For the most current version of this Note, see Background Notes A-Z.
Area: 10,452 sq. km. (4,015 sq. mi.), about the size of Connecticut.
Cities: Capital--Beirut (pop. 1.5 million). Other cities--Tripoli (275,000), Sidon (110,000), Tyre (60,000), Zahleh (68,000).
Terrain: Narrow coastal plain backed by the Lebanon Mountains, the fertile Bekaa 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.
Nationality: Noun and adjective--Lebanese (sing. and pl.).
Population (2005 est.): 3.8 million.
Annual growth rate (2005 est.): 1.3%.
Ethnic groups: Arab 95%, Armenian 4%, other 1%.
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--8. Attendance--99%. Literacy--87.4%.
Health: Infant mortality rate--24.5/1,000 (2005). Life expectancy--male, 70.1 yrs; female 75.2 yrs.
Work force (1.6 million excluding foreign labor, 2001): Industry, commerce, services--70%; agriculture--20%; government--10%.
Type: Parliamentary republic.
Independence: November 22, 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 Chamber of Deputies elected for 4-year and renewable terms; last election May 29-June 19, 2005. Judicial--secular and religious courts; combination of Ottoman, civil, and canon law; limited judicial review of legislative acts.
Administrative subdivisions: Six governorates, each headed by a governor: Beirut, North Lebanon, South Lebanon, Mount Lebanon, Nabatiyah, and Bekaa.
Political parties: Organized along sectarian lines around individuals whose followers are motivated primarily by religious, clan, and ethnic considerations.
Suffrage: 21 years; compulsory for men, authorized for women with elementary education.
GDP (2004): $18.83 billion.
Annual growth rate (2004): 4.0%.
GDP per capita (2004): $5,000.
Natural resources: Limestone, water.
Agriculture (11.7% of GDP): Products--citrus, potatoes, grapes, tomatoes, olives, apples, sugar beets, tobacco, sheep, goats.
Industry (21.0% of GDP): Types--construction material, food processing, textiles and readymade garments, furniture, oil refining, mineral and chemical products, jewelry.
Services (67.3% of GDP): Types--banking, tourism, medical care, education.
Trade (2004): Exports--$1.783 billion (f.o.b.). Major markets--Switzerland, U.A.E., Turkey, Saudi Arabia, France, and U.S. Imports--$8.162 billion (f.o.b.). Major suppliers--Italy, France, Germany, China, U.S., Syria, and U.K.
The population of Lebanon comprises various Christian and Muslim sects as well as Druze. No official census has been taken since 1932, reflecting the political sensitivity in Lebanon over confessional (religious) balance. While there is no consensus over the confessional breakdown of the population for this reason, it is safe to say that the Muslim sects as a whole make up a majority, and that Shi'as, Sunnis, and Maronites are the three largest groups.
396,000 Palestinian refugees have registered in Lebanon with the United Nations Relief and Works Agency (UNRWA) since 1948. They 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 war (1975-76). Although some returned, continuing conflict through 1990 sparked further waves of emigration, casting even more doubt on population figures. As much as 7% of the population was killed during the civil war between 1975 and 1990. Approximately 17,000-20,000 people are still "missing" or unaccounted for from the civil war period.
Many Lebanese still derive their living from agriculture. The urban population, concentrated mainly in Beirut and Mount Lebanon, is noted for its commercial enterprise. A century and a half of migration and return have produced Lebanese commercial networks around the globe--from North and South America to Europe, the Gulf, and Africa. Lebanon has a high proportion of skilled labor compared with many other Arab countries.
Lebanon is the historic 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 League of Nations mandated the five provinces that had comprised present-day Lebanon to France. Modern Lebanon's constitution, drawn up in 1926, specified a balance of political power among the various religious groups. The country gained independence in 1943, and French troops withdrew in 1946.
Lebanon's history from independence has been marked by periods of political turmoil interspersed with prosperity built on Beirut's position as a regional center for finance and trade. In 1958, during the last months of President Camille Chamoun's term, an insurrection broke out, and U.S. forces were briefly dispatched to Lebanon in response to an appeal by the government. During the 1960s, Lebanon enjoyed a period of relative calm and Beirut-focused tourism and banking sector-driven prosperity. Other areas of the country, however, notably the South, North, and Bekaa Valley, remained poor in comparison.
