Wayzata World Factbook 1995/World Factbook - 1995 Edition - Wayzata Technology (1995).iso/mac/text/Build/orig BACKGR/BNOT0064.TXT

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National Trade Data Bank
ITEM ID     : ST BNOTES LEBANON
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - LEBANON

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1994
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | LEBANON

BACKGROUND NOTES:  LEBANON
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
U.S. DEPARTMENT OF STATE

JANUARY 1994
Official Name:  Republic of Lebanon

PROFILE

Geography
Area:  10,452 sq.  km.  (4,015 sq.  mi.); about half the size of New Jersey.
Cities:  Capital--Beirut (pop.  1 million).  Other cities--Tripoli (240,000),
Sidon (110,000), Tyre (60,000), Zahleh (55,000).  Terrain:  Narrow coastal
plain backed by the Lebanon Mountains, the fertile Biqa' Valley, and the
Anti-Lebanon Mountains, which extend to the Syrian border.  Land--61% urban,
desert, or waste; 21% agricultural; 8% forested.  Climate:  Typically
Mediterranean, resembling that of southern California.

People
Nationality:  Noun and adjective--Lebanese (sing.  and pl.).  Population
(est.):  3 million.  Annual growth rate (est):  1%.  Ethnic groups:  Arab 93%,
Armenian 6%.  Religions:  Christian (Maronite, Greek Orthodox, Greek Catholic,
Roman Catholic, Protestant, Armenian Apostolic, other), Muslim (Sunni, Shi'a,
other), and Druze.  Languages:  Arabic (official), French, English, Armenian.
Education:  Years compulsory--5.  Attendance-- 93%.  Literacy--75%.  Health:
Infant mortality rate--50/1,000 (1989).  Life expectancy--male, 65 years;
female, 70 years.  Work force (750,000 in 1989):  Industry, commerce,
services--79%.  Agriculture--11%.  Government--10%.

Government
Type:  Parliamentary republic.  Independence:  1943.  Constitution:  May 26,
1926 (amended).  Branches:  Executive--president (chief of state, elected by
simple majority of parliament for 6-year term), council of ministers
(appointed).  Legislative--unicameral parliament (128-member National Assembly
elected for 4-year renewable terms; last parliamentary elections in 1992).
Judicial-- secular and religious courts; combination of Ottoman, civil, and
canon law; no judicial review of legislative acts.  Administrative
subdivisions:  5 provinces, each headed by a governor:  Beirut, North Lebanon,
South Lebanon, Mount Lebanon, and Biqa'.  Political parties:  Organized along
sectarian lines around individuals whose followers are motivated by religious,
clan, and ethnic considerations.  Suffrage:  Males at 21; females with
elementary education, at 21.  Flag:  Two horizontal red bands with white
center band, on which a green and brown cedar tree is centered.

Economy
Note:  Due to drastic fluctuation in exchange rates over 1992, and flaws in
the central government's economic database, figures throughout this report are
not authoritative, but are estimates based on recent economic performance.
GDP (1992):  $4 billion.  Annual growth rate:  (1992) 10%.  GDP per capita:
$1,500.  Natural resources:  Limestone.  Agriculture (7.2% of GDP):
Products--citrus fruit, vegetables, olives, sugar beets, tobacco.  Industry
(21% of GDP):  Types--cement production, ready-made clothing, electrical
equipment, light industry, refining.  Trade (23% of GDP):  Exports--$500
million [f.o.b.--1992].  Major markets--Saudi Arabia, Switzerland, U.A.E.,
France, Jordan.  Imports-- $4.8 billion [c.i.f.--1992].  Major suppliers--
Italy, Syria, France, Germany, U.S.  Official exchange rate:  [1992 average]
1,683 Lebanese pounds=US$1; [Dec.  1993] 1,711 Lebanese pounds=US$1.


PEOPLE
The population of Lebanon comprises Christians and Muslims.  No official
census has been taken since 1932, reflecting the political sensitivity in
Lebanon over confessional (religious) balance.  The U.S.  Government estimate
is that more than half of the resident population is Muslim (Shi'a, Sunni and
Druze), and the rest is Christian (predominantly Maronite, Greek Orthodox,
Greek Catholic, and Armenian).  Shi'a Muslims make up the single largest sect.
Claims since the early 1970s by Muslims that they are in the majority
contributed to tensions preceding the 1975-76 civil strife and have been the
basis of demands for a more powerful Muslim voice in the government.

