tured and farm
exports, and international aid as the main sources of foreign
exchange. Lebanon's economy has made impressive gains since Prime
Minister HARIRI launched his $18 billion "Horizon 2000" reconstruction
program in 1993. Real GDP grew 8% in 1994 and 7% in 1995 before
Israel's Operation Grapes of Wrath in April 1996 stunted economic
activity. During 1992-97, annual inflation fell from more than 170% to
9%, and foreign exchange reserves jumped to more than $4 billion from
$1.4 billion. Burgeoning capital inflows have generated foreign
payments surpluses, and the Lebanese pound has remained relatively
stable. Progress also has been made in rebuilding Lebanon's war-torn
physical and financial infrastructure. Solidere, a $2-billion firm, is
managing the reconstruction of Beirut's central business district; the
stock market reopened in January 1996; and international banks and
insurance companies are returning. The government nonetheless faces
serious challenges in the economic arena. It has had to fund
reconstruction by tapping foreign exchange reserves and boosting
borrowing. The stalled peace process and ongoing violence in southern
Lebanon could lead to wider hostilities that would disrupt vital
capital inflows. Furthermore, the gap between rich and poor has
widened since HARIRI took office, resulting in grassroots
dissatisfaction over the skewed distribution of the reconstruction's
benefits and leading the government to shift its focus from rebuilding
infrastructure to improving living conditions.

GDP: purchasing power parity-$15.2 billion (1997 est.)

GDP-real growth rate: 4% (1997 est.)

GDP-per capita: purchasing power parity-$4,400 (1997 est.)

GDP-composition by sector:
agriculture: 4%
industry: 23%
services: 73% (1997 est.)

Inflation rate-consumer price index: 9% (1997 est.)

Labor force:
total: 1 million plus as many as 1 million foreign workers (1996 est.)
by occupation: services 62%, industry 31%, agriculture 7% (1997 est.)

Unemployment rate: 18% (1997 est.)

Budget:
revenues: $2.4 billion
expenditures: $5.9 billion, including capital expenditures of $NA
(1997 est.)

Industries: banking; food processing; jewelry; cement; textiles;
mineral and chemical products; wood and furniture products; oil
refining; metal fabricating

Industrial production growth rate: 25% (1993 est.)

Electricity-capacity: 1.35 million kW (1997)

Electricity-production: 5 billion kWh (1995)

Electricity-co