In the early 1970s, difficulties arose over the presence of Palestinian refugees, many of whom arrived after the 1967 Arab-Israeli war and "Black September" 1970 hostilities in Jordan. Among the latter were Yasser Arafat and the Palestinian Liberation Organization (PLO). Coupled with the Palestinian problem, Muslim and Christian differences grew more intense.
Beginning of the Civil War--1975-81
Full-scale civil war broke out in April 1975. After shots were fired at a church, gunmen in Christian East Beirut ambushed a busload of Palestinians. Palestinian forces joined predominantly leftist-Muslim factions as the fighting persisted, eventually spreading to most parts of the country and precipitating the President's call for support from Syrian troops in June 1976. In fall of 1976, Arab summits in Riyadh and Cairo set out a plan to end the war. The resulting Arab Deterrent Force, which included Syrian troops already present, moved in to help separate the combatants. As an uneasy quiet settled over Beirut, security conditions in the south began to deteriorate.
After a PLO attack on a bus in northern Israel and Israeli retaliation that caused heavy casualties, Israel invaded Lebanon in March 1978, occupying most of the area south of the Litani River. In response, the UN Security Council passed Resolution 425 calling for the immediate withdrawal of Israeli forces and creating the UN Interim Force in Lebanon (UNIFIL), charged with maintaining peace. Israeli forces withdrew later in 1978, turning over positions inside Lebanon along the border to their Lebanese ally, the South Lebanon Army (SLA) under the leadership of Maj. Saad Haddad, thus informally setting up a 12-mile wide "security zone" to protect Israeli territory from cross border attack.
An interim cease-fire brokered by the U.S. in 1981 among Syria, the PLO, and Israel was respected for almost a year. Several incidents, including PLO rocket attacks on northern Israel, as well as an assassination attempt on the Israeli Ambassador to the United Kingdom, led to the June 6, 1982 Israeli ground attack into Lebanon to remove PLO forces. Operation "Peace for Galilee" aimed at establishing a deeper security zone and pushing Syrian troops out of Lebanon, with a view toward paving the way for an Israeli-Lebanese peace agreement. With these aims in mind, Israeli forces drove 25 miles into Lebanon, moving into East Beirut with the support of Maronite Christian leaders and militia.
In August 1982, U.S. mediation resulted in the evacuation of Syrian troops and PLO fighters from Beirut. The agreement also provided for the deployment of a multinational force composed of U.S. Marines along with French and Italian units. A new President, Bashir Gemayel, was elected with acknowledged Israeli backing. On September 14, however, he was assassinated. The next day, Israeli troops crossed into West Beirut to secure Muslim militia strongholds and stood aside as Lebanese Christian militias massacred almost 800 Palestinian civilians in the Sabra and Shatila refugee camps. Then-Israeli Minister of Defense Ariel Sharon was held indirectly responsible for the massacre by the Kahane Commission and later resigned. With U.S. backing, Amin Gemayel, chosen by the Lebanese parliament to succeed his brother as President, focused anew on securing the withdrawal of Israeli and Syrian forces. The multinational force returned.
On May 17, 1983, Lebanon, Israel, and the United States signed an agreement on Israeli withdrawal that was conditioned on the departure of Syrian troops. Syria opposed the agreement and declined to discuss the withdrawal of its troops, effectively stalemating further progress. In August 1983, Israel withdrew from the Shuf (southeast of Beirut), thus removing the buffer between the Druze and the Christian militias and triggering another round of brutal fighting. By September, the Druze had gained control over most of the Shuf, and Israeli forces had pulled out from all but the southern security zone, where they remained until May 2000. The virtual collapse of the Lebanese Army in February 1984, following the defection of many Muslim and Druze units to militias, was a major blow to the government. With the U.S. Marines looking ready to withdraw, Syria and Muslim groups stepped up pressure on Gemayal. On March 5, 1984 the Lebanese Government canceled the May 17 agreement; the Marines departed a few weeks later.
