Lebanon's "Conservative Reflex"
Lebanon’s economy grew by 9 percent last year, one of seven nations to show positive economic growth in the midst of a worldwide financial turndown.
This figure is especially surprising when you consider the amount of economic hardship Lebanon has endured recently — including attacks from Israel, strife between the nation’s two political parties, ongoing civil conflict, few natural resources, and a national debt of almost $46 billion.
Lebanon’s economic security has primarily come from its risk-averse banking sector. In 2007, the country’s chief banker, Riad Salameh, advised Lebanon’s commercial banks to "get out of all international investments related to the international markets." Conflict also contributed to what Salameh described to the BBC as the banking industry's "conservative reflex":
The system we created has been tested against wars, against instability, against political assassinations. And our sector would be much more developed if Lebanon did not have political and security risks, but it has also induced us to have a conservative reflex because we were always getting ready for the worst case scenario.
Lebanon isn't going to get through the global economic crisis unscathed — the economy is expected to grow by 3 to 4 percent this year. Still, due to its conservative banking sector, the Lebanese economy is in better shape than most.
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I find this post both
I find this post both surprising and thought-provoking. What I wonder about most is what led Salameh, and in the end Lebanon to "get out of all international investments related to the international markets." Yes, many others had this same inclination, but clearly did not follow through with such advise and are now suffering economically.
This example of foresight in such a small country that has been through so much recent conflict and instability also suggests the countries such as the U.S. must not underestimate the ability of smaller, less stable countries to succeed.
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