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The Lebanese economy is resilient and the government is determined to pursue its reform program, Finance Minister Jihad Azour said in a lecture at Johns Hopkins University in the United States on Monday.
Azour said that despite the nation's political instability following the assassination of former Prime Minister Rafik Hariri in February 2005, the current government had scored some economic successes between its formation in July 2005 and the breakout of war a year later.
Azour delivered his speech at Johns Hopkins' School of Advanced International Studies (SAIS), a key center of neoconservative thought. He argued that on the eve of the war, growth was projected "at 6 percent with an expected record of 1.6 million tourists and the Central Bank's foreign exchange reserves standing at $11.02 billion."
Azour and Economy and Trade Minister Sami Haddad were in Washington to attend the semi-annual meetings of the World Bank and the International Monetary Fund (IMF) that were held over the weekend.
Azour also said that a surge in the world's oil prices has cost Lebanon 4 percent of its GDP. The government, however, planned to benefit from the regional oil boom by luring investments and providing services.
Azour argued that upon the formation of Prime Minister Fouad Siniora's Cabinet, "all economic indicators began shifting positively despite the political situation. We increased [state] revenue by 10 percent and decreased non-debt expenditures by 3 percent."
But the 2006 war with Israel exacted a heavy toll on Lebanon and its economy.
In Azour's words, the war was "a major, stressful humanitarian problem," and therefore "Lebanon had to endure a severe setback" because of the war "as growth went from 6 percent to negative" combined with loss of human capital in the form of brain drain.
He added that by June, most of the destroyed bridges across the country should be reconstructed. Azour said he realized some politicians were criticizing what they describe as the government's slow post-war recovery, but "facts on the ground say otherwise."
On the reform agenda, Azour said that the government's plan had two pillars. The first was the enhancement of growth. The second was the widening of the social safety nets.
"The reform program will be implemented over five years," Azour, said arguing that the point of such a plan was to survive this government and go beyond it in a way that no matter who rules the nation next, the plan would still be carried on.
The minister also said that Lebanon was in the process of building a legal case against Israel over the war. When asked whether Lebanon sought "money or an apology" from the Israelis, Azour said: "Both."
Azour also said that the domestic political situation had negative consequences on the national economy.
"What's taking place in the streets of Beirut," he said in reference to the opposition's camp Downtown, "has had a severe economic impact ... during the first two months of 2007, we saw negative growth."
However, the minister said that March "was better and we saw some recovery." He did not elaborate on the country's growth rate.
The Daily Star