This period of chaos witnessed the beginning of terrorist attacks launched against U.S. and Western interests. These included the April 18, 1983 suicide attack at the U.S. Embassy in West Beirut (63 dead), the bombing of the headquarters of U.S. and French forces on October 23, 1983 (298 dead), the assassination of American University of Beirut President Malcolm Kerr on January 18, 1984, and the bombing of the U.S. Embassy annex in East Beirut on September 20, 1984 (9 dead).
It also saw the rise of radicalism among a small number of Lebanese Muslim factions who believed that the successive Israeli and U.S. interventions in Lebanon were serving primarily Christian interests. It was from these factions that Hizballah emerged from a loose coalition of Shi'a groups. Hizballah employed terrorist tactics and was supported by Syria and Iran.
Worsening Conflict and Political Crisis--1985-89
Between 1985 and 1989, factional conflict worsened as various efforts at national reconciliation failed. Heavy fighting took place in the "War of the Camps" in 1985 and 1986 as the Shi'a Muslim Amal militia sought to rout the Palestinians from Lebanese strongholds. The Amal movement had been organized in mid-1975, at the beginning of the civil war, to confront what were seen as Israeli plans to displace the Lebanese population with Palestinians. (Its charismatic founder Imam Musa Sadr disappeared in Libya 3 years later. Its current leader, Nabih Berri, is the Speaker of the Chamber of Deputies.) The combat returned to Beirut in 1987, with Palestinians, leftists, and Druze fighters allied against Amal, eventually drawing further Syrian intervention. Violent confrontation flared up again in Beirut in 1988 between Amal and Hizballah.
Meanwhile, on the political front, Prime Minister Rashid Karami, head of a government of national unity set up after the failed peace efforts of 1984, was assassinated on June 1, 1987. President Gemayel's term of office expired in September 1988. Before stepping down, he appointed another Maronite Christian, Lebanese Armed Forces Commanding General Michel Aoun, as acting Prime Minister, contravening Lebanon's unwritten "National Pact," which required the prime minister to be Sunni Muslim. Muslim groups rejected the move and pledged support to Salim al-Hoss, a Sunni who had succeeded Karami. Lebanon was thus divided between a Christian government in East Beirut and a Muslim government in West Beirut, with no president.
In February 1989 Aoun attacked the rival Lebanese Forces militia. By March he turned his attention to other militias, launching what he termed a "War of Liberation" against the Syrians and their Lebanese militia allies. In the months that followed, Aoun rejected both the agreement that ultimately ended the civil war and the election of another Christian leader as president. A Lebanese-Syrian military operation in October 1990 forced him to take cover in the French Embassy in Beirut and later into a 15-year exile in Paris. After Syrian troop withdrawal, Aoun returned to Lebanon on May 7, 2005 and won a seat in the 2005 parliamentary elections. He is now the leader of the largest opposition bloc in parliament.
End of the Civil War--1989-91
The Ta'if Agreement of 1989 marked the beginning of the end of the war. In January of that year, a committee appointed by the Arab League, chaired by Kuwait and including Saudi Arabia, Algeria, and Morocco, had begun to formulate solutions to the conflict, leading to a meeting of Lebanese parliamentarians in Ta'if, Saudi Arabia, where they agreed to the national reconciliation accord in October. Returning to Lebanon, they ratified the agreement on November 4 and elected Rene Moawad as President the following day. Moawad was assassinated in a car bombing in Beirut on November 22 as his motorcade returned from Lebanese Independence Day ceremonies. Elias Hrawi, who remained in office until 1998, succeeded him.
In August 1990, parliament and the new President agreed on constitutional amendments embodying some of the political reforms envisioned at Ta'if. The Chamber of Deputies expanded to 128 seats and was divided equally between Christians and Muslims (with Druze counted as Muslims). In March 1991, parliament passed an amnesty law that pardoned all political crimes prior to its enactment. The amnesty was not extended to crimes perpetrated against foreign diplomats or certain crimes referred by the cabinet to the Higher Judicial Council. In May 1991, the militias (with the important exception of Hizballah) were dissolved, and the Lebanese Armed Forces began to slowly rebuild itself as Lebanon's only major nonsectarian institution.
