Lebanese economy suffers from structural ills that curtail growth and employment

The World Bank said that the Lebanese economy is suffering from numerous structural hurdles which curtailed its growth and its capacity to create employment and hence undermined the chance of ending poverty and inequality. In its report entitled ‘Promoting Reduced Poverty and Common Prosperity- Systematic Diagnosis of Lebanon 2015’, the World Bank noted an a domestic growth rate of 12.9% in the period between 1991 and 1995, dropping to 1.7% with the outbreak of the war in Syria in 2011. According to WB data, real economic growth rate recoded 4.4% for the period of 1997-2009, against only 1.1% for employment. The report pointed out to three key sectors which contributed to the creation of jobs in 2004-2009: trade (created some 100 thousand new jobs), services (50 thousand jobs) and construction (16 thousand jobs). However, the World Bank study noted that the economy’s major dependence on the service sector - which accounted to nearly 74% of the GDP between 1997 and 2011 and which was hit by various security and political crisis, led to major cuts in employment opportunities especially for qualified persons. The study also revealed that the capacity of business institutions to create jobs was hampered by various factors, namely political instability, weak infrastructure, particularly electricity supply, and corruption. In addition, the WB highlighted the fact that financial institutions do not provide adequate support to small or medium enterprises. (L’Orient Le Jour, 14 July 2015)