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COUNTRY BRIEFS


INTRODUCTION

Australia enjoys friendly bilateral relations with Lebanon, underpinned by strong people-to-people links. The Australian Embassy in Beirut, opened in 1967, was the third Australian Embassy opened in the Middle East. Australia is committed to Lebanon's sovereignty, independence and national unity and supports United Nations Security Council Resolutions 1559 (supporting Lebanese sovereignty and calling for the extension of Lebanese Government control over Lebanese territory) and 1701 (which reiterated support for Lebanese sovereignty in the context of the 2006 conflict in Southern Lebanon).

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POLITICAL OVERVIEW

Although no official census has been taken since 1932, it is widely accepted that a clear majority of Lebanon's population is now Muslim. Most of the Muslim population is Sunni or Shi'a, but there are also significant numbers of Druze and a small Alawite community. The Maronites are the largest of the Christian sects. In all, eighteen distinct ‘confessions' are recognised.

Lebanon is a parliamentary democracy, but the sectarian nature of Lebanese society is reflected in all aspects of political life. The political system seeks to maintain equilibrium and stability through the allocation of parliamentary seats, ministerial posts and key offices of state among the various religious communities. The National Assembly is made up of 128 deputies, with equal representation for Muslims and Christians. National Assembly deputies are elected by popular vote to serve four-year terms. The President is elected by the National Assembly for a six-year term. The Prime Minister and Deputy Prime Minister are appointed by the President in consultation with the National Assembly. By custom, the President is a Maronite Christian, the Prime Minister a Sunni Muslim and the Speaker of the Legislature a Shi'a Muslim.

Following parliamentary elections in June 2009, a unity cabinet was established, following protracted negotiations, on 10 November 2009. It contains 15 members of the majority coalition, led by Prime Minister Saad Hariri (son of the former Prime Minister, the late Rafik Hariri), ten members of the opposition bloc, and five members appointed by President Michel Sleiman.

Lebanon commenced a two-year term of non-permanent membership of the UN Security Council on 1 January 2010. Lebanon held the rotating office of UN Security Council President in May 2010.

Hariri Investigation

Former Prime Minister Rafik Hariri was assassinated in February 2005. His assassination prompted the formation of the United Nations International Independent Investigation Commission (UNIIIC). This was succeeded, on 30 May 2007, by the establishment of the Special Tribunal for Lebanon under UN Security Council Resolution 1757. The Special Tribunal for Lebanon opened in The Hague in March 2009. Australian Nick Kaldas, NSW Deputy Police Commissioner, served as the Special Investigator for the Tribunal from March 2009 to February 2010; Australian Helen Brady was appointed Chef de Cabinet to the President of the Tribunal in 2009. Investigations continue and indictments are yet to be laid against any individuals.

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ECONOMIC OVERVIEW

The Lebanese civil war (1975-1990) caused serious damage to Lebanon's economic infrastructure. High levels of public debt were accumulated over the post-war period (and continue to represent a challenge for the Lebanese Government). Significant reforms introduced by the government of the late Rafik Hariri in the 1990s included reduced tariffs, privatisation of state enterprises and the introduction of a consumption tax (VAT).

The conflict between Israel and Hizballah in 2006 caused further damage to infrastructure in the south and in Beirut. At the Paris Conference in January 2007, bilateral and multilateral donors, including Australia, pledged US$7.6 billion in grants and loans for the reconstruction of Lebanon following the 2006 conflict.

Services (mainly commerce, tourism and financial services) currently account for more than three-quarters of GDP. It is widely recognised that further structural and micro-economic reforms are needed to reduce constraints to growth (for instance, Lebanon suffers from chronic electricity shortages, and corruption is acknowledged by the government to be a problem).

