Lebanon — January 2009

Sociopolitical Situation

Following the Doha agreement, the second half of 2008 was relatively stable. In June, a new cabinet that represents Lebanon’s first full-fledged government since November 2006 was formed. The new 30-member cabinet faces daunting challenges, including the containment of renewed sectarian tensions, preparation for new elections next year, and addressing the difficult subject of Hezbollah’s weapons. Despite the cabinet’s formation, sectarian tensions remain a serious concern in the country.

For the first time, Syria established formal diplomatic relations with Lebanon. It is Syria’s first formal recognition of Lebanese sovereignty since both countries gained independence from France in the 1940’s.

Though Lebanon’s economic activity over the past nine months of the year was buoyant, the country still faces great challenges at all levels, with a gross public debt reaching $45 billion; inflation reaching its highest levels, estimated at 11.5%; and a budget deficit nearly $4 billion. Furthermore, the purchasing power of an average household has declined by more than 15% and economic growth has fallen over the last three past years. The rising costs of food, fuel, electricity, oil and transport are becoming an increasingly unbearable burden for the Lebanese people. Statistics indicate that around 5% of the population today suffers from extreme poverty and up to a quarter are poor.

The deterioration of the socioeconomic situation is not limited to the domains of income and poverty, but reaches strategically critical issues to the welfare of society such as education at all levels and health care.

Amid the global turmoil that actually began 13 months ago, Lebanon’s economy showed financial resilience as a result of its strict regulatory and supervisory regime, conservative banking practices and certain structural economic factors, such as the recurrence and non-speculative nature of capital inflows to the domestic economy. Nevertheless, the global liquidity freeze could increase pressure on the Lebanese state, which needs both to turn over a large volume of local and foreign currency debt instruments on a regular basis, and to take on new debt to finance its persistently large budget deficit.

Already, Lebanon has started to feel the pinch of the global financial crisis through exposure to the Gulf economies, which employ a third of its workforce. Around 350,000 Lebanese work in the Gulf region, earning four times the income of workers in Lebanon. They have been supporting the domestic economy through remittances to families, property purchases and regular trips home. Some Lebanese have already started returning from the Gulf, laid off by their employers seeking to deal with the fallout of the global financial crisis.

Religious Situation

Despite displacement and emigration, Christians in Lebanon may still represent about 40% of the total population. Christians expect their religious leaders to play leading roles, reaching all aspects of life, whether political, economical or social.

On the economic level, the church in Lebanon will need continuous support if it is to continue its services, such as education, health care and pastoral life. It cannot continue to depend on its own diminishing resources to maintain these services. Consequently, the Maronite patriarchate took the lead and created an investment fund with a basic capital of $40 million to create around 2,000 new job opportunities on one hand and to provide the church with an efficient modern partnership with lay persons and the private sector on the other.

On the political level, a spiritual summit among different Christian and Muslim religious leaders was held in June, whereby they condemned fanaticism and violence and called for a national dialogue aimed at consolidating the unity of the country.

On the religious level, a Christian-Muslim Youth seminar entitled, “Religion as a Tool of Establishing National Peace,” was organized by the Middle East Council of Churches in August and attracted 35 young Christians and Muslims representatives who tackled issues of religion and diversity, overcoming violence and establishing peace.

On the social level, a conference was held in October, where a steering committee of religious leaders from all faiths in Lebanon hosted interactive workshops for other prominent members of religious communities in an effort to raise awareness about HIV and AIDS.

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