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Lebanese Finance Minister Jihad Azour said Aug. 30 that Lebanon faces $15 billion worth of reconstruction following Israel's military campaign against Hezbollah and warned that the Lebanese economy could soon plunge into a recession. Azour added, however, that the country's economic conditions could improve if Israel lifts its blockade.
Even before the war, Lebanon was struggling to pull itself out of a massive debt that stood at $38.6 billion -- 183 percent of the country's gross domestic product. Current Lebanese estimates of the economic impact of the war are as high as $9.5 billion. U.N. estimates put the number even higher, around $15 billion. In an economy where value-added taxes from trade (Beirut's port earned the government $5 million a day before the war) and tourism (mainly from Gulf Arab nations) made up 37 percent of annual Lebanese government income, relieving the debt will not be easy. The Israeli blockade -- intended to cut off arms and supplies to Hezbollah -- and tourists' travel fears have all but eliminated these sources of revenue. This is where the regional jockeying comes in.
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