Lebanon Mountains

Lebanon Economic Sectors


Lebanon traditionally pursues a liberal economic policy based on free market competition, so that the importance of the state sector is relatively minor, while the private sector, which is dominated by clientele, dominates the economy. However, the country’s economy is being disrupted in its development by bureaucratism and a lack of transparency. Necessary foreign direct investments fail to materialize or are attracted by massive guarantees and risk hedges from the state. Foreign trade was liberalized after the civil war, which explains the falling state revenues from customs revenue. Up until the end of 2000, three quarters of government revenue came from customs revenue. To compensate, a value added tax of ten percent was introduced in 2002. A large-scale privatization campaign by state-owned companies began. Furthermore, there is full currency convertibility in Lebanon. Weak domestic industry and strong demand for imported consumer goods are causing a trade deficit. The effects of the civil war in Syria and the admission of war refugees from the neighboring country are other factors besides the internal Lebanese conflicts that have a lasting effect on economic development in the country.

According to hyperrestaurant, Lebanon is a member of international organizations with an economic focus:

  • World bank
  • IMF
  • Greater Arab Free Trade Area
  • United Nations Conference on Trade and Development (UNCTAD)
  • Union for the Mediterranean (Euromed)
  • World Trade Organization (WTO) (observer status since 1999, application for membership made in 2003)

In addition, Lebanon signed an EU Association Agreement in 2002 and acceded to the International Convention for the Settlement of Disputes relating to Investment Matters between States and Nationals of Other States.

Lebanon Mountains

Service sector

Tourism is traditionally one of the most important economic sectors in Lebanon, but it suffers massively from the insecurity that the Syrian war created. The banking sector is also an important sector that has continued to develop positively in recent years.


Lebanon has production facilities for food, paper, printed matter, cosmetics, pharmaceuticals, steel and aluminum products, textiles and cement.


The fertile areas on the coastal strip and in the Bekaa plain give this sector economic importance. Lebanon traditionally produces fruits and vegetables for the local and Arab markets and is a major wine producer in the region. Due to the mild Mediterranean climate and diverse fertile soils, agriculture is the third most important economic sector in the country. Currently, however, this sector is being criminally neglected, with a devastating effect. Some farmers have restricted their production or have not tilled the fields in the first place. FAO experts fear that the influx of refugees from Syria, coupled with the reduced production of agricultural products, could lead to a shortage of food – this leads to steadily increasing food imports,

Tourism sector

After the founding of the state, an attractive recreational and cultural tourism branch developed in Lebanon, which brought in the necessary foreign currency for the country. Before the outbreak of civil war, over two million tourists and business people came to Lebanon in peak years. Europeans and Gulf Arabs enjoyed the mild temperatures, the beautiful landscape, but also the country’s well-developed tourism infrastructure. In addition, through the liberal economic policy of Lebanon, the country has taken an important economic position between the Middle East and the western states. The civil war was a turning point that led to the collapse of the tourism industry and travel. In the civil war Many hotels were destroyed or converted into emergency shelters for refugees.

Since the end of the civil war, attempts have been made to continue the pre-war tradition. New hotels have been built in many places, but the tourism infrastructure is very weak compared to international standards. Political instability prevents necessary investments, especially since many highly qualified specialists emigrated to the Gulf States. One consequence of the civil war was the destruction of fauna and flora, which represented a location advantage of Lebanon before the civil war. Illegal buildings and quarries left a less attractive situation for tourism. Today, Lebanon’s tourism industry is also subject to massive competition with other neighboring countries. They have pushed ahead with the development of their respective tourism industries and infrastructures and offer tourism services at lower prices. Lebanon was unable to catch up with the pre-civil war situation. Even in the cultural tourism segment, Lebanon has so far not been able to re-establish itself, especially since important destinations are located in relatively insecure regions of the country.

Despite all the difficulties, the tourism industry has developed into one of the country’s most important sources of income in post-war Lebanon. The number of tourists, especially from the Gulf States, rose steadily in the 1990’s, and many Lebanese abroad are increasingly spending their holidays in Lebanon. From the mid-1990’s until the assassination of Rafik al Hariri, the tourism industry expanded and brought in the foreign currency and jobs necessary for the country’s reconstruction. Negative growth has been recorded since 2005. With the outbreak of the war in Syria, the situation worsened. In 2015, Gulf governments called on their citizens to leave Lebanon. The wealthy tourists from these Gulf States make up 22 percent of the visitors and are responsible for 40 percent of the tourism income. Western governments have also issued travel warnings for Lebanon. As a result, sales in the industry collapsed. The Gulf-Arab boycott has not yet been lifted.