Democracy and Governance in Lebanon
The Development Challenge: Significant events took place in Lebanon last year that were considered to be major turning points for change in the political life of the country. The Municipal elections of May 2004 resulted in the formation of around 180 new Municipalities reflecting a stronger trend towards decentralization. The controversial extension of the President's term for an additional three years, and the formation of an unpopular government brought Lebanon's internal politics to the forefront of the international arena. The United Nations Security Council adopted resolution 1559, that advocates the full sovereignty of Lebanon and calls for the withdrawal of all foreign troops from Lebanese territory, and the disarmament and disbanding of all foreign and non-foreign militias operating in the country. Internally, as a reflection of discontent, a coalition of diversified factions and parties joined forces and formed the largest opposition block the country has witnessed since before the 1975-1990 civil war. These developments clearly show a strong domestic desire for change while maintaining the multifaceted image of Lebanon in the region. However, despite these encouraging developments, the divisiveness that is inherent in Lebanon's confessional system of government continues to contribute to neighboring Syria's ability to interfere in the political affairs of the country. As a result, Lebanon has kept its Syrian and Iranian-supported "resistance" alive, using the argument that the Israeli-occupied Shebaa Farms area is legally Lebanese, not Syrian territory.
The economic situation in Lebanon continues to worsen. Lebanon's accumulating public debt has reached $35 billion, which is equivalent to approximately 180% of gross domestic product (GDP), one of the highest ratios in the world. This is leading the government to dedicate around 70% of its public revenues to pay interests on the debt instead of financing public services. This has also resulted in widening disparities between the rich and the poor and an increased rate of unemployment (around 20%). The pace of economic and administrative reform is slow. The investment climate remains hazy, with decreasing investor confidence in the country's economy. Only Arab and Gulf financing account for a considerable portion of direct foreign investment in Lebanon. Slight improvements have been noted, with an increase of 29% in industrial exports and an improvement in the tourism sector. Lebanon surpassed the million tourists mark for the first time in 30 years, an increase of 33% in tourist arrivals and the highest average per tourist expenditures ($1,500) in the Middle East.
At another level, the environment in Lebanon is in a deteriorating state due to years of neglect. This, coupled with a lack of government investments in remedies has resulted in polluted air, soil, rivers, beaches, open dumping, and lack of control on industrial emissions. With USAID's help, attitudes and perspectives of environmental protection and preservation are slowly changing.
As a response to the challenges facing the country, the USAID program is contributing to the USG policy priorities of promoting democratic principles and free economies through investing in the people. It is helping the people of Lebanon by improving their standard of living, protecting their environment and health, building their local institutions, addressing their legal rights as citizens, and addressing their humanitarian needs.
(Excerpted from the 2006 Congressional Budget Justification for Lebanon)
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