Lebanon’s economy witnessed a significant downturn starting in 2018, with its GDP plummeting from $54.9 billion in 2018 to $23.1 billion in 2021. This sharp decline underscored the urgent need for innovative and sustainable solutions to rejuvenate the nation’s economic framework.
The Crisis in Numbers
The financial crisis in Lebanon manifested in various alarming indicators. The country’s GDP annual growth rate took a nosedive from -1.88% in 2018 to a staggering -21.89% in 2020. This drastic reduction pointed towards a severe contraction in economic activities, investments, and consumption. Further exacerbating the situation was the soaring inflation rate, which reached 154.8% in 2020, eroding the purchasing power of the Lebanese people, destabilizing savings, and deepening economic hardships.
Agriculture: A Beacon of Hope
In the midst of this crisis, a potential solution emerged: leveraging Lebanon’s arable land, which constitutes 13.64% of the country’s total land area. Despite a slight increase in arable land over the past decade, the contribution of agriculture to Lebanon’s GDP witnessed a decline in 2020, signaling an underutilization of this vital resource.
Revitalizing Through Agricultural Enhancement
The proposed solution focuses on enhancing agricultural production. This can be achieved by diversifying crop production, adopting modern agricultural practices, and providing robust support to local farmers. Historically, the agricultural sector has received limited attention from credit bank managers due to perceived risks. Therefore, government incentives and subsidies could play a crucial role in encouraging agricultural growth and exports, thereby aiding in job creation and indirectly boosting the country’s GDP.
Sustainable Practices and Unique Opportunities
Lebanon’s diverse geography and microclimates offer a unique advantage for cultivating a variety of crops. The country’s rich agricultural heritage, featuring culturally significant crop varieties, coupled with sustainable farming practices, enhances the quality and marketability of its produce. The export potential of these unique crops holds promise for stimulating economic growth and fostering regional trade cooperation.
Concrete Steps Forward
Findings suggest that Lebanon’s agricultural sector harbors substantial growth potential, which remains largely untapped. Key recommendations include comprehensive agricultural policy reforms, investment in infrastructure, and promotion of sustainable practices. A collaborative approach involving the government, private sector, and international organizations is essential to effectively implement these recommendations.
Conclusion: A Vision for Recovery
Lebanon stands at a critical juncture where investing in agricultural production and harnessing the potential of its arable land can serve as a cornerstone for economic recovery. This strategy not only aims to enhance the country’s food exports and optimize resource use but also addresses the pressing issues of unemployment and GDP growth.
In essence, Lebanon’s journey towards economic resilience can be significantly bolstered by a strategic pivot to agriculture, tapping into the nation’s inherent strengths and fostering a sustainable and prosperous future.
2018-2019 have been of the worst years for the Iranian people where Iran has witnessed compounded crises such as inflation, brain drain, poverty, unemployment, and inequality.
As a result, I have exploited the World Bank’s World Development Indicatorsand I have identified several indicators to measure the impact of the economic crisis in Iran between in 2018. For instance, Items that cost 5000 Rial in 2017 cost almost more than 250000 in 2018.
I will also try to discuss two potential measures that could mitigate its severe economic crisis.
The following graphs reflect the severity of the Iranian collapse. These graphs plotted in the dashboard were based on the UN World Indicators dataset.
What happened in Iran was against the SDG 8.1.1 to Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries and SDG 8.6 By 2020, substantially reduce the proportion of youth not in employment, education or training
External shocks, including sanctions and commodity price volatility, caused a long ecumenic stagnation. I will shed light on indicators that shows the Iranian economy collapse, starting with the Gross Domestic Product GDP per capita in US dollars used to assess the economic prosperity over time, before and after the crisis.
Also, the large contraction in oil exports placed significant pressure on government finances and drove inflation to over 40 %for four consecutive years. Weaker global demand and competitions discounted oil exports to China are expected to moderate Iran’s oil sector expansion. Domestic demand will also be affected by the negative impact of high inflation on consumption and investments
Sustained high inflation led to a substantial reduction in households’ purchasing power. The economic crisis has hit Iran’s youth particularly hard, especially those from lower economic backgrounds because the country’s rigid formal labor market preserves jobs for older workers. At the same time, job creation was insufficient to absorb the large pool of young and educated entrants to the labor market.
While relatively diversified for an oil exporting country, economic activity and government revenues still rely on oil revenues and have, therefore, been volatile.
I would recommend investing in the internal consumer market growth:
After the sanction, Iran was obliged to increase its imports due to the hardness of getting raw material for production and consumption especially for merchandizing and consumer goods. Thus, we recommend that Iran invest in its internal development of consumer good market.
To support this solution,
It has great supply of Petroleum, natural gas, and coal and oil for facilitating the trade and production
rapid changes to meet the increasing domestic demand for authentic, high-quality imported goods, including electronics, telecom products and parts, clothing..
Already high-end brands and middle-income brands are coming to invest
Iran is a substantial market of 80 million consumers with a growing and well-educated middle class
Because of the country’s unique geographical and strategic location, Iran is also the entry-point to other upcoming regional markets in the Middle East and Central Asia with equally high demands for foreign investments and trade.
The consumer goods market in Iran has also long thrived off the internal distribution networks
Tehran is a key transport hub, with several terminals set up around the capital connecting it to most major cities.
A good time for international companies to manufacture consumer goods in Iran for export across the region, which is helped by the fact that full foreign company ownership is permitted in Iranian law.
MGI’s 2016 Iran report predicted that the fast-moving consumer goods sector alone would create an additional 850,000 jobs by 2035
