FOLLOWING months of political vacuum after the collapse of former prime minister Saad Hariri’s cabinet, Lebanese politicians formed a government in June, much to the market’s relief.
Amid tense uncertainty business contracted by as much as 30 percent since the beginning of the crisis, according to reports, contrary to economic projections announced towards the end of last year that put the country’s GDP growth in 2011 at about six percent.
The four-month power vacuum saw trade unions and civil groups protest against the politicians’ inability to form a government and subsequent decline in foreign investment and consumer confidence.
While the clouds of uncertainty have begun to clear, the formation of a government under prime minister Najib Mikati has raised questions among some observers. Nicholas Chammas, chief of the Beirut Traders Association, who threatened calls for a national strike during the political impasse, said it was not enough for a government to have been formed; it would now have to enact a concerted campaign for economic recovery in order to overcome the damage done to Lebanon’s economy.
See page 19 for more analysis of the Lebanon situation.