There are over 300,000 Palestinian refugees in Lebanon registered with the
United Nations Relief and Works Agency (UNRWA), and about 180,000 stateless
undocumented persons resident in the country (mostly Kurds and Syrians).
Palestinians and stateless persons are not accorded the legal rights enjoyed
by the rest of the population.

With no official figures available, it is estimated that 600,000-900,000
persons fled the country during the initial years of civil strife (1975-76).
Although some returned, continuing instability until 1990 sparked further
waves of emigration, casting even more doubt on population figures.

Many Lebanese still derive their living from agriculture.  The urban
population, concentrated mainly in Beirut and Tripoli, is noted for its
commercial enterprise, but chronic instability until 1990 in much of the
country has had a strong negative impact on both agriculture and commerce.
Lebanon has a higher proportion of skilled labor than any other Arab country.


HISTORY
Lebanon is the historical home of the Phoenicians, Semitic traders whose
maritime culture flourished there for more than 2,000 years (c.  2700-450
B.C.).  In later centuries, Lebanon's mountains were a refuge for Christians,
and Crusaders established several strongholds there.  Following the collapse
of the Ottoman Empire after World War I, the five Ottoman provinces that had
comprised present- day Lebanon were mandated to France by the League of
Nations.  The country gained independence in 1943, and French troops were
withdrawn in 1946.

Lebanon's history from independence can be defined largely in terms of its
presidents, each of whom shaped Lebanon by a personal brand of politics:
Sheikh Bishara al-Khoury (1943- 52), Camille Chamoun (1952-58), Fuad Shihab
(1958-64), Charles Helou (1964-70), Suleiman Franjiyah (1970-76), Elias Sarkis
(1976-1982), and Amine Gemayel (1982-88).  From the end of the term of Amine
Gemayel in September 1988 until the election of Rene Moawad in November 1989,
Lebanon had no president.

The terms of the first two presidents ended in political turmoil.  In 1958,
during the last months of President Chamoun's term, an insurrection broke out,
aggravated by external factors.  In July 1958, in response to an appeal by the
Lebanese Government, U.S.  forces were sent to Lebanon.  They were withdrawn
in October 1958, after the inauguration of President Shihab and a general
improvement in the internal and international aspects of the situation.

President Franjiyah's term saw the outbreak of full-scale civil conflict in
1975.  Prior to 1975, difficulties had arisen over the large number of
Palestinian refugees in Lebanon and the presence of Palestinian fedayeen
(commandos).  Frequent clashes involving Israeli forces and the fedayeen
endangered civilians in south Lebanon and unsettled the country.  Following
minor skirmishes in the late 1960s and early 1970s, serious clashes erupted
between the fedayeen and Lebanese Government forces in May 1973.

Coupled with the Palestinian problem, Muslim and Christian differences grew
more intense, with occasional clashes between private sectarian militias.  The
Muslims were dissatisfied with what they considered an inequitable
distribution of political power and social benefits.  In April 1975, after
shots were fired at a church, a busload of Palestinians was ambushed by gunmen
in the Christian sector of Beirut, an incident widely regarded as the spark
that touched off the civil war.  Palestinian fedayeen forces joined the
predominantly leftist-Muslim side as the fighting persisted, eventually
spreading to most parts of the country.

Elias Sarkis was elected president in 1976.  In October, Arab summits in
Riyadh and Cairo set forth a plan to end the war.  The resulting Arab
Deterrent Force (ADF), composed largely of Syrian troops, moved in at the
Lebanese Government's invitation to separate the combatants, and most fighting
ended soon thereafter.  As an uneasy quiet settled on Beirut and parts of
Lebanon, security conditions in southern Lebanon began to deteriorate.  A
series of clashes occurred in the south in late 1977 and early 1978 between
the Palestine Liberation Organization (PLO) and Lebanese leftists on the one
hand, and the pro- Israeli, southern Lebanese militia (eventually known as the
"Army of South Lebanon," or SLA) on the other.

After a raid on a bus in Northern Israel left large numbers of Israeli and
Palestinian guerrilla casualties, Israel invaded Lebanon in March 1978,
occupying most of the area south of the Litani river.  The UN Security Council
passed Resolution 425 calling for withdrawal of Israeli forces from Lebanon
and creating a UN Interim Force in Lebanon (UNIFIL), charged with maintaining
peace.  When the Israelis withdrew, they turned over positions inside Lebanon
along the border to their Lebanese ally, the SLA, and formed a "security zone"
which exists to this day under the effective control of Israel and the SLA.

