Lebanon Country Brief - January 2008
Introduction
Australia enjoys close bilateral relations with Lebanon, underpinned by strong people-to-people links. The Australian Embassy in Beirut, opened in 1967, was the third Australian Embassy to be opened in the Middle East. Australia is committed to Lebanon’s sovereignty, independence and national unity.
Political Overview
The Republic of Lebanon is a parliamentary democracy, with carefully structured representation of its various religious sects. There are eighteen sects and although no official census has been taken since 1932, it is widely accepted that a clear majority of Lebanon's population is now Muslim. Most of the Muslim population are Sunni or Shia but there are also significant numbers of Druze and a small Alawite community. The Maronites are the largest of the Christian sects.
The sectarian nature of Lebanese society is reflected in all aspects of Lebanese political life. Lebanon’s complex political system seeks to maintain its fragile balance through the allocation of parliamentary seats, ministerial posts and key offices of state between its various religious communities. The National Assembly is made up of 128 deputies with equal representation for Muslims and Christians. National Assembly deputies are elected by popular vote to serve four year terms. The President is elected by the National Assembly for a six year term. The Prime Minister and Deputy Prime Minister are appointed by the President in consultation with the National Assembly. By custom, the President is a Maronite Christian, the Prime Minister a Sunni Muslim and the Speaker of the Legislature a Shi'a Muslim.
Lebanon’s political system has been at an impasse since President Lahoud’s mandate expired in November 2007. The broadly Sunni-Christian-Druze coalition government of Prime Minister Fouad Siniora and its Shia and Christian opponents have been unable to reach a consensus on the election of a new president.
Hariri Investigation
Former Prime Minister Rafik Hariri was assassinated in February 2005. His assassination prompted the formation of a United Nations International Independent Investigation Committee (UNIIIC) to investigate the assassination. The Lebanese opposition, supported by President Lahoud, refused to endorse the Cabinet’s decision agreeing to the UN protocol for the establishment of the Special Tribunal to investigate the assassination. On 30 May 2007 the UN Security Council adopted Resolution 1757 to establish the Tribunal and the UN Secretary-General has since begun measures to establish the Tribunal, which will be based in The Hague.
Economic Overview
The Lebanese civil war (1975-1990) caused serious damage to Lebanon’s economic infrastructure. High levels of public debt accumulated over the post-war period continue to represent a challenge for the Lebanese Government. Significant reforms undertaken from 1998 by the Government of the late ex-Prime Minister Rafiq Hariri included reduced tariffs, privatisation of state enterprises and the introduction a consumption tax (VAT). Services (mainly banking and tourism) account for approximately 68 per cent of annual Lebanese GDP despite the country boasting the highest proportion of arable land in the Arab world.
International donors and stakeholders pledged US$7.6 billion in grants and loans for the reconstruction of Lebanon at the Paris Conference in January 2007. The World Bank Group promised a package of $1 billion in financial assistance. The ongoing political stand-off has had a negative effect on the economy.
Bilateral Relationship
The Australian-Lebanese population plays an important role in the bilateral relationship. There are around 300,000 Australians of Lebanese origin. Approximately 20-25,000 Australian passport holders are normally resident in Lebanon and this explains the unparalleled Australian evacuation effort during the Israeli-Hezbollah conflict of 2006.
Australia and Lebanon disagree about the status of the Shiite organisation Hezbollah. Hezbollah is a multi-faceted organisation comprising political and social elements as well as military and terrorist wings. Hezbollah in its entirety was listed by the Australian Government in December 2001 for the purpose of asset freezing. Its External Security Organisation (ESO) was listed in June 2003 as a terrorist organisation. Hezbollah's presence in Lebanese society is not confined to its militia but also usually includes representatives in parliament and many charitable associations. It has participated in Lebanon’s political system since 1992.
Bilateral economic and trade relationship
According to Australian Government figures (which do not count exports trans-shipped to Lebanon through other regional ports), total two-way merchandise trade amounted to A$31 million in 2006-07 (A$18 million in Australian exports, A$13 million in imports from Lebanon. In the Lebanese market, European suppliers enjoy a substantial competitive advantage with lower transport costs and shorter delivery times. Current opportunities for Australian exporters are primarily focused in the education, food and beverage sectors. Australian companies have been deterred from investing in the Lebanese market by the non-transparency of the business environment, high local service costs, infrastructural problems and the uncertainties surrounding the current political environment