In any country, economic growth depends on several factors including political and social factors. Many countries in the world have faced significantly slow economic growth due to political situations. Some of the countries that face such situations include Syria, Somalia, South Africa and even Brazil. Politics in most cases is considered to be a critical factor that contributes to economic growth and sustainability. In this analysis, the paper will be looking at the political economy of Lebanon as discussed in Chapter 17. The analysis will delve into the summary of the situation and how the country can work to solve the problem.
The chapter looks at the history of Lebanon focusing on the evolution of Lebanon since its establishment in 1920 (Lust & Congressional Quarterly, 2014). Lebanon is renowned for its vast agriculture, producing fruits and vegetables. The French established the country as an amalgamation of provinces that form half of the modern-day Lebanon. Economic development in Lebanon has been achieved through efforts to push for successful economic development through agriculture and development of economic hubs in Beirut and Mount Lebanon area.
Currently, Lebanon has a GDP of about $39.5 billion which represents it as a middle-income country and a per capita of $ 10,000 (Lust & Congressional Quarterly, 2014). The service industry contributes to 50% of its economy and the manufacturing industry, and the agriculture industry contributes to 18% combines (Lust & Congressional Quarterly, 2014). It is thus considered to be a country that depends largely on the service industries such as insurance, trade, banking and advertising. The economy Lebanon can thus be considered to be a slowly growing economy which faces challenges to its growth due to political situations in Syria.
Lebanon faces high unemployment rates as a large number of its graduates, and skilled workers remain unemployed (Lust & Congressional Quarterly, 2014). Consequently, the country exports labor to Dubai, Abu Dhabi among other countries in the world. The main reason for the large unemployment rate is the political instability of its neighbors. Companies remain unable to invest in Lebanon due to the political situation with its neighbors that create an economic risk to any investment.
It is important to understand that investments are the main course of economic growth in any country. With foreign-based investments, economies can reduce unemployment and increase the revenues from the tax. Taxes contribute to the main source of revenues that come from the foreign domestic investments. Also, companies contribute to the corporate social responsibility which is an important factor that contributes to positive growth in any economy (Frenken, Van Oort, & Verburg, 2007).
Lebanon will require increased investment in their economy in a bid to grow the economy. The analysis has shown how economic growth requires special input from the government and also its people. Lebanon can experience economic stability only through increased input into the domestic investment and promote youth innovations. Funding of start-ups will help increase employment opportunities for the young people and also contribute to significant economic growth and development. Lebanon will require such efforts to promote economic sustainability in the long run.
In conclusion, the paper has helped create an understanding of the current political economy situation of Lebanon. In the paper, the current economic situation has been explained and also the solutions for future changes proposed. Lebanon's economy will require extra input to grow and reduce the cases of unemployment.
Frenken, K., Van Oort, F., & Verburg, T. (2007). Related variety, unrelated variety and regional economic growth. Regional Studies, 41(5), 685-697.
Lust, E., & Congressional Quarterly (2014). The Middle East. Los Angeles : Sage/CQ Press.
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