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Originally Posted by dodzi  Absolutely not! I remember that they talked about the same kind of numbers last year, but they said that the increase was mostly due to the loans received! |
Loans should never count as revenues. Whoever said that did not know what they were talking about.
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Originally Posted by Danny Z so the last items Taxes less subsidies especially the taxes part is taken from the gross operating surplus, or compensation of employees, which at the end of the line doesn't change anything in GDP |
The idea is that income went up, which induced an increase in government revenues. If revenues went up because the tax rates increased, then what you said would apply (unless the government borrows the money). I would even go further and say GDP would fall since taxes decrease profitability and investment.
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Originally Posted by cedarheart -Besides the 500$ for their vote, what are lebanese getting in return for all these taxes?
-How come the deficit is not shrinking if the revenues are increasing? |
The Lebanese are not getting anything. All this increased revenue is used to pay off public debt.
As for the deficit, it
is shrinking.
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Originally Posted by Danny Z So the next question would be how come the government income (i.e taxes less subsidies) increases by 28% and GDP only by 2-3%? |
Well, government revenues are only a small part of GDP. If they increased by 28% to $2.8 billion, then that's probably an incrase of a little over 600 million, which is just over 2% of GDP.
Besides, GDP figures for 2009 could well be very impressive and substantially over the 2-4% you mentioned. For example, the Banque du Liban estimated growth of 9% or better for 2008 (see following article).
I see this as good news though not as good as it might seem at first. Government revenues were hard-hit in the recent past so big improvements in revenues are more reflective of the poor state our economy was in than a good economic performance. We are merely rebounding from a heavy blow.
So here's the Economist article I mentioned to Danny.
Bucking the trend
Apr 23rd 2009 | BEIRUT
From The Economist print edition
A surprising economic success amid the usual political gridlock
LIKE shame-faced bankers the world over, managers at the Banque du Liban, Lebanon’s central bank, have had to admit that their initial figures for last year were wrong. But while number crunchers elsewhere toil to trim over-optimistic estimates into punier real results, statisticians at the Banque du Liban are revising theirs sharply upwards. Lebanon’s GDP grew during 2008, not at an annual rate of 7.5%, it seems, but at 9% or better.
Yet even that trend-bucking number looks modest compared to other milestones scored by this small, almost comically turbulent country. Last year the value of deposits in Lebanese commercial banks rose by 15% to an impressive $94 billion, equal to 327% of GDP. Industrial exports surged 24%. Tax revenues, tourist arrivals, banking profits and the number of construction permits all soared by a third or more. A giant 46% leap in net capital inflows helped Lebanon post a record $3.5 billion surplus in its balance of payments, and boosted the Banque du Liban’s own reserves to a cosy $22 billion, nearly double its holdings a year ago.
Nor does this upswing show much sign of slowing. Sales of new cars are up by 19%, and the number of tourists arriving in the country in the first three months of this year increased by 50% compared with the same period last year. Property prices are holding the past few years’ heady gains, and worries that the global recession would force home thousands of Lebanese expatriates, slashing the remittances that underpin the economy, have so far proven unfounded.
This all seems odd for a country with few natural resources, and which in the past few decades has endured a long and bloody civil war, devastating Israeli attacks, and a suspected campaign of assassination and destabilisation carried out by its only other neighbour, Syria. Consider also the coexistence of 17 sectarian groups, several of them boasting multiple armed militias, and the extreme polarisation of Lebanese politics into two bitterly opposed alliances that fought bloody street battles just a year ago, and the picture is more puzzling still.
Furthermore, all these opposing factions face national elections in just over a month’s time, yet no one seems particularly worried. This, say Lebanese with a shrug, is because of two things. Outside powers that love to meddle here, such as Saudi Arabia and Syria, are tired of bickering for now. And local politics have reached such a logjam that nothing much is likely to change. Whoever tops the polls in June will do so by a slim margin, leaving each factional alliance capable of holding the other in check.
But these factors go only part of the way to explain Lebanon’s unwonted success. The ironic truth is that the country’s double curse, of chaotic internal politics and being located in a nasty neighbourhood, are proving helpful for a change. For one thing, they have made Lebanese bankers unusually wary and resourceful. Four years ago, for instance, the Banque du Liban’s stern and far-sighted head, Riad Salameh, banned any dealing in such tricky foreign instruments as mortgage-linked securities. And while banks, property developers and service vendors raked in business as private cash spilled out of the oil-enriched Gulf, competition between influence-seeking powers brought a windfall in aid for reconstruction following the ruinous 2006 war with Israel. Iran alone has injected perhaps $1 billion to rebuild the heavily bomb-damaged parts of Beirut run by its protégé militia, Hizbullah.
With global financial turmoil now shaking such upstart regional rivals as Dubai, Lebanon has looked increasingly attractive as a haven. Falling oil prices have cast gloom over the Gulf, and may eventually staunch the inflow of its money. But for Lebanese, they have meant a welcome shrinking of bills for imported energy.
All this relative rosiness could lead to complacency. This is a luxury, however, that most Lebanese know they cannot afford. On top of its constant curses, Lebanon also bears the burden of a colossal national debt. This has now dropped, in relative terms, to a mere 162% of GDP, triple the world average. Bringing this into more reasonable bounds will require not just wary resourcefulness, but actual leadership of a kind that the Banque du Liban alone cannot deliver.
29th June 2009
