
the economic debate between what was then termed the ‘right’ and the ‘left’
focused on several issues, with the first camp stressing the importance of
Lebanon as a service economy (mainly in tourism, insurance and banking) while
the opposing group focused on the need to develop the agricultural and
industrial sectors. The ‘right’ argued against corporate and progressive income
taxes and the ‘left’ criticized the tax system as unfair.
Those debates persisted during the civil war along with overriding regional and
national issues, but many in both camps have since changed their minds and
forgotten what the argument was all about. Now, we are left with a country whose
economic sectors all function below optimal production levels. The tourism
industry, which recently recorded a slight improvement is now on the decline as
a result of the war on Iraq. In March, there was a drop of over 34% in airport
activity from the previous year, with hotel occupancy rates hovering at a mere
15%. Most of the beaches of Lebanon are inaccessible to the public or tourists
and pollution continues to be a major impediment to the industry. Official
statistics put tourism’s contribution to the GDP in the year 2000 at around 9%,
compared with a figure of 19.4% in 1974.
On the other hand, the agriculture sector’s contribution to the GDP rose from
9.2% in 1974 to 12% in 2000, while the industrial sector rose from 16.8% to 18%
for the same period. As for services and commerce (including the public sector),
it still represents approximately two-thirds of the country’s GDP (69.6% in
1964, 54.8% in 1974 and 61% in 2000) with banking and insurance contributing
only 7.5%.
Who has won the debate? Obviously neither camp since the government is still a
major contributor to the services sector. In fact, the agricultural and
industrial sectors are stagnant and tourism is not flourishing. What we now have
is not a service economy, nor a productive one. As usual, we invented a new
model: a consumer society that produces almost nothing (the import/export ratio
is 7:1) and continues to survive.
How do we manage to pay what we owe when we are not producing? We don’t need to
look any further than figures on emigration, national debt and foreign grants
combined with our tilted scale of values for the answer. What about the ‘left’
and the ‘right’ debate? It is no more; the sects of Lebanon now dominate the
scene, while the economic debate, instead of tackling the dilemma of badly
invested human and financial capital, will soon center on the need to hold a
Paris III and IV, as if we are the focal point of the world.
Jawad Adra
Managing Partner
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Current Statistics
Telé Liban
• LL 211 million equals the monthly cost of operating Telé Liban
following a round of layoffs and its return on the air.
Airport activity
• 67,000 fewer travellers came through Beirut International Airport in March
2003, compared to the same period last year. Inbound travellers dropped from
96,300 to 59,180 while outbound travellers fell from 92,000 to 62,000.
National Social Security Fund (NSSF)
• LL 210 billion in end-of-service indemnities was paid out by the NSSF in 2002
for approximately 14,000 cases.
Public debt
• LL 723 billion is the interest on Lebanon’s public debt for January and
February 2003, compared with LL 747 billion for the same period last year.
Emergency funds
• LL 10 billion in compensation for damages caused
by winter flooding was allocated to the Higher Relief Committee by the
government in March 2003.
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