In all, it is estimated that more than 100,000 were killed, and another 100,000 left handicapped, during Lebanon's 16-year civil war. Up to one-fifth of the pre-war resident population, or about 900,000 people, were displaced from their homes, of whom perhaps a quarter of a million emigrated permanently. The last of the Western hostages taken during the mid-1980s were released in May 1992.
Postwar Reconstruction--1992 to 2005
Postwar social and political instability, fueled by economic uncertainty and the collapse of the Lebanese currency, led to the resignation of Prime Minister Omar Karami in May 1992, after less than 2 years in office. Former Prime Minister Rashid al Sulh, who was widely viewed as a caretaker to oversee Lebanon's first parliamentary elections in 20 years, replaced him.
By early November 1992, a new parliament had been elected, and Prime Minister Rafiq Hariri had formed a cabinet, retaining for himself the finance portfolio. The formation of a government headed by a successful billionaire businessman was widely seen as a sign that Lebanon would make a priority of rebuilding the country and reviving the economy. Solidere, a private real estate company set up to rebuild downtown Beirut, was a symbol of Hariri's strategy to link economic recovery to private sector investment. After the election of then-commander of the Lebanese Armed Forces Emile Lahoud in 1998, following Hrawi's extended term as President, Salim al-Hoss again served as Prime Minister. Hariri returned to office as Prime Minister in November 2000. Although problems with basic infrastructure and government services persist, and Lebanon is now highly indebted, much of the civil war damage has been repaired throughout the country, and many foreign investors and tourists have returned.
In January 2000 the government took action against Sunni Muslim extremists in the north who had attacked its soldiers, and it continues to act against groups such as Asbat al-Ansar, which has been linked to Usama bin Laden's al-Qaida network, and other extremists. On January 24, 2002, Elie Hobeika, a former Lebanese Forces figure associated with the Sabra and Shatila massacres who later served in three cabinets and the parliament, was assassinated in a car bombing in Beirut. Israel withdrew its troops from south Lebanon in May 2000, in accordance with UN Security Council Resolution 425, which had been adopted in 1978. Armed elements of Hizballah are still present in southern Lebanon.
A September 2004 vote by the Chamber of Deputies to amend the constitution to extend President Lahoud's term in office by 3 years amplified the question of Lebanese sovereignty and the continuing Syrian presence. The vote was clearly taken under Syrian pressure, exercised in part through Syria's military intelligence service, whose chief in Lebanon had acted as a virtual proconsul for many years. The UN Security Council expressed its concern over the situation by passing Resolution 1559, also in September 2004, which called for withdrawal of all remaining foreign forces from Lebanon, disbanding and disarmament of all Lebanese and non-Lebanese militias, the deployment of the Lebanese Armed Forces throughout the country, and a free and fair electoral process in the presidential election.
Former Prime Minister Rafiq Hariri and 19 others were assassinated in Beirut by a car bomb on February 14, 2005. The assassination spurred massive protests in Beirut and international pressure that led to the withdrawal of the remaining Syrian military troops from Lebanon on April 26. In the months that followed Hariri's assassination, journalist Samir Qassir and Lebanese politician George Hawi were both murdered by car bombs, and most recently, Defense Minister Elias Murr narrowly avoided a similar fate when a car bomb exploded near his convoy. The UN International Independent Investigative Commission (UNIIIC) headed by Detlev Mehlis is investigating Hariri's assassination and is expected to report its findings to the Security Council in fall 2005.
Parliamentary elections were held May 29-June 19, 2005 and the anti-Syrian opposition led by Sa'ad Hariri, Rafiq Hariri's son, won a majority of 72 seats (out of 128). Hariri ally and former Finance Minister Fouad Siniora was named Prime Minister and Nabih Berri was reelected as Speaker of Parliament. Parliament approved the first "made-in-Lebanon" cabinet in almost 30 years on July 30. The new cabinet's ministerial statement, a summary of the new government's agenda and priorities, focuses on political and economic reform.
