Many reports and indicators have lately come to light about the state of Lebanon’s economy. They have all pointed to deterioration occurring in public finances, as well as various production sectors, and reflected the seriousness of the economic situation. Meanwhile, no one at the cabinet or state level seems to be giving the matter any attention or warning about its repercussions. These reports and publications also have not, unfortunately, been given import in the media. Front pages and headlines solely focus on the main event of the day, namely the Syrian crisis, in all its dramatic chapters. Yet, the situation is so dire as to merit thorough discussion, in addition to quick and assertive decisions.

The latest of these reports was one published by the rating agency Business Monitor International, which ranked Lebanon 112th among 159 countries worldwide and 12th among 20 Arab countries, in the level of risk engendered by its political and economic situations. This ranking came to prove the fragility of the country’s political situation, the states’ waning ability to perform its essential functions, the prevalence of corruption in state institutions, and the decreased ability of the economy to maintain growth without an increase in inflation levels.

This situation was further confirmed by the Finance Ministry’s figures concerning the budgetary situation in the first six months of the year, whereby they showed, compared with last year, a 67% increase in the deficit, which reached $1.89 billion. The new development in the matter was the sharp decline in the primary surplus, which shrank 98% when compared to last year.

This indicated that the higher deficit was not due to an increase in public debt levels, as is commonly thought, but was primarily the result of a decline in revenues (-4.2%), and an increase in expenditures, as confirmed by the Finance Ministry’s quarterly data. Debt service increased by 0.5%, while other expenses rose by 8.8%, to reach a total of $6.76 billion. All these figures indicate that the economy is suffering from a decline in growth resulting from the successive political crises and the repercussions of the Syrian war. They also show that the country is negatively affected by its lack of a responsible and effective government capable of restoring growth to the economy, which would, in turn, increase revenues and decrease the deficit though the rationalization of spending.