In mid-1978, clashes between the ADF and the Christian militias erupted.  Arab
foreign ministers created the Arab Follow-Up Committee, composed of Lebanon,
Syria, Saudi Arabia, and Kuwait, to end fighting between the Syrians and
Christians.  After the Saudi ambassador was wounded in December 1978, the
committee did not meet again formally until June 1981, when it was convened to
address security and national reconciliation.  The committee was unsuccessful
in making progress toward a political settlement and has been inactive since
November 1981.

Israeli-Palestinian fighting in July 1981 was ended by a cease-fire arranged
by U.S.  President Ronald Reagan's special envoy, Philip C.  Habib, and
announced on July 24, 1981.  The cease-fire was respected during the next 10
months, but a string of incidents, including PLO rocket attacks on northern
Israel, led to the June 6, 1982, Israeli ground attack into Lebanon to remove
PLO forces.  Israeli forces moved quickly through south Lebanon, encircling
west Beirut by mid-June and beginning a three- month siege of Palestinian and
Syrian forces in the city.

Throughout this period, which saw heavy Israeli air, naval, and artillery
bombardments of west Beirut, Ambassador Habib worked to arrange a settlement.
In August, he was successful in bringing about an agreement for the evacuation
of Syrian troops and PLO fighters from Beirut.  The agreement also provided
for the deployment of a three-nation Multinational Force (MNF) during the
period of the evacuation, and by late August, U.S.  Marines, as well as French
and Italian units, had arrived in Beirut.  When the evacuation ended, these
units departed.  The U.S.  Marines left on September 10.

In spite of the invasion, the Lebanese political process continued to
function, and Bashir Gemayel was elected President in August, succeeding Elias
Sarkis.  On September 14, however, Bashir Gemayel was assassinated.  On
September 15, Israeli troops entered west Beirut.  During the next three days,
Lebanese militiamen massacred hundreds of Palestinian civilians in the Sabra
and Shatila refugee camps in west Beirut.

Bashir Gemayel's brother, Amine, was elected President by a unanimous vote of
the parliament.  He took office September 23, 1982.  MNF forces returned to
Beirut at the end of September as a symbol of support for the government.

In February 1983, a small British contingent joined the U.S., French, and
Italian MNF troops in Beirut.  President Gemayel and his government placed
primary emphasis on the withdrawal of Israeli, Syrian, and Palestinian forces
from Lebanon, and in late 1982, Lebanese- Israeli negotiations commenced with
U.S.  participation.

On May 17, 1983, an agreement was signed by the representatives of Lebanon,
Israel, and the United States that provided for Israeli withdrawal.  Syria
declined to discuss the withdrawal of its troops, effectively stalemating
further progress.  Opposition to the negotiations and to U.S.  support for the
Gemayel regime led to a series of terrorist attacks in 1983 and 1984 on U.S.
interests, including the bombing on April 18, 1983 of the U.S.  embassy in
west Beirut (63 dead), of the U.S.  and French MNF headquarters in Beirut on
October 23, 1983 (298 dead), and of the U.S.  embassy annex in east Beirut on
September 20, 1984 (8 killed).

Although the general security situation in Beirut remained calm through late
1982 and the first half of 1983, a move by Christian militiamen into the
Druze-controlled Shuf area southeast of Beirut following the Israeli invasion
led to a series of Druze-Christian clashes of escalating intensity beginning
in October 1982.  When Israeli forces unilaterally withdrew from the Shuf at
the beginning of September 1983, a full-scale battle erupted with the Druze,
backed by Syria, pitted against the Christian Lebanese Forces (LF) militia as
well as the Lebanese army.  U.S.  and Saudi efforts led to a cease-fire on
September 26.  This left the Druze in control of most of the Shuf.  Casualties
were estimated to be in the thousands.

The virtual collapse of the Lebanese army in February 1984, following the
defection of many of its Muslim and Druze units to opposition militias, was a
major blow to the government.  As it became clear that the departure of the
U.S.  Marines was imminent, the Gemayel Government came under increasing
pressure from Syria and its Muslim Lebanese allies to abandon the May 17
accord.  The Lebanese Government announced on March 5, 1984, that it was
canceling its unimplemented agreement with Israel.  The U.S.  Marines left the
same month.

Further national reconciliation talks at Lausanne under Syrian auspices
failed.  A new "government of national unity" under Prime Minister Rashid
Karami was declared in April 1984 but made no significant progress toward
solving Lebanon's internal political crises or its growing economic
difficulties.

