BEIRUT: The world economic crisis has left few scars on countries such as Lebanon that are insulated from the global economy, but this isolation will also translate into a slower economic rebound than that witnessed in other parts of the world, the International Monetary Fund’s representative in Lebanon said on Thursday.
“The economy of oil importing countries did not slow down significantly over the last year and, by the same token, it is not expected to grow so much,” said Eric Mottu, the International Monetary Fund’s (IMF) resident representative.
Mottu was addressing Lebanon’s leading bankers, economic policy-makers, and business leaders at the Central Bank on the occasion of the launch of the IMF’s yearly report on the state of the region’s economies, the “Regional Economic Outlook.”
He painted an encouraging picture of the economy of Middle East countries, with the global economy’s ongoing recovery stimulating the return of capital flows to emerging markets such as those of the Middle East.
“My message is that the economic outlook for the MENA region has improved,” he said.
As a result, growth projections are higher for emerging economies like Lebanon than for industrialized ones, according to the IMF.
With a projected growth rate of 6 percent between 2010 and 2011, Lebanon’s economy will indeed fare better than the average global growth, which is expected to cap at 4.5 percent over the same period of time.
But Mottu warned that Lebanon’s case stood as an exception among oil importing countries, since strong growth in the region would for the most part likely be limited to those countries that export oil.
Countries that are not blessed with the precious black gold – Syria, Jordan, Egypt and others – will for their part suffer setbacks as a result of their significant trade linkages with Europe, whose ailing consumer market is to remain weak in the short-term. Their growth rates, estimated at 4.1 percent in 2010 and 4.8 percent in 2011, are “below average for emerging and developing economies,” said Mottu. “More importantly, they are insufficient to create the jobs needed in a region where the working-age population is projected to increase.”
Mottu attributed the overall incapacity of oil importing countries to profit from the growth witnessed in other emerging economies to their failure to compete on the global marketplace. “For the past decade, their share on the world exporting market has not moved or increased,” he said. “This is a sign of competitiveness problems which should take the center stage and be tackled.”
“Additional efforts to create a more business-friendly environment for foreign and local investments, liberalize the financial sector, and develop local capitals markets will help meet this goal,” he said.
Lebanon’s Central Bank governor, Riad Salameh, meanwhile, offered an upbeat overview of the state of the Lebanese economy, insisting that it had, by and large, retained its vigor despite numerous historical hardships.
“We are clearly linked to Arab and even European economies, because there is a relationship of trade … There are always risks that those countries will negatively impact us one way or another,” he said.
But Lebanon’s latest mark of resilience, he said, was that the country “did not fall under the weight of the financial crisis.”
While unemployment reached “catastrophic rates around the world,” Salameh said, Lebanon’s well-above-average growth rate since 2007 had, in contrast, spurred the creation of many new job opportunities in the country.
“In the absence of accurate statistics regarding unemployment, we consider that these growth rates have allowed for people to find more job opportunities,” he said.
He also said the balance of payment surplus had reached an encouraging $1.4 billion so far this year, and was comparable to the 2009 figure when the total surplus was estimated at $7.9 billion.
“This shows our financial policies are correct,” he said, adding that the Central Bank would strive to maintain the stability of the Lebanese pound’s exchange value, the country’s interest rates, as well as its inflation rate – which Salameh estimated at 4 percent year in, year out.