Lebanon is a parliamentary democracy in which the people constitutionally have the right to change their government. However, from the mid-1970s until the parliamentary elections in 1992, civil war precluded the effective exercise of political rights. According to the constitution, direct elections must be held for the parliament every 4 years. Parliament, in turn, is tasked to elect a new president every 6 years. A presidential election scheduled for the autumn of 2004 was pre-empted by a parliamentary vote to extend the sitting President's term in office by 3 years. The president and parliament choose the prime minister. Political parties may be formed. However, the political parties that do exist are weak and mostly based on sectarian interests.
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, an unwritten agreement that established the political foundations of modern Lebanon, 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 (with Druze counted as Muslims). With the Ta'if Agreement, the ratio changed to half and half. Positions in the government bureaucracy are allocated on a similar basis. Indeed, gaining political office is virtually impossible without the firm backing of a particular religious or confessional group. The pact also allocated public offices along religious lines, with the top three positions in the ruling "troika" distributed as follows:
Efforts to alter or abolish the confessional system of allocating power have been at the center of Lebanese politics for decades. Those religious groups most favored by the 1943 formula sought to preserve it, while those who saw themselves at a disadvantage sought either to revise it after updating key demographic data or to abolish it entirely. Nonetheless, many of the provisions of the national pact were codified in the 1989 Ta'if Agreement, perpetuating sectarianism as a key element of Lebanese political life.
Although moderated somewhat under Ta'if, constitutionally, the president has a strong and influential position. The president has the authority to promulgate laws passed by the Chamber of Deputies, to issue supplementary regulations to ensure the execution of laws, and to negotiate and ratify treaties.
The Chamber of Deputies is elected by adult suffrage (majority age is 21) based on a system of proportional representation for the various confessional groups. Political blocs are usually based on confessional and local interests or on personal/family allegiance rather than on political affinities.
The parliament 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 over personal status matters within their own communities, e.g., rules on such matters as marriage, divorce, and inheritance.
Principal Government Officials
Prime Minister--Fouad Siniora
Speaker of Parliament--Nabih Berri
Minister of Foreign Affairs--Fawzi Salloukh
Finance Minister--Jihad Azour
Deputy Prime Minister and Defense Minister--Elias Murr
Ambassador to the U.S.--Farid Abboud
Ambassador to the UN-- vacant
Lebanon maintains an embassy in the United States at 2560 28th Street, NW, Washington, D.C. 20008, tel. (202) 939-6300. There also are three consulates general in the United States: 1959 East Jefferson, Suite 4A, Detroit, MI 48207, tel. (313) 567-0233/0234; 7060 Hollywood Blvd., Suite 510, Los Angeles, CA 90028, tel. (213) 467-1253/1254; and 9 East 76th Street, New York, N.Y. l0021, tel. (212) 744-7905/7906 and 744-7985.
Lebanese political institutions often play a secondary role to highly confessionalized personality-based politics. Powerful families also still play an independent role in mobilizing votes for both local and parliamentary elections. Nonetheless, a lively panoply of domestic political parties, some even predating independence, still exists. The largest are all confessional based. The Phalange, National Bloc, National Liberal Party, Lebanese Forces and Free Patriotic Movement (FPM) are overwhelmingly Christian parties. Amal and Hizballah are the main rivals for the organized Shi'a vote, and the PSP (Progressive Socialist Party) is the leading Druze party. In the recent parliamentary elections, an anti-Syrian opposition coalition emerged, led by Sa'ad Hariri's predominantly Sunni Future Movement and allied with Druze leader Jumblatt, the Qornet Shehwan coalition of center-right Christian politicians, Samir Geagea's mostly Maronite Lebanese Forces, and Elias Attallah's Democratic Left secular movement. In addition to domestic parties, there are branches of pan-Arab secular parties (Ba'ath parties, socialist and communist parties) that were active in the 1960s and throughout the period of civil war.
There are differences both between and among Muslim and Christian parties regarding the role of religion in state affairs. There is a very high degree of political activism among religious leaders across the sectarian spectrum. The interplay for position and power among the religious, political, and party leaders and groups produces a political tapestry of extraordinary complexity.
In the past, the system worked to produce a viable democracy. The civil war resulted in greater segregation across the confessional spectrum. Whether in political parties, places of residence, schools, media outlets, even workplaces, there is a lack of regular interaction across sectarian lines to facilitate the exchange of views and promote understanding.