The situation was exacerbated by the deterioration of internal security.  The
opening rounds of the savage "camps war" in May 1985--a war that flared up
twice in 1986-- pitted the Palestinians living in refugee camps in Beirut,
Tyre, and Sidon against the Shi'ite Amal militia, which was concerned with
resurgent Palestinian military strength in Lebanon.  Eager for a solution in
late 1985, Syria began to negotiate a "tripartite accord" on political reform
among the leaders of various Lebanese factions, including the LF.

However, when the accord was opposed by Gemayel and the leader of the LF was
overthrown by his hardline anti-Syrian rival, Samir Jaja, in January 1986,
Syria responded by inducing the Muslim government ministers to cease dealing
with Gemayel in any capacity, effectively paralyzing the government.  In 1987,
the Lebanese economy worsened, and the pound began a precipitous slide.  On
June 1, Prime Minister Karami was assassinated, further compounding the
political paralysis.  Salim al-Huss was appointed acting prime minister.

As the end of President Gemayel's term of office neared, the different
Lebanese factions could not agree on a successor.  Consequently, when his term
expired on September 23, 1988, he appointed Army Commander General Michel Aoun
as interim Prime Minister.  Gemayel's acting Prime Minister, Salim al-Huss,
also continued to act as de facto Prime Minister.  Lebanon was thus divided
between an essentially Muslim government in west Beirut and an essentially
Christian government in east Beirut.  The working levels of many ministries,
however, remained intact and were not immediately affected by the split at the
ministerial level.

In February 1989, General Aoun attempted to close illegal ports run by the LF.
This led to several days of intense fighting in east Beirut and an uneasy
truce between Aoun's army units and the LF.  In March, an attempt by Aoun to
close illegal militia ports in predominantly Muslim parts of the country led
to a 6-month period of shelling of east Beirut by Muslim and Syrian forces and
shelling of west Beirut and the Shuf by the Christian units of the army and
the LF.  This shelling caused nearly 1,000 deaths, several thousand injuries,
and further destruction to Lebanon's economic infrastructure.

In January 1989, the Arab League appointed a six-member committee on Lebanon,
led by the Kuwaiti foreign minister.  At the Casablanca Arab summit in May,
the Arab League empowered a higher committee on Lebanon--composed of Saudi
King Fahd, Algerian President Bendjedid, and Moroccan King Hassan--to work
toward a solution in Lebanon.  The committee issued a report in July 1989,
stating that its efforts had reached a "dead end" and blamed Syrian
intransigence for the blockage.  After further discussions, the committee
arranged for a seven-point cease- fire in September, followed by a meeting of
Lebanese parliamentarians in Taif, Saudi Arabia.

After a month of intense discussions, the deputies informally agreed on a
charter of national reconciliation, also known as the Taif agreement.  The
deputies returned to Lebanon in November, where they approved the Taif
agreement on November 4, and elected Rene Moawad, a Maronite Christian deputy
from Zghorta in north Lebanon, President on November 5.  General Aoun,
claiming powers as interim Prime Minister, issued a decree in early November
dissolving the parliament and did not accept the ratification of the Taif
agreement or the election of President Moawad.

President Moawad was assassinated on November 22, 1989, by a bomb that
exploded as his motorcade was returning from Lebanese independence day
ceremonies.  The parliament met on November 24 in the Biqa' Valley and elected
Elias Hraoui, a Maronite Christian deputy from Zahleh in the Biqa' Valley, to
replace him.  President Hraoui named a Prime Minister, Salim al-Huss, and a
cabinet on November 25.  Despite widespread international recognition of
Hraoui and his government, General Aoun refused to recognize Hraoui's
legitimacy, and Hraoui officially replaced Aoun as army commander in early
December.

In late January 1990, General Aoun's forces attacked positions of the LF in
east Beirut in an apparent attempt to remove the LF as a political force in
the Christian enclave.  In the heavy fighting that ensued in east Beirut and
its environs, over 900 people died and over 3,000 were wounded.

In August 1990, the National Assembly approved, and President Hraoui signed
into law, constitutional amendments embodying the political reform aspects of
the Taif agreement.  These amendments gave some presidential powers to the
council of ministers, expanded the National Assembly from 99 to 108 seats, and
divided those seats equally between Christians and Muslims (see GOVERNMENT
section below).

In October 1990, a joint Lebanese-Syrian military operation against General
Aoun forced him to capitulate and take refuge in the French embassy.  On
December 24, 1990, Omar Karami was appointed Lebanon's Prime Minister.
General Aoun remained in the French embassy until August 27, 1991 when a
"special pardon" was issued, allowing him to leave Lebanon safely and take up
residence in exile in France.  1991 and 1992 saw considerable advancement in
efforts to reassert state control over Lebanese territory.  Militias--with the
important exception of Hizballah--were dissolved in May 1991, and the armed
forces moved against armed Palestinian elements in Sidon in July 1991.  In May
1992 the last of the western hostages taken during the mid-1980s by Islamic
extremists was released.

