“No Investment means no Growth”
ONLY PEACE and Stability can win back the confidence
A wise Lebanese politician once said
during the civil war: “Give us security and peace … and take wonders from
us”.
Now in 2006, we are still seeking this
long awaited security and peace to come. With the UN resolution 1701 along with
sincere Lebanese democratic dialogue, we may achieve our strategic goal:
peaceful life and prosperity.
In spite of all the obstacles and
political turmoil, wars, etc… which have been moving side by side with our day
to day activities, for more than three decades – we are still struggling with
nails and teeth to surmount all the evil forces that have been surrounding us
from all sides.
Thanks to our economic system based on
the entrepreneurship and vitality of the Lebanese private sector; the banking
system; the Real Estate; and tourism. Lebanon and once again due to its
multiple sound and resilient infrastructure in addition to the unprecedented
international community and Arab friends up rise to support Lebanon with
generous contributions and donations to finance the reconstruction of the July
war destructions – Lebanon will soon be able to stand on its own feet to replay
the constructive role it has always played thru history.
1
- Lebanese
Banking System:
The bank secrecy is strictly enforced
and there are no restrictions on foreign exchange, capital movement, or foreign
investment.
The consolidated balance sheet of the
banking sector reported total assets equivalent to US$ 73.2 billion at end of
July 2006 – and foreign currency deposits out of total deposits increased from
72.8% to 74.8%.
The deposits dollarization
in the Lebanese banks had a very positive and resilient impact to absorb the
bad effects of July war and a stabilization factor on the national currency.
The International Monetary Fund (IMF)
reviewed the economic and financial impact of 12 July 2006 war. The IMF stated
that while GDF in
The Lebanese banking system is sound
by all world banking standards. It enjoys a high capital adequacy ratio of
about 22 percent – whilst the ratio set by
The Lebanese banking sector,
encouraged by the Central Bank, continues to consolidate over 25 bank mergers
which have taken place in the past decade and additional mergers are still
anticipated.
This portrait of sound banking sector
gives to the local and foreign investor a peace of mind – and encourages others
to increase the inflow of capital… which ultimately would lead to more
construction, development and economic prosperity.
Becoming a hub for funds:
Based on the strength of banking system,
Funds would also be considered to be
the key for the development and diversification of revenues for local banks.
With the Basel II capital regulations
to be applied in
2
- Real Estate
Sector:
The features and particularities of
Though the total Lebanese population
is 3.5 million, the future projection for
The Lebanese population is still asked
to squeeze itself further to give more room in its limited territory of 10452
km2.
That’s why the prices of land are
expected to reach sky high as the time goes by.
For instance, in January 2002, the
normal average land prices in Ain Mreisseh
were not supposed to exceed US$ 3500/m2 – but in reality and after the Sept.
11, 2001 incident in
Nowadays, the prices reached US$
8000/m2 and the trend towards higher prices still progressing – and apartments
are sold for between US$ 4000/m2 and US$ 5400/m2, their high price being the
reflection of the expensive land in the area – and the least deluxe flats are
sold for US$ 3000/m2.
What
steps to be taken in order to win back the investor confidence?
The Real Estate market hinges on an
improved political and a relaxed peaceful atmosphere. While buyers are seeking
to snatch up, properties at bargain prices, landlords in general are still
sticking to their pre-war prices despite the gloomy and uncertainty image of
the political situation – hoping that by mid 2007 another miracle will bring
back peace and tranquility despite the stubborn and irrational behavior of our
politicians.
What are the predictions for a
recovery?
The intermingling of conflicting
interests of the Big Powers and some of the regional countries, in addition to
the Israeli-Palestinian dispute and their direct heavy impact on the various
factions of the Lebanese society - are dragging the country into unstable,
helpless and out of balance situation.
On the light of the above description
of the political convergent attitudes, no one is expecting miracles but at
least an understanding or a phase of gradual release of tension so that the
normal life will be again resumed.
Since the chain of assassinations of
late H.E Harriri in Feb. 2005 and lately with H.E
Pierre Gemayel in Nov. 2006; and now with an open
strike of the oppositions; the political unrest is building up on the Lebanese
arena and hindering the exceptional and promising progress which was much
underway prior to the war outbreak; but now is hesitant and nervous following
the “wait and see” attitude.
Despite the current moods, nowadays
either “optimistic or pessimistic” which are almost equally shared among the
investors and Lebanese population -all have the full and strong confidence that
Lebanon will survive again as it has always done thru its old and modern
history.
Within days from the cessation of the
12 July 2006 Israeli war and hostilities – most Arab and Lebanese investors
reaffirmed their interest in properties they were in the process of purchasing
before the outbreak of war and the selling prices remained at pre-war levels.
The encouraging factors which are
contributing to the revival of the economy in general and the real estate
market in particular are:
The
strong demand on real estate and unshaken confidence of the Lebanese and Gulf
Arab investors in this country.
Sound
banking system.
The
increasing wealth of Lebanese expatriates.
The
high rise in oil prices, which is translated in the inflow of money and
investment.
The
unprecedented care and attention of the International community to protect the
tiny
Realistically, we should allow about six months more
or less from date or
by
summer 2007 for a noticeable recovery of the market – hoping by that time the
political and security issues will be gradually cleared and stabilized – unless
an unpredicted political detoriation might prolong
the peaceful settlement a bit further.
We repeat that the attractive features
and particularities of Lebanon; and
natural Lebanese warm, hospitality and way of life make of Lebanon a pleasant
and attractive destination and a future second home to most Arab Gulf
investors, other nationalities and Lebanese immigrants.
All are welcome to invest and live in