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 commensurate with their larger share of the population. The trajectory of the Ta'if Agreement points towards a non-confessional system, but there has been no real movement in this direction in the decade and a half since Ta'if.
Palestinian refugees, predominantly Sunni Muslims, whose numbers are estimated at between 200,000-400,000, are not active on the domestic political scene. Nonetheless, they constitute an important minority whose naturalization/settlement in Lebanon is vigorously opposed by most Lebanese, who see them as a threat to Lebanon's delicate confessional balance. During 2002, parliament enacted legislation banning Palestinians from owning property in Lebanon. The Labor Ministry opened up professions previously closed to Palestinians in June 2005.
Lebanon has a free-market economy and a strong laissez-faire commercial tradition. The Lebanese economy is service-oriented; main growth sectors include banking and tourism. According to the Lebanese Ministry of Economy and Trade, Lebanon posted 5% real growth in 2004, with inflation running at 3%. There are no restrictions on foreign exchange or capital movement, and bank secrecy is strictly enforced. Lebanon has adopted a law to combat money laundering. There are practically no restrictions on foreign investment; however, the investment climate suffers from red tape, corruption, arbitrary licensing decisions, high taxes, tariffs, and fees, archaic legislation, and a lack of adequate protection of intellectual property. There are no country-specific U.S. trade sanctions against Lebanon.
Lebanon embarked on a massive reconstruction program in 1992 to rebuild the country's physical and social infrastructure devastated by both the long civil war (1975-90) and the Israeli occupation of the south (1978-2000). In addition, the delicate social balance and the near-dissolution of central government institutions during the civil war handicapped the state as it sought to capture revenues to fund the recovery effort. Monetary stabilization coupled with high interest rate policies aggravated the debt service burden, leading to a substantial rise in budget deficits. Thus, the government accumulated significant debt, which by 2005 had reached $36 billion, or 185% of GDP. Unemployment is estimated at 18% officially, but in the absence of reliable statistics, some estimate it could be as high as 20-25%.
The government also has maintained a firm commitment to the Lebanese pound, which has been pegged to the dollar since September 1999. The government passed an Investment Development Law as well as laws for the privatization of the telecom and the electricity sector, signed the Euro-Med Partnership Agreement with the European Union (EU) in March 2003, and is working toward accession to the World Trade Organization (WTO). In order to increase revenues, the government introduced a 10% value added tax (VAT) that became applicable in February 2002 and a 5% tax that became applicable in February 2003.
In November 2002, Lebanon submitted a comprehensive program on its financing needs at the Paris II Donors Conference and succeeded in attracting pledges totaling $4.4 billion, including $3.1 billion to support fiscal adjustment and $1.2 billion to support economic development projects. To date, the government has received $2.5 billion, mostly used to retire or replace maturing debt, which carried an average cost of 13.5%. In return, the government issued donors 15-year dollar-denominated Eurobonds carrying a 5% coupon, with a 5-year grace period for repayment.
On the domestic front, the Central Bank of Lebanon (CBL) and commercial banks also contributed to the reduction of debt servicing costs. In December 2002, the CBL wrote off $1.8 billion in public debt it held and re-subscribed $1.8 billion in 15-year Eurobonds carrying a 4% coupon. Commercial banks subscribed 10% of their deposit base as of October 31, 2002 (about $4 billion) in 2-year treasury bills at zero percent interest rates. As a result of these combined efforts, about $10 billion was mobilized from local and international sources and used to replace high cost, short-term debt with lower cost and longer maturity debt. Paris II positively impacted financial markets and lowered interest rates.
As of the 2004 Article IV report, International Monetary Fund (IMF) directors welcomed recent positive macroeconomic developments but urged a more vigorous pursuit of macroeconomic stabilization and structural reforms, seizing the advantage of the positive momentum generated by the Paris II conference and the favorable international environment. Directors stressed that the attainment of debt sustainability over the medium term required further large increases in the primary surplus based on deep-seated revenue and expenditure reforms. Lebanese authorities acknowledged that much remained to be done to meet Paris II. IMF encouraged institutional reforms to solidify financial policies, starting with a phasing out of central bank financing of the government.