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BILATERAL RELATIONSHIP

The Australian-Lebanese population plays an important role in the bilateral relationship. According to the 2006 census, there were over 74,000 Lebanese-born residents in Australia in 2006, almost three-quarters of whom reside in Sydney. The community which identifies as being of Lebanese origin (i.e. including second and third generations) is considerably larger than this. Prominent Australians of Lebanese descent include HE Dr Marie Bashir, Governor of New South Wales, the Hon Steve Bracks, former Premier of Victoria, and Hazem El Masri, former star player with the Canterbury-Bankstown Bulldogs rugby league team. Approximately 20,000-25,000 Australian passport holders normally reside in Lebanon; this number increases by several thousand during summer.

Bilateral economic and trade relationship

According to Australian Government figures (which do not count exports trans-shipped to Lebanon through other regional ports), total two-way merchandise trade amounted to A$53 million in 2008-09 (over A$39 million in Australian exports and over A$13 million in imports from Lebanon). Key Australian exports include beef, wheat and vegetables. Major imports from Lebanon include yarns and fabrics, vegetables, fruit and other edible products.

In the Lebanese market, European suppliers enjoy a substantial competitive advantage, with lower transport costs and shorter delivery times. Current opportunities for Australian exporters are primarily focused in the education, food and beverage sectors. Australian companies have been deterred from investing in the Lebanese market by the non-transparency of the business environment, high local service costs, infrastructural problems, and the uncertainties surrounding the political and security environment.

Austrade's office in Jordan is responsible for Lebanon. Austrade's web site has information on doing business in Lebanon and market profiles of priority sectors, such as education, food and health and medical.

Aid

Australia provides international development assistance to Lebanon. Australia contributed more than $24 million for post-conflict assistance in 2006 and 2007, and has continued to provide assistance specifically for de-mining activities. In 2010, Australia announced a further contribution of $500,000 to assist the removal of unexploded ordnance, in particular, cluster munitions, in southern Lebanon. Assistance is also provided for small-scale activities through the Direct Aid Program, and by an active volunteer program managed by Australian Volunteers International. Australia also provides funding to support a range of United Nations activities in Lebanon (see below).

Support for United Nations activities in Lebanon

A number of UN agencies are active in Lebanon, and receive support from Australia. Since 1956, and continuing to the present day, the Australian Defence Force has provided military observers as part of the United Nations Truce Supervision Organisation (UNTSO), which operates in Lebanon (as well as a number of other countries in the Middle East). Six ADF observers are currently posted in Lebanon.

Australia contributes funds to UNRWA, the United Nations agency responsible for Palestine refugees in the Middle East, which has significant programs in Lebanon (the Palestinian refugee population in Lebanon is estimated at up to 400,000). In 2010, Australia made a three-year commitment of A$18 million to UNRWA. Australia has also donated to a special UNRWA fund for the reconstruction of the Nahr El Bared Palestinian refugee camp, which was destroyed in 2007 in fighting between the Lebanese army and Fatah Al Islam. In 2010, Australia provided an additional A$1million for Nahr El Bared reconstruction.

Australia imposes targeted United Nations Security Council authorised sanctions (http://www.dfat.gov.au/un/unsc_sanctions/lebanon.html) on Lebanon, including a prohibition on the unauthorised supply, sale or transfer to Lebanon of arms or related materiel.

Australia's stance on Hizballah

Lebanese Shi'ite organisation Hizballah, a multi-faceted organisation comprising political and social elements, as well as military and terrorist wings, was listed in its entirety by the Australian Government in December 2001, for the purpose of asset freezing. Its External Security Organisation (ESO) (http://www.nationalsecurity.gov.au/agd/WWW/nationalsecurity.nsf/Page/What_Governments_are_doing_Listing_of_Terrorism_Organisations_Hizballah_External_Security_Organisation) was listed by the Australian Government in June 2003 as a terrorist organisation. Hizballah's presence in Lebanese society is not confined to its militia, but also includes representatives in parliament and many charitable associations. Hizballah has participated in Lebanon's political system since 1992, and currently has 13 MPs in Parliament, including two Cabinet Ministers.

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Last Updated: July 2010

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