Lebanon is in need of Foreign Direct Investment given the economic instability the country has been experiencing due to recurrent civil wars. From the publication, the country experienced impressive economic growth between 1975 and 1990 before the civil war. All economic structures and significant infrastructure of the country were shuttered when Lebanon plunged into a civil war. Again, in 2006, the country experienced another war that lasted for one month causing another severe damage to the economy that was on the verge of recovering. FDI would be the best option for this country given its unpredictability. FDI would enable companies with investments in other countries to invest in Lebanon. These companies will be in a position to reap from Lebanon in times of relative calm, and remain in operation even in times of turmoil through its branches abroad.
Enabler of FDI in this excerpt is significantly the prevalence of peace. Between 1990 when the country had relative peace, it had buzzing economic prosperity. It had a 700% increase in GDP in just 16 years. Unemployment rate dropped to 8.1% by 2004 as GDP increased from $2.828 billion in 1990 to $222438 billion in 2006. Developments in the economy were as a result of Direct Foreign Investment. On the other hand, several factors in Lebanon could act as inhibitors of FDI. These include fraud that is prevalent in the Lebanese systems. In addition, there is bureaucracy in Lebanese systems that citizens of other countries may find time consuming and tiring. In addition, Lebanese judicial system is unjust and under the influence of those in power. The police, other security services and government influence decisions the judiciary make, spilling shades of doubt on prospective foreign investors in the Lebanese market.
Reference
Kirk, D. H. (2007). Case Study on Lebanon: The role of Social And Political Factors in Lebanese Economy Versus Insurgency. Carlifonia: Naval Post graduate Monetary.