The U.S. enjoys a strong exporter position with Lebanon, generally ranking as Lebanon's fifth-largest source of imported goods. More than 160 offices representing U.S. businesses currently operate in Lebanon. Since the lifting of the passport restriction in 1997 (see below), a number of large U.S. companies have opened branch or regional offices, including Microsoft, American Airlines, Coca-Cola, FedEx, UPS, General Electric, Parsons Brinkerhoff, Cisco, Eli Lilly, and Pepsi Cola.
The foreign policy of Lebanon reflects its geographic location, the composition of its population, and its reliance on commerce and trade. Lebanon's foreign policy has been heavily influenced by Syria through 2005, despite the recent withdrawal of Syrian military troops. The framework for relations was first codified in May 1991, when Lebanon and Syria signed a treaty of mutual cooperation. This treaty came out of the Ta'if Agreement, which stipulated "Lebanon is linked to Syria by distinctive ties deriving strength from kinship, history, and common interests." The Lebanese-Syria treaty calls for "coordination and cooperation between the two countries" that would serve the "interests of the two countries within the framework of sovereignty and independence of each." Numerous agreements on political, economic, security, and judicial affairs have followed over the years. Recent moves by Syria to pressure Lebanon economically by expelling Lebanese workers and imposing a virtual blockade on the border have led the Lebanese to call for renegotiation of these treaties.
Lebanon concluded negotiations on an association agreement with the European Union in late 2001, and both sides initialed the accord in January 2002. Lebanon also has bilateral trade agreements with several Arab states and is working toward accession to the World Trade Organization. Lebanon enjoys good relations with virtually all of its Arab neighbors (despite historic tensions with Libya, the Palestinians, and Iraq), and hosted an Arab League Summit in March 2002 for the first time in more than 35 years. Lebanon also is a member of the Organization of Islamic Conference and maintains a close relationship with Iran, largely centered on Shi'a Muslim links. Lebanon is a member of the Francophone countries and hosted the Francophone Summit in October 2002.
Lebanon did not participate in the 1967 or 1973 Arab-Israeli war or in the 1991 Gulf War. The success of the latter created new opportunities for Middle East peacemaking. In October 1991, under the sponsorship of the United States and the then-Soviet Union, Middle East peace talks were held in Madrid, Spain, where Israel and a majority of its Arab neighbors conducted direct bilateral negotiations to seek a just, lasting, and comprehensive peace based on UN Security Council Resolutions 242 and 338 (and 425 on Lebanon) and the concept of "land for peace." Lebanon, Jordan, Syria, and representatives of the Palestinians continued negotiating until the Oslo interim peace accords were concluded between Israel and the Palestinians in September 1993 and Jordan and Israel signed an agreement in October 1994. In March 1996, Syria and Israel held another round of Madrid talks; the Lebanon track did not convene.
In early April 1996, Israel conducted a military operation dubbed "Grapes of Wrath" in response to Hizballah's continued launching of rockets at villages in northern Israel. The 16-day operation caused hundreds of thousands of civilians in south Lebanon to flee their homes. On April 18, Hizballah fired mortars at an Israeli military unit from a position near the UN compound at Qana, and the Israeli Army responded with artillery fire. Several Israeli shells struck the compound, killing 102 civilians sheltered there. In the "April Understanding" concluded on April 26, Israel and Hizballah committed themselves to avoid targeting civilians and using populated areas to launch attacks. The Israel-Lebanon Monitoring Group (ILMG), co-chaired by France and the United States, with Syria, Lebanon, and Israel all represented, was set up to implement the Understanding and assess reports of violations. ILMG ceased operations following the May 2000 Israeli withdrawal from south Lebanon.
On May 23, 2000, the Israeli military carried out a total withdrawal of Israeli troops from the south and the Bekaa Valley, effectively ending 22 years of occupation. The SLA collapsed and about 6,000 SLA members and their families fled the country, although more than 3,000 had returned by November 2003. The military court tried all of the SLA operatives who remained in the country and the average sentence handed down was 1-year imprisonment.
