Economic bounce?

Mona Alami writes a strangely optimistic piece on the economy in Asia Times:

Lebanon, whose status as "Switzerland of the Middle East' for its advanced banking sector has long been lost amid civil and cross-border war, may be going some way to regaining its standing.

Since 2005, Lebanon's economy has struggled to keep going under the threat of further civil strife, renewing fears of a return to the 15-year civil war that started in 1975.

"The budget deficit is hovering between US$3 billion to $4 billion, the public debt at about $45 billion, with a 2009 forecast of $49 billion. That is approximately twice our GDP [gross domestic product], making it the highest debt-to-GDP rate in the world," says Louis Hobeika, professor of economics at the American University of Beirut.

This year, levels show moderate growth. "The government is forecasting a 5% GDP growth, although in my opinion, only half can be realistically expected," says Hobeika. Ghobril estimates growth at a minimum of 4% - provided the political situation remains stable.

Challenges facing the new government, formed in the wake of the election of President Michel Suleiman three months ago, include reducing public debt through reforms such as the privatization of the telecom sector, electric plants, the Casino du Liban and the national carrier Middle East Airlines, as well as cutting expenditures.

"Privatizing these industries would generate as much as $10 billion in revenues for the government, and bring down debt levels from $45 billion to $35 billion," says Hobeika. The AUB economist also emphasizes that since Lebanon has been without a budget for the past four years, this year it should be submitted within the legal timeline.