By Elie Obeid
Lebanon, it’s that country in the Middle East that you sometimes miss while going through a map. Despite its small size, Lebanon enjoyed quite a reputation in the 1960s and early 1970s as being the Switzerland of the Middle East, and Beirut, its capital, was known as the Paris of the Middle East due to the number of tourists it attracted and its role as a financial and trade hub for the region.
In recent years, however, Lebanon has been suffering from various social, political, economic problems. To discuss all these issues and possible solutions for them would require volumes so we’ll stick to economics this time with a little twist of politics. But before getting into that, how about we take a look at the numbers first.
Lebanon is a country with a population of about 4.5 million and a total GDP of $44.35 billion in 2013, according to the World Bank. Economic growth has been slowing: in 2014 Lebanon’s GDP grew by 1.5 percent, up from 0.9 percent in 2013 but dramatically lower than the 8 percent growth experienced in 2010. Lebanon’s public debt currently stands at $66.1bn and is expected to rise to $71 billion by the end of 2015, according to the Lebanese Finance minister Ali Hassan Khalil. All this is exacerbated by the fact that unemployment in Lebanon has reached 24 percent with youth unemployment standing at 35 percent, according to the International Labor Organisation.
One can’t study what led Lebanon to this situation without looking at the effects both politics and geopolitics have had on its economy. Lebanon borders the Mediterranean Sea on one side and Syria, Jordan, and Israel on the other. Due to this geopolitical position Lebanon was always subject to political interference from neighboring countries and is directly affected by any disturbance that may occur within these countries. After the Lebanese Civil War ended in 1990, the Lebanese economy saw huge investments in the tourism and services sector, making it the biggest sector of the economy while other sectors suffered somewhat from negligence.
In the past decade Lebanon has welcomed 2 to 3 million visitors per year, but in the last few years and due to the turmoil in the region and the war in Syria in particular — and some internal disturbances that led to a one-year presidential vacancy and dysfunctional institutions — the situation changed dramatically. Western tourists feared for their lives and refrained from visiting Lebanon, while their Arab counterparts who mostly used to come by land could no longer do so and turned towards other destinations. On top of it all Lebanon, whose government refused to deal with the refugee crisis at its beginning, now hosts over 2 million Syrian refugees putting more pressure on an already burdened economy.
Lebanese youth, faced with all these challenges and a lack of job opportunities for the almost 26,000 university graduates entering the workforce each year, have started looking for other career and development options. Some of them went on to leave the country and seek work abroad, contributing to the brain drain that Lebanon has suffered from for years. Others settled on finding any job to support themselves. Some became part of the unfortunate 35 percent who are unemployed while others decided to take the challenge head-on and create their own startups, leading towards the creation of an entrepreneurship culture among the Lebanese youth and the Lebanese in general. But entrepreneurship still faces many obstacles like access to finance, mentorship and training, a developed culture of entrepreneurship in Lebanon, and low risk tolerance, among others.
Today more than ever Lebanese youth have a golden opportunity to take control of their own destinies and to clear the path for future generations to do so, but they need a clear commitment from their government to create an ecosystem that both promotes and nurtures entrepreneurship. John F. Kennedy once said: “The future promise of any nation can be directly measured by the present prospects of its youth.” Now is the time for action. Failure not only contributes to the ongoing Lebanese brain drain. The future of our nation is in danger and delaying action for one minute might just be a minute too late.
Elie Obeid is a Leaders for Democracy Fellow from Lebanon.