On June 16, 2000, the UN Security Council adopted the report of the Secretary General verifying Israeli compliance with UN Security Council Resolution 425 and the withdrawal of Israeli troops to their side of the demarcated Lebanese-Israeli line of separation (the "Blue Line") mapped out by UN cartographers. (The international border between Lebanon and Israel is still to be determined in the framework of a peace agreement.) In August 2000, the Government of Lebanon deployed over 1,000 police and soldiers to the former security zone, but Hizballah also maintained observation posts and conducted patrols along the Blue Line. While Lebanon and Syria initially agreed to respect the Blue Line, both since have registered objections and continue to argue that Israel has not fully withdrawn from Lebanese soil. As regional tension escalated with the Palestinian intifada in September 2000, Hizballah cited Blue Line discrepancies when it reengaged Israel on October 7, taking three Israeli soldiers captive in an area known as Sheba Farms. (In 2001, the Israeli Government declared the three soldiers were believed to be dead.) Sheba Farms is a largely unpopulated area of the Golan Heights, just south of the Blue Line, that was captured by Israel from Syria in 1967. As a result of secret mediation by the German Government, Israel released a number of Lebanese prisoners held by Israel in early 2004 in exchange for Elhanan Tannenbaum, an Israeli reservist abducted by Hizballah in late 2000.
Hizballah forces have continued to launch sporadic military strikes on Israeli forces, drawing responses that produced casualties on both sides and, on two occasions in 2001, Israeli air strikes on Syrian radar sites in Lebanon. Israel continues to violate Lebanese sovereignty by conducting many overflights of Lebanese territory north of the Blue Line. UNIFIL has recorded numerous violations of the Blue Line by both sides since the Israeli withdrawal. In general, however, the level of violence along the Israeli-Lebanon front has decreased dramatically since May 2000.
The United States seeks to maintain its traditionally close ties with Lebanon, and to help preserve its independence, sovereignty, national unity, and territorial integrity. The United States, along with the international community, supports full implementation of UN Security Council Resolution 1559, including the disarming of all militias and the deployment of the Lebanese Armed Forces throughout Lebanon. The United States believes that a peaceful, prosperous, and stable Lebanon can make an important contribution to comprehensive peace in the Middle East.
One measure of U.S. concern and involvement has been a program of relief, rehabilitation, and recovery that, since 1975, has totaled more than $400 million. This support reflects not only humanitarian concerns and historical ties but also the importance the United States attaches to sustainable development and the restoration of an independent, sovereign, unified Lebanon. Current funding is used to support the activities of U.S. and Lebanese private voluntary organizations engaged in rural and municipal development programs nationwide, improve the economic climate for global trade and investment, and enhance security and resettlement in south Lebanon. The U.S. also supports humanitarian demining and victims' assistance programs.
Over the years, the United States also has assisted the American University of Beirut (AUB) and the Lebanese American University (LAU) with budget support and student scholarships. Assistance also has been provided to the Lebanese-American Community School (ACS) and the International College (IC).
In 1993, the U.S. resumed the International Military Education and Training program in Lebanon to help bolster the Lebanese Armed Forces (LAF)--the country's only nonsectarian federal institution--and reinforce the importance of civilian control of the military. Sales of excess defense articles (EDA) resumed in 1991 and have allowed the LAF to enhance both its transportation and communications capabilities, which were severely degraded during the civil war.
Principal U.S. Embassy Officials
Deputy Chief of Mission--Christopher Murray
Defense Attach�--LTC Kazimierz Kotlow
USAID Director--Raouf Youssef
Political/Economic Chief--George Frederick
Management Officer--Barbara McCarthy
Public Affairs Officer--Juliet Wurr
Regional Security Officer--John Schilling
Economic/Commercial Officer--Brian Nafziger
The U.S. Embassy operates in Awkar, Lebanon (tel. 961-4-543600, 961-4-542600). 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. In 1997, reflecting improvements in Lebanon's security climate, the United States lifted the ban it had imposed on American-citizen travel to Lebanon in 1985. The ban was replaced by a travel warning. Nonetheless, remaining security concerns continue to limit the size of the American staff and visitor access to the Embassy. American Citizen Services are available and the Embassy resumed full nonimmigrant visa services in June 2003.