Lebanon - Economic development
Since World War II, Lebanon has followed free-enterprise and free-trade policies. The country's favorable geographical position as a transit point and the traditional importance of the trading and banking sectors of the economy helped make Lebanon prosperous by the early 1970s. Lebanon became a center of trade, finance, and tourism by means of a stable currency backed largely with gold, by a conservative fiscal policy, by various incentives for foreign investors, and by minimization of banking regulations.
Lebanon's development went awry in the mid-1970s, as factional conflict, always present in Lebanese society, erupted into open warfare. The loss to the economy was enormous, particularly in Beirut. The reconstruction plan submitted in 1979 by the Council for Development and Reconstruction (CDR) envisaged total expenditures of LL 22 billion for rebuilding, including LL 10 billion in the public sector and LL 12 billion in the private sector. The cost of new housing and repair of damaged homes was estimated at LL 4.5 billion, and of major road construction at LL 1.5 billion. Redevelopment of the port of Beirut and reconstruction of Beirut airport were begun under the program.
In November 1979, Sa'udi Arabia and six other oil-producing Arab countries promised to contribute $2 billion for Lebanon's reconstruction effort over a five-year period, but only $381 million had been provided by October 1987. (After Israel invaded Lebanon in June 1982, the Arab countries decided to withhold future funds until Israeli forces had withdrawn completely.)
Under the leadership of prime minister Rafiq al–Hariri, Lebanon embarked on the Horizon 2000 program in 1993. Areas of major activity targeted by the plan were the rehabilitation of telecommunications, electricity grids, highways, sewage, waste management, water networks, renovation of the Beirut International Airport, harbor, education, and housing. The plan also called for investment in commercial facilities that will reestablish Beirut as an international business center in competition with Hong Kong and Singapore. The government established a private company, Solidere, to carry out the reconstruction and development of downtown Beirut. No investor can hold more than a 10% share in the company. The parliament also established a public company, Elyssar, for developing southwest Beirut. Under the government's five-year program (2001–2005) the "three pillars" of reform were affirmed by the Hariri government to be 1) economic revival and sustained growth with the private sector as the engine of growth; 2) fiscal consolidation and administrative reform; and 3) monetary, financial and price stability.