In October 1991, under the sponsorship of the United States and the
then-Soviet Union, the Middle East peace talks were convened in Madrid, Spain.
This was the first time that Israel and its Arab neighbors had direct
bilateral negotiations to seek a just, lasting, and comprehensive peace in the
Middle East.  Lebanon, Jordan, Syria, and representatives of the Palestinians
concluded round 11 of the negotiations in September 1993.

A social and political crisis, fueled by economic instability and the collapse
of the Lebanese pound, led to Prime Minister Omar Karami's resignation May 6,
1992.  He was replaced by former Prime Minister Rashid al Sulh, who was widely
viewed as a caretaker to oversee Lebanon's first parliamentary elections in 20
years.  The elections were not prepared and carried out in a manner to ensure
the broadest national consensus.

The turnout of eligible voters in some Christian locales was extremely low,
with many voters not participating in the elections because they objected to
voting in the presence of non-Lebanese forces.  There also were widespread
reports of irregularities.  The electoral rolls were themselves in many
instances unreliable because of the destruction of records and the use of
forged identification papers.  As a consequence, the results do not reflect
the full spectrum of Lebanese politics.

Elements of the 1992 electoral law, which paved the way for elections,
represented a departure from stipulations of the Taif agreement, expanding the
number of parliamentary seats from 108 to 128 and employing a temporary
districting arrangement designed to favor certain sects and political
interests.  According to the Taif agreement, the Syrian and Lebanese
Governments were to agree in September 1992 to the redeployment of Syrian
troops from greater Beirut.  That date passed without an agreement.  In early
November 1992, Prime Minister Rafiq al-Hariri formed a new cabinet, retaining
for himself the finance portfolio.  The formation of the Hariri Government was
widely seen as a sign that the Government of Lebanon would seriously grapple
with reconstructing the Lebanese state and reviving the economy.


GOVERNMENT
Lebanon is a parliamentary democracy in which the people constitutionally have
the right to change their government.  However, until the parliamentary
elections in 1992, the people had not been able to exercise this right during
16 years of civil war.  According to the constitution, direct elections must
be held for the parliament every 4 years.  Parliament, in turn, elects a
president every 6 years.  The last presidential election was in 1989.  The
president and parliament choose the cabinet.  Political parties may be formed
and some in fact flourish.

Since the emergence of the post-1943 state, national policy has been
determined largely by a relatively restricted group of traditional regional
and sectarian leaders.  The 1943 national pact allocated political power on an
essentially confessional system, based on the 1932 census.  Until 1990, seats
in parliament were divided on a 6-to-5 ratio of Christians to Muslims.
Positions in the government bureaucracy were allocated on a similar basis.

Efforts to alter or abolish the confessional system of allocating power have
been at the center of Lebanese politics for more than 30 years.  A series of
amendments has substantially altered the constitution of 1926.  Among the more
significant is Article 95, which provides that the confessional communities of
Lebanon shall be equitably represented in public employment and in the
composition of the cabinet but that such a measure is not to impair the
general welfare of the state.  This article supplements the National Covenant
of 1943, an unwritten agreement that established the political foundations of
modern Lebanon.  The covenant provides that public offices shall be
distributed among the recognized religious groups and that the three top
positions in the governmental systems shall be distributed as follows:

-- The president is to be a Maronite Christian;
-- The prime minister, a Sunni Muslim, and
-- The president of the National Assembly, a Shi'a Muslim.

Those religious groups most favored by the 1943 formula sought to preserve it,
while those who perceived themselves to be disadvantaged sought to revise it
on the basis of updated demographic data or to abolish it entirely.  The
struggle gave a strongly sectarian coloration to Lebanese politics and to the
continuing civil strife in the country.

Under the national reconciliation agreement reached in Taif, Saudi Arabia, in
October 1989, members of parliament agreed to alter the national pact to
create a 50-50 Christian- Muslim balance in the parliament and reorder the
powers of the different branches of government.  The Taif agreement, the
political reform aspects of which were signed into law in September 1990,
further modified the constitution to permit greater power-sharing and put in
writing many of the provisions of the national pact.

Constitutional amendments embodying the political reforms stipulated in the
Taif agreement became law in 1990.  They included an expansion of the number
of seats in parliament and the division of seats equally between Muslims and
Christians and the transfer of some powers from the president to the prime
minister and council of ministers.

