Country name:
conventional long form: Lebanese Republic conventional short form: Lebanon

Government type:
Republic

Capital:
Beirut

Independence:
22 November 1943 (from League of Nations mandate under French administration)

Executive branch:
- chief of state: President Emile LAHUD (since 24 November 1998) - head of government: Prime Minister Salim al-HUSS (since 4 December 1998)
- cabinet:
Cabinet chosen by the prime minister in consultation with the president and members of the National Assembly; the current Cabinet was formed in 1998

Elections:
- President elected by the National Assembly for a six-year term.
- Election last held 15 October 1998
- Prime minister and deputy prime minister appointed by the president in consultation
with the National Assembly;
- By custom, the president is a Maronite Christian, the prime minister is a Sunni Muslim,
and the speaker of the legislature is a Shi'a Muslim .

Election results :
Emile LAHOUD elected president; National Assembly vote : 118 votes in favor, 0 against, 10 abstentions

Flag description :
Three horizontal bands of red (top), white (double width), and red with a green and brown cedar tree centered in the white band

ECONOMIC OVERVIEW

The 1975-91 civil war seriously damaged Lebanon's economic infrastructure, cut national output by half, and all but ended Lebanon's position as a Middle Eastern entrepot and banking hub.

Peace has enabled the central government to restore control in Beirut, begin collecting taxes, and regain access to key port and government facilities. Economic recovery has been helped by a financially sound banking system and resilient small- and medium-scale manufacturers, with family remittances, banking services, manufactured and farm exports, and international aid as the main sources of foreign exchange.

Lebanon's economy has made impressive gains since the launch of "Horizon 2000," the government's $20 billion reconstruction program in 1993. Real GDP grew 8% in 1994 and 7% in 1995 before Israel's Operation Grapes of Wrath in April 1996 stunted economic activity. During 1992-98, annual inflation fell from more than 100% to 5%, and foreign exchange reserves jumped to more than $6 billion from $1.4 billion.

Burgeoning capital inflows have generated foreign payments surpluses, and the Lebanese pound has remained relatively stable. Progress also has been made in rebuilding Lebanon's war-torn physical and financial infrastructure. Solidere, a $2-billion firm, is managing the reconstruction of Beirut's central business district; the stock market reopened in January 1996; and international banks and insurance companies are returning.

The government nonetheless faces serious challenges in the economic arena. It has had to fund reconstruction by tapping foreign exchange reserves and boosting borrowing. Reducing the government budget deficit is a major goal of the LAHOUD government. The stalled peace process and ongoing violence in southern Lebanon could lead to wider hostilities that would disrupt vital capital inflows. Furthermore, the gap between rich and poor has widened in the 1990's, resulting in grassroots dissatisfaction over the skewed distribution of the reconstruction's benefits and leading the government to shift its focus from rebuilding infrastructure to improving living conditions.