The same tone of careful optimism pervades the Lebanese press today with the regards to the financial crisis. Citigroup reiterated its positive assessment, saying that Lebanon’s economic “insulation” has become an asset under the current crisis. It warned at the same time, that Lebanon is not past the danger mark (Arabic & English links). An al-Nahar writer has even given himself the liberty of dreaming of a return to the “golden age” when Lebanon was the main bank of the region (Arabic link).

A more cautious assessment was delivered by economist Ghassan Dibah in a lecture at the Lebanese Communist Party’s HQ in Witwat (round the corner from the best fawwal in town). While repeating the mantra of the Lebanese banking sector’s relative immunity from the effects of the financial crisis, Dibah outlined three possible dangers:

  • Decrease in Lebanese commodities’ ability to compete in European markets, especially because the Lira is linked to the Dollar, which is rising.
  • Decrease in migrants’ remittances due to the crisis abroad. This might be somehow off-set by cash flow coming from the Gulf in search for a safe investment haven.
  • Increase in unemployment, due to the high rate of exported Lebanese labor or, what he calls, “exported unemployment.”

Dibah also said that while supply and demand is already bringing down real estate values, he thought it unlikely that a real estate crisis will ensue in the near future (since the real estate market is not linked to the elaborate investment schemes that triggered the international crisis).