Constitutionally, the president has a strong and influential position.  The
president appoints the council of ministers and designates one of them to be
prime minister.  The president also has the authority to promulgate laws
passed by the National Assembly, to issue supplementary regulations to ensure
the execution of laws and to negotiate and ratify treaties.

The National Assembly, only sporadically active since 1975, is elected by
adult suffrage based on a system of proportional representation for the
confessional groups of the country.  Most deputies do not represent political
parties as they are known in the West, nor do they form Western-style groups
in the assembly.  Political blocs are usually based on confessional and local
interests or on personal allegiance rather than on political affinities.

The assembly traditionally has played a significant role in financial affairs,
since it has the responsibility for levying taxes and passing the budget.  It
also exercises political control over the cabinet through formal questioning
of ministers on policy issues and by requesting a confidence debate.

Lebanon's judicial system is based on the Napoleonic Code.  Juries are not
used in trials.  The Lebanese court system has three levels--courts of first
instance, courts of appeal, and the court of cassation.  There also is a
system of religious courts having jurisdiction on personal status matters
within their own communities, i.e., rules on such matters as marriage, divorce
and inheritance.

Principal Government Officials President--Elias Hraoui Prime Minister and
Minister of Finance--Rafiq al-Hariri Minister of Foreign Affairs--Fares Bouez
Deputy Prime Minister--Michel Murr Ambassador to the U.S.--Riad Tabbarah
Ambassador to the UN--Khalil Makkoui

Lebanon maintains an embassy in the United States at 2560 28th Street, NW,
Washington, D.C.  20008, tel.  [phone].  There also are three
consulates general in the United States:  1959 East Jefferson, Suite 4A,
Detroit, MI 48207, tel.  [phone]; 7060 Hollywood Blvd., Suite 510,
Los Angeles, CA 90028, tel.  [phone]; and 9 East 76th Street, New
York, N.Y.  l0021, tel.  [phone] and 744-7985.


POLITICAL CONDITIONS
In addition to its indigenous political groupings, Lebanon contains branches
of many other political parties of the Arab world.  These cover the political
spectrum from far left to far right, from totally secular to wholly religious
and often are associated with a particular religion or geographic region.
Palestinian refugees, numbering about 400,000 and predominantly Muslim,
constitute an important and sensitive minority.

Lebanese political parties are generally vehicles for powerful leaders whose
followers are often of the same religious sect.  The interplay for position
and power among these leaders and groups produces a political tapestry of
extraordinary complexity.

In the past, this system worked to produce a viable democracy.  Recent events,
however, have upset the delicate Muslim-Christian balance and resulted in a
tendency for Christians and Muslims to group themselves for safety into
distinct zones.  All factions have called for a reform of the political
system.

Some Christians favor political and administrative decentralization of the
government, with separate Muslim and Christian sectors operating within the
framework of a confederation.  Muslims, for the most part, prefer a unified,
central government with an enhanced share of power for themselves commensurate
with their percentage of the population.  The reforms of the Taif agreement
moved in this latter direction.


ECONOMY
Lebanon's economy is liberal and open, and traditionally heavily oriented
toward services.  Lebanon served historically as a haven for Arab capital and
as a Middle East transit point and enjoyed a vibrant and largely unregulated
private sector.  Lebanon's banking and tourism sectors flourished between the
Gulf oil boom of 1973 and the beginning of Lebanon's civil war in 1975 by
serving regional needs.  Real GDP growth was 6% per year from 1965 to 1975.

Despite the civil war and mounting government budget deficits resulting from
an inability to collect taxes, Lebanon kept its currency stable and inflation
rate manageable until the early 1980s.  Expatriate workers' remittances, the
flow of capital from abroad to support various militias, the PLO's economic
activities, and the narcotics trade all contributed to a positive balance of
payments.

Events in the early 1980s, including the Israeli invasion of 1982, conspired
against the Lebanese economy, resulting in accumulated infrastructure damage,
massive dislocations of the population, growing migration of people and
capital, and the uprooting of the PLO bureaucracy.

Recession in the Gulf led to a sharp reduction in remittances.  Beirut's
prominence as a center for finance, commerce, and tourism faded away.  A
calmer security environment in 1986- 87, combined with a sharp depreciation of
the Lebanese pound and a decline in labor costs resulting from inflation of
600%, produced a modest economic rebound.  Growth was cut short by the general
chaos of 1988-90.

