Structure: Due to the political and social fabric woven thick with sectarianism, the Lebanese laissez-faire commercial economy is “forced to embrace not only free enterprise but a large measure of political feudalism and sectarianism as well” (Raphaeli 2009, 109). The free market function was a direct importation from the US after WWII when the Christian authorities wanted to associate more with the West (Gates in Raphaeli 2009,. 109). This outward orientation along with its “world class international banking system” has allowed it to withstand the various conflicts in the country (Raphaeli 2009, 109).
Sectors: The Lebanese Economy is primarily based on the service sector. In 2016, World Bank dated indicated the following distribution as % of GDP
Agriculture 4%
Industry 17% (The major subsectors include: food industry)
Services 79% (The major subsectors include: commerce, tourism, and financial services)
Labour: According to the International Labour Organization (ILO), two-thirds of the Lebanese population is of working age, while one one-third is actually working. This is comparatively low compared to other OECD countries. (Note: the last survey on labour statistics were collected in 2009. In 2017, Lebanon’s Central Administration for Statistics (CAS) and the ILO announced a collaboration with EU funding to produce reliable, timely and representative statistical data on the current condition of work in the country.) http://www.ilo.org/beirut/projects/WCMS_340472/lang–en/index.htm
Raphaeli notes that this is due to low participation of women in the economy or their informal labour being unaccounted for in statistics (Raphaeli 2009, 110).
Markets: According to the ILO’s assessment, “micro-, small-, and medium sized enterprises have historically been among the most important sources of employment and income in Lebanon and are expected to continue to be central to the provision of livelihoods and sustainable employment opportunities for the various population segments most in need of support” (Raphaeli 2009, 111).
In the fall of 2017, Lebanon found potential oil reserves and acquired its first petroleum licensing round. In December, “the Lebanese government approved the bid by a consortium of three companies – France’s Total, Italy’s Eni and Russia’s Novatek – for two offshore blocks”, while there is talk of Lebanon reviewing bills that establish a sovereign wealth fund and a national oil company (Marcel and Obeid, 2018). However, there is high risk in the exploration proving to be a failure and the promises of a petroleum sector revenue bringing “economic independence” to the country turning out to be a bluff (Marcel and Obeid, 2018).
Citations
Marcel, Valerie, and Obeid, Jessica, “Is Lebanon Set for an Oil Bonanza”, 10 January, 2018 accessed https://www.chathamhouse.org/expert/comment/lebanon-set-oil-bonanza
Raphaeli, “Lebanese Economy Between Violence and Political Stalemate”, Chapter in Lebanon: Liberation, Conflict, and Crisis, edited by Rubin, Barry, Palgrave Macmillan: New York, 2009