Lebanon
- Total external debt: $23.3 billion
- Total external debt payments: gives $3.5 billion each year to the rich world in debt payments.
- Population: 3.6 million
- Percentage of adults who can read and write: 88%
- Average life expectancy: 71.5 years
- HIV prevalence: 0.1%
- Total health spending: 2.4% of GDP (2003)
- Total spending on debt service payments: 16.1% of GDP
- Annual GDP: $21.9 billion
DROP THE DEBT FAST
Lebanon is the focus of the Drop the Debt Fast on Tuesday 13 May, which is also Resistance and Liberation Day in Lebanon.
Background
Lebanon is situated in the Middle East, bordering Israel and Syria. Lebanon is a small, mountainous country. It has limited natural resources due to its difficult climate. It has often been on the edge, if not at the heart, of conflict in the Middle East, including renewed and deadly fighting in July 2006, when Israel launched a major military campaign against the Lebanon-based Shia Muslim armed group Hezbollah.
Where has the debt come from?
Lebanon was granted independence from France in 1943. It has a long history of civil unrest, including the 16 year civil war which ravaged the country between 1975 and 1991. These periods of war and unrest have all contributed to Lebanon’s current debt crisis. Much of Lebanon’s debt arose from the civil war, after which the combination of a lack of foreign aid and high reconstruction costs left the country with a $33 billion bill to pay. The devastating economic and fiscal impact of the hostilities since 2006is expected to lead to a significant deterioration in the public debt levels.
The current debt burden is also unlikely to be tackled in the immediate political context. Lebanon has been without a president, since November, paralysing government and parliament. This is placing huge further strains on the already struggling economy.
Debt cancellation status
Lebanon is officially classed as a upper middle-income country by the World Bank. It is therefore not eligible for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative. This does not take into account the size of Lebanon’s external debt in comparison to the value of exports, its domestic debt or what Lebanon needs to spend on tackling poverty.
The New Economics Foundation calculates that Lebanon requires 69% debt cancellation in order for the government to meet the basic needs of its citizens, such as health, education and infrastructure, without taxing those living below an ethical poverty line of $3 a day.
Sources of information:
BBC country profile
Last updated: April 2008
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