Hostilities in 1989-90 in industrial and prosperous areas of Lebanon had a
dramatic and negative impact on production and exports, triggered massive
outflows of capital and people, and created circumstances resulting in the
"dollarization" of the economy.

The end of hostilities in 1990, the beginning of the process of national
reconciliation, and the removal of internal barriers to the movements of goods
and people produced a short- term economic boom in 1991.  This high level of
activity proved unsustainable, largely because of enormous state deficits,
poor economic management by the government, public sector corruption, the
unavailability of commercial credit, and the collapse of public confidence in
the nation's leadership.

A large, retroactive public sector salary increase in late 1991, financed
through the sale of Treasury bills, precipitated a crisis:  From January 1,
1992, to early October, inflation galloped to about 130%, and currency lost
180% of its value.  The high cost of living became, and has remained, an issue
of acute concern to the Lebanese public.

A surge of optimism swept across Lebanon with the advent of the Hariri
Government in October 1992, amidst expectations that the billionaire
businessman and his team of advisors would reform state finances and
administration, embark on needed emergency infrastructure reconstruction, and
attract foreign aid.  Demand for Lebanese pounds jumped immediately, despite
substantial intervention by the central bank to stabilize the exchange market
(the pound was valued at the end of May 1993 at 1,740 to a dollar, after an
early October 1992 low of 2,400 to a dollar).  There was also evidence of
deflation.

The Ministry of Finance has achieved remarkable advances toward closing the
budget deficit, despite rigidities in debt servicing, the public sector
payroll, and large subsidies to the electricity and telephone companies.  The
deficit in the first quarter of 1993 amounted to $104 million, compared to
$550 million in the first quarter of 1992.

The absence of functioning services is a serious obstacle to growth.  The
Hariri Government has made infrastructure rehabilitation a centerpiece of its
efforts, using the December 1991 emergency rehabilitation plan (ERP) as a
blueprint.  It calls for spending $2.3 billion in the next 2.5 years,
primarily on rejuvenating the electricity, telecommunications, water supply,
waste water, and solid waste management sectors.

The government has already begun pre-qualifying international firms for
projects in those fields.  The government has in hand commitments for over
$900 million in allocated and non- allocated foreign assistance, almost
entirely in the form of loans.

In February 1993, the World Bank signed an agreement to loan $175 million in
support of ERP.  Future aid, necessary for partial financing of an ambitious
$13-billion, 10-year development plan revealed by the government in March
1993, will depend largely on the Hariri team's ability to point to a record of
economic stabilization and well-managed use of current assistance flows for
reconstruction.

Hariri's economic policy is firmly rooted in the principle that infrastructure
spending and budget austerity will stimulate private-sector growth.  The prime
minister's advisers hope to develop more sophisticated capital markets to
attract a portion of Lebanese capital held abroad, which amounts to tens of
billions of dollars, institutionalize exchange rate stability, and help manage
a debt burden which is bound to grow as ambitious rehabilitation plans
proceed.

The formation of a private real estate company to rebuild the downtown
commercial center of Beirut is a centerpiece of the Hariri team's strategy for
hooking economic recovery to the engine of private sector investment.  The
company will expropriate property in the area and compensate owners with
shares in the company.  The company is to obtain capitalization equal to half
of the estimated property value in the development zone, estimated at $4
billion.  Gulf Arab businessmen have already committed about $500 million to
the controversial project.

Lebanon may have experienced a modest balance of trade deficit in the first
quarter of 1993, estimated by a private bank at $1.8 million.  A large trade
deficit was virtually eliminated by capital inflows.  Gold reserves amounted
to $3 billion, and foreign exchange reserves at $1.2 billion.  Foreign debt
may approach $700 million today, and domestic public debt exceeds $2.5
billion.

Another issue bringing increasing attention to Lebanon is its role as a major
drug producing and trafficking country.  In addition to traditional hashish
production, opium is cultivated and processed into heroin in Lebanon, and
Lebanese traffickers have become increasingly involved in the cocaine trade.

The dramatic expansion of drug activities in Lebanon can be traced primarily
to the breakdown of central government authority.  Because of the potential
for huge profits from the drug trade, many militias in Lebanon, including
known terrorist elements, are thought to be engaged in one or more aspects of
the drug trade to finance their operations.

Since 1976, Syrian troops have occupied Lebanon's prime drug-producing area,
the Biqa' Valley.  They constitute the only formal security authority in this
area.


FOREIGN RELATIONS
Lebanon's foreign policy reflects its geographic location, the composition of
its population, and its reliance on commerce and trade.  Lebanon hopes to
reestablish good ties with Western countries and in the Middle East.  Lebanon
remains friendly with Western countries and follows a generally cautious
course in its relations with countries of the former Soviet bloc.

Lebanon's foreign policy is also heavily influenced by Syria, which maintains
forces throughout parts of Lebanon.  Lebanon did not participate in the 1967
or 1973 Arab-Israeli war or in the 1991 Gulf War.  Lebanon and Israel are now
conducting bilateral negotiations in the Arab-Israeli peace process.


U.S.-LEBANESE RELATIONS
The United States seeks to maintain its traditionally close ties with Lebanon,
to help preserve its independence, sovereignty, national unity, and
territorial integrity.  The United States also supports the withdrawal of all
non-Lebanese forces from Lebanon and the disarming and disbanding of all armed
militias.  The United States believes that a peaceful, prosperous, and stable
Lebanon can make an important contribution to stability and peace in the
Middle East.

The United States supports the programs of the central government to restore
security and unity to Lebanon and to rebuild that country's national
institutions.  One measure of U.S.  concern and involvement has been a program
of relief and rehabilitation assistance which, since 1975, has totaled more
than $250 million.

This support reflects not only humanitarian concerns and historical ties but
the importance the United States attaches to the restoration of a sovereign,
independent, unified Lebanon.  Current funding is used to support the
activities of U.S.  and Lebanese private voluntary organizations engaged in
humanitarian relief programs.

Over the years, the United States also has helped finance construction of the
American University Hospital in Beirut and has assisted the American
University of Beirut (AUB) by financing part of its operating budget and by
providing scholarships to many of its students.  When the AUB administration
building was bombed in November 1991, the U.S.  allocated an additional $3
million to help defray the costs of rebuilding this symbolic center of the
university.

In September 1989, all American officials at the U.S.  embassy in Beirut were
withdrawn, when safety and operation of the mission could not be guaranteed.
A new U.S.  ambassador returned to Beirut in November 1990, and the embassy
has been continuously open since March 1991.  However, due to the size of the
staff and security concerns, normal consular and commercial services and other
embassy functions are not available in Beirut.

Principal U.S. Embassy Officials
Ambassador--Mark G. Hambley
Deputy Chief of Mission--Vincent Battle
Political Officer--David Hale
Consular/Commercial Officer--Patrick Syring
Consul--Vacant
Administrative Officer--Louis Lemieux

The U.S. embassy operates in Awkar, Lebanon (tel. 402-200, 403-300).


Travel Advisory
On January 26, 1987, pursuant to the authority of 22 U.S.C.  211A and
Executive Order 11295 (31 FR 10603), and in accordance with 22 CFR 51.73 (A)
(3), all U.S.  passports were declared invalid for travel to, in, or through
Lebanon, unless specifically validated for such travel.  This action was
required because the situation in Lebanon was so chaotic that American
citizens could not be considered safe from terrorist acts.

Although there has been some improvement in the security situation, review of
the situation has led to the determination by the Secretary of State that
Lebanon continues to be an area "...where there is imminent danger to the
public health or the physical safety of United States travelers" within the
meaning of 22 U.S.C.  211(A) and 22 C.F .R.  51.73 (A) (3).  Accordingly, all
United States passports shall remain invalid for travel to, in, or through
Lebanon, unless specifically validated for such travel under the authority of
the Secretary of State.

Exceptions to this restriction may be granted to professional journalists and
to others for compelling humanitarian considerations or if travel is
determined to be in the national interest.  Exceptions will be scrutinized
carefully on a case-by-case basis in light of the level of threat to the
prospective traveler's safety.  Requests for exceptions should be forwarded in
writing to the following address:

Deputy Assistant Secretary for Passport Services
U.S. Department of State
Washington, DC  20520
Attn.:  Office of Citizenship Appeals and Legal
Assistance, Room 300.

The request for an exception must be accompanied by substantiating
documentation according to the category under which an exception is sought.
Additional information may be obtained by calling the Office of Citizenship
Appeals and Legal Assistance (tel.  [phone] ).


Published by the United States Department of State -- Bureau of Public Affairs
-- Office of Public Communication -- Washington, DC January 1994 -- Managing
Editor:  Peter A.  Knecht

Department of State Publication 7956 -- Background Notes Series.  Contents of
this publication are not copyrighted unless indicated.  If not copyrighted,
the material may be reproduced without consent; citation of the publication as
the source is appreciated.  Permission to reproduce any copyrighted material
(including photos and graphics) must be obtained from the original source.

For sale by the Superintendent of Documents, U.S.  Government Printing Office,
